Collateral Management

Course OverviewThe use of collateral, for many years associated mainly with repo and securities lending transactions, has seen a rapid growth within the financial marketplace. The need to reduce exposure in these transactions, as well as the rise of the OTC derivatives market, has led to a significant increase in the degree of complication faced by operations departments.

Successful processing of collateral within an organisation requires knowledgeable staff that understand the component parts that lead to safe and secure processing, as well as awareness of the pitfalls that can result in unacceptable exposures.

By completing the programme you will:

• Understand the main collateral operational flow

• Learn how to derive collateral values and what impacts such values

• Be able to look at the risks in processing collateral and the controls to mitigate

• Appreciate the numerous collateral-related transaction types

internationally recognised qualifications for the

financial market

Collateral Management

Collateral Management

internationally recognised qualifications for the

financial market

Course ContentThe course content is divided into several topic areas, which are then broken down into multiple subtopics:

1. Fundamental Collateral Concepts• Definitionandpurposeofcollateral• Whytheincreasedfocusoncollateral?• Overviewofthecollaterallife-cycle

2. Types of Collateral• Cash• Bonds• Equity• Collateralimpactonregulatorycapital:overview

3. Transaction Types Necessitating Collateral• Securitieslendingandborrowing• Repo• Securedcashborrowingandlending• OTCderivatives• CashborrowingatCSDsandcustodians• FX• Tri-partycollateralservices

4. Legal Protection• Necessityoflegalprotection• Masteragreements• Definitions• Creditsupportannexes• ECBvaluationhaircuts• Confirmations

5. Static Data• Conceptsofstaticdata• ConceptsofSTP• StaticdataandSTPincollateralmanagement

6. The Collateral Life-cycle• Pre-trading• Trading• Throughoutlifetimeoftrade - Tradereconciliation - Marking-to-market - Collateralcallcalculation - Makingandreceivingcollateralcalls - Collateralsubstitution - Incomeandcorporateactions• Tradetermination

7. The Collateral Management Function• Overviewofresponsibilities• Centralisedcollateralfunction• Costcentrevs.profitcentre

8. Current Initiatives• ClearingofOTCderivatives - Theregulators’perspective - Regulatorychanges:overview - Centralclearingandcollateralmanagement

Course FormatTheCollateralManagementcourseisatwodayclassroom-basedprogramme,takingplaceinLondonthroughouttheyear.Thisisanon-examinedcoursebutdelegateswillreceiveacertificateofattendance,issuedjointlybyICMAandHenleyBusinessSchool,UniversityofReading.

Target AudienceThecourseissuitableforcollateralmanagementpersonnelwhowouldbenefitfromunderstandingthe‘big-picture’,thosewhohavehadlimitedexposuretocollateralbutwhorequireagreaterunderstandingoftherelationshipsbetweentheirworkandcollateralandthosewhohaverecentlybeentransferredtothecollateralmanagementdepartment.

Course DirectorMikeSimmonsisanoperationsspecialistandtheProgrammeDirectorforICMA’sOperationsstreamoftrainingcourses.Hehasbeeninvolvedwiththecapitalmarketsandoperationsthroughouthiscareer,focusingoriginallyuponsecuritiessettlementandmorerecentlyonthebroaderaspectsofoperations.

Mikeistheauthorofseveralbooksonoperationsincluding‘SecuritiesOperations:AGuidetoTrade&PositionManagement’.InadditiontotheCollateralManagementcourse,MikeistheProgrammeDirectorfortheOperationsCertificateProgramme(OCP),theSecuritiesOperationsFoundationCourse(SOFC)andteachesvariousspecialistoperationscourses.

ICMA Executive EducationFormanyyearsICMAExecutiveEducationhasbeenregardedasthebenchmarkintrainingforboththefrontofficeandoperationsareasofbusiness.Ourcoursesareinternationallyrecognisedandarerequiredtrainingbymanyofourmemberfirms.ICMAExecutiveEducationisuniqueinthatICMAandtheICMACentre,HenleyBusinessSchool,UniversityofReadingworktogethertodelivertrainingcourses,taughtbycurrentandformerfinancialmarketspractitionerswhichblendpracticalandacademicknow-how,sothatcandidateshaveathoroughunderstandingofthetopicsbeingdiscussed.

FiveCertificateProgrammesareoffered:

• Financial Markets Foundation Course (FMFC)

• Securities Operations Foundation Course (SOFC)

• Fixed Income Certificate (FIC)

• Operations Certificate Programme (OCP)

• Primary Market Certificate (PMC)

Allarerecognisedascertificatesofcompetenceinthecapitalmarketsandaresuccessfullycompletedbylargenumbersofinternationalparticipantseachyear.Inadditiontoourcertificateprogrammes,wealsoofferaselectionofspecialistcoursesthroughouttheyear.Theseprogrammesaresingletopicsubjects,coveredwithinourintermediatecourses,butinmuchmoredepth. Thecoursesarefocussedandprovideanopportunitytonetworkanddiscusstheissuesaffectingthefinancialmarketswithyourindustrypeers.

ICMAExecutiveEducationisabletoprovideanyofourpubliccoursesonanin-housebasisifrequired,ifanorganisationwishesanumberofdelegatestoattendaspecificcourse.

ICMA CentreTheICMACentre,UniversityofReadinghasaninternationalreputationforprovidingqualityteachingprogrammestailoredtothecapitalmarketsindustry.Establishedin1991withfundingprovidedbytheInternationalCapitalMarketAssociation(ICMA),theCentreishousedinapurpose-builtmodernistbuildingwithstate-of-the-artfacilitiesincludingtwodealingrooms.In2008,ICMAenabledanexpansiontothebuildingthatnowincludesanadditional50seatdealingroom,170seatlecturetheatreaswellasnewseminarroomsandadedicatedresearcharea.

The International Capital Market AssociationTheInternationalCapitalMarketAssociationisthetradeassociationrepresentingconstituentsandpractitionersintheinternationalcapitalmarketworldwide.ICMA’smembersarelocatedinover50countriesacrosstheglobe,includingalltheworld’smainfinancialcentres,andcurrentlynumberinexcessof470firms.ICMAperformsacrucialcentralroleinthemarketbyprovidingandenforcingaself-regulatorycodeofindustry-drivenrulesandrecommendationswhichregulateissuance,tradingandsettlementintheinternationalfixedincomeandrelatedinstruments.

Further Information And Course RegistrationForfurtherinformationandtoregisterforany ofourcourses,pleasevisit: www.icmagroup.org/education orcontactusat:education@icmagroup.org

International Capital Market Association Limited23CollegeHill,LondonEC4R2RPUnitedKingdomTel:+44(0)2072130310Fax:+44(0)2072130311Email:education@icmagroup.orgwww.icmagroup.org

ICMAandtheUniversityofReadingworktogetheras“ICMAExecutiveEducation”underanoperatingagreement.Coveringtechnicalproduct/marketsandoperations,theprofessionalqualificationsandtrainingprogrammesaredeliveredinmajorfinancialcentresaimedatmarketpractitionersinthefinancialmarkets.