Derivative Operations

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Derivative Operations

Objectives

The course is aimed at developing a fundamental grounding in the operations-focused activities and responsibilities when a firm trades in derivatives, both exchange-traded and over-the-counter and is equally relevant to the buy-side and sell-side of the business.

This training course explores the processing steps and events that will (or may) occur for a number of the common transaction types, and highlights both primary risks and mitigating measures.

Target Audience

This course is suitable for staff that are new to derivatives, and those that are currently working within derivative operations and require a broad understanding of the end-to-end processing flow. This course is an extension of the ICMA Operations Certificate Programme (OCP) but there are no formal pre-requisites to taking this course.

Length and Structure of the Course

The course consists of two days of lectures, case studies and group exercises. Each day typically consists of four 90 minute sessions with coffee breaks in the morning and afternoon and lunch break in the middle. There is no exam for this course but candidates will get a certificate of attendance.

Course Tutor

Mike Simmons

Mike is an independent training consultant and has been involved with the capital markets and operations throughout his career, focusing originally upon securities settlement and more recently on the broader aspects of operations (e.g. derivatives, trade finance, payments, corporate finance and corporate lending). Mike is the author of two books on Operations “Corporate Actions: A Guide to Securities Event Management” and “Securities Operations: A Guide to Trade & Position Management” both published by Wiley Finance.

Mike is also a regular instructor on the ICMA Operations Certificate Programme.

Course Brochure

Click here to download the Derivative Operations course brochure.

Course Outline

Session 1	Contents
Introductory Session	• The investors need • Brief history of derivatives • Responsibilities overview of Derivative Operations

Session 2	Contents
The Derivatives Marketplace	• Characteristics of exchange-traded derivatives • Characteristics of OTC derivatives • Similarities & differences between ETD & OTC

Session 3	Contents
Basic Derivative Types	• Futures • Options • Swaps

Session 4	Contents
Exchange Traded Derivatives	• Definition of a futures contract • Margin accounts and the purpose of margin • The role of the clearing house

Session 5	Contents
OTC Derivatives #1	• Definition of an OTC Derivative trade • The generic OTC derivative trade lifecycle • Description of operation’s responsibilities

Session 6	Contents
OTC Derivatives #2	• Purpose & importance of legal agreements • Content of legal agreements • Legal agreements and day-to-day responsibilities

Session 7	Contents
OTC Derivatives #3	• Lifecycles of interest rate swaps & credit default swaps • Operations responsibilities for each • Processing risks & controls • Variations of interest rate and credit derivatives

Session 8	Contents
Collateral in OTC Derivatives	• Definition of collateral & application in OTC derivatives • Circumstances giving rise to collateral • Legal agreements and collateral • Collateral lifecycle in OTC derivatives