Foreign Exchange Trade Lifecycle

Price: $995   Register now

Recommended that you register at least two weeks in advance.

Course Features

  • Course date:01/30/2020
  • Course Duration: 1 Day
  • Level: Intermediate
  • Prerequisites: Knowledge of FX
  • Method: Live & Virtual
  • Venue: MicroTek
  • Time: 9:00 am – 5:00 pm
  • Dress Code: Business Casual

Foreign Exchange Trade Lifecycle

This training seminar introduces participants to the trade lifecycle for foreign exchange trades. Participants follow the sequence of activity that occurs “behind the scenes” on trade date once an FX trade is executed through the final exchange of currencies on settlement date.

Course Objectives

By the end of the course, participants will be able to:

  • Understand how FX trades are executed among brokers, dealers, their customers and inter-dealer brokers.
  • Identify the critical functional areas of a FX trade supported by the middle and back-office functions
  • Identify services provided by CLS and SWIFT
  • Distinguish types of operational risks related to FX trades that have a potential impact on the business entities and financial markets
  • Examine specific post-execution processes related to FX trade lifecycle activity, including Nostro account management and reconciliation

 

Session 1:  Pre-Trade Preparation and Documentation

  • Explain the process of customer account set-up
    • Know Your Customer (e.g., Patriot Act, Non-Disclosure Agreements)
    • Master Agreements
    • Documentation of any special arrangements (e.g., credit lines)
    • Standing Settlement Instructions
  • Discuss product set-up
    • Spot, Forwards, Options, Swaps, NDFs, NDOs

 

Session 2:  Order Entry and Trade Execution

  • Discuss origination of customer orders
    • Methods used to communicate orders and RFQs
    • Verbal communication and electronic links
  • Explain Trade Execution
    • Edit and validate criteria
  • Trade amendments
    • Front-end trading and sales system
  • Identify credit monitoring

 

Session 3 :  Confirmation

  • Discuss bilateral confirmations
    • Verbal and hard-copy
    • Trade matching criteria
  • Describe affirmation of trade details
  • Identify SWIFT and other vendor solutions for confirmations
  • Confirm block trades and split allocations
  • Discuss exception processing

 

Session 4:  Netting

  • Discuss netting agreements
  • Explain bilateral netting of payments
  • Confirm final netted amounts

 

Session 5:  Settlement

  • Forecast liquidity needs
    • Realtime balance projections
    • Cut-off times
  • Discuss settlement risk and exposure
  • Explain exchange of cash on value date
    • Impact of time zone differences
    • DVP vs. Non-DVP settlement
  • Communicate payment instructions and expected receipts to banks
    • SWIFT messaging and other means of communication
  • Describe CLS Bank
    • Background:  why CLS?
    • Membership:  settlement members, users and third-parties
    • FX flow through CLS
    • Management of DVP risk

 

Session 6:  Nostro Reconciliation

  • Explain Nostro account reconciliations with banks
  • Identify non-receipt of payments
  • Discuss follow-up and error resolution process
  • Recognize the impact of settlement failure

 

Session 7:  Accounting and Financial Control

  • Calculate P&L
    • Realized and unrealized
  • Value positions – mark-to-market

Instructor

  • Charlotte is a broadly accomplished financial services executive with over 25 years of comprehensive experience in delivering innovative and cost-effective operations and technology training solutions for equities, derivatives and fixed income product lines.  Her successful career as a senior-level manager in Operations at Credit Suisse, Paine Webber and Bankers Trust furnishes the industry expertise that …
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