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Central Counterparties, Clearing Houses & Exchanges

A one-day intensive case study based workshop to review the risks and the fast changing market dynamics faced when dealing with different types of central counterparty, clearing house and exchange.

Course Objectives

The goal of this one-day workshop is to offer a structured approach to the credit analysis of central counterparties, clearing houses and exchanges.

Specifically the workshop will address the following topics:

  • Business models of central counterparties, clearing houses, settlement agents and exchanges and how these are changing in response to economic, structural, competitive and regulatory issues
  • Main business and financial risks faced by each business model and evaluate risk management and strategy
  • Key performance indicators for each business model and dissect financial statements to uncover key credit issues
  • Typical exposures to the different types of institution and how these can be structured in order to minimise credit and other risks.

Target Audience

Risk managers, treasurers, capital markets and regulatory professionals who need to review and analyse credit exposures to different types of securities and derivatives exchange, clearing house and central counterparty. The workshop is pitched at an intermediate level and assumes a basic knowledge of securities and derivatives markets, accounting and credit risk issues.

Content

SECURITIES AND DERIVATIVES MARKETS

The goal of this section is to review the roles and differing business models of central clearing parties, clearing houses and exchanges in the securities markets and to appreciate the impact of changing macro, competitive and regulatory issues.

Securities and derivatives markets
  • Market practices and trends in the trading and clearing of securities and derivatives
  • Over the counter versus exchange traded; need for central clearing parties
  • Potential for systemic risk.
Macro, competitive and regulatory issues
  • Impact of electronic exchanges, consolidation
  • Regulation: regulatory pressure to extend the use of central clearing; Dodd Franks, Basel III
  • Supervision: who supervises the different exchanges, central counterparties and exchanges.
Business models
  • Differing business models and impact on business risks
  • Central counterparties (e.g. LCH Clearnet)
  • Clearing houses / settlement agents (e.g. Euroclear, CLS)
  • Exchanges (e.g. London Stock Exchange, Eurex).
RISK AND FINANCIAL ANALYSIS

The goal of this section is to identify the various risks inherent in central counterparties, clearing houses and exchanges and to identify best practice.

Business risk
  • Credit risk: management of counterparty risk, margining arrangements, default fund structures, cash flow analysis
  • Operational risk: impact of the business model
Case study:

Critical assessment of SPAN margining.

Financial risk
  • Managing liquidity risk
  • Appropriate levels of leverage and capital.
Other risks
  • Legal, market, reputational, regulatory, and systemic risk assessment
Case study:

Compare and contrast the business and financial risk profile of a clearing house and central counterparty.

EXPOSURE STRUCTURING

The goal of this section is to understand how to assess and control the risk exposures to central counterparties, clearing house and exchanges incurred both through trading and through lending.

  • Initial and variation margin and calculations
  • Broker risk
Case study:

Recommending and structuring exposures to minimise risk.

Workshop Times

Below are typical timings for our courses; upon registration we shall advise you if these have changed.

Breakfast: 8.30am
Course Start: 9.00am
Course End: Between 5.00pm and 5.30pm
Lunch starts between 12.30pm and 1.00pm, and lasts no longer than 1 hour.
Short breaks of 10 - 15 minutes are taken mid morning and mid afternoon.

Please make your course selection
London - £950 + 20% VAT
New York - US$1,350
The majority of Fitch Training programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience on the course page for more details.

For any other course or registration related questions please visit our FAQ page or contact us on enquiry@fitchtraining.com
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NASBA

The majority of Fitch Training programmes are offered at an intermediate and advanced level. There are no specific prerequisite courses to attend our programmes, however some topic knowledge maybe required. Please refer to the target audience to see what level of prior knowledge is required for a specific course.

The pre-course reading materials will be sent to each participant in preparation for their attendance on the course.

Client Comments
"Good insight into the components of analysis of various sectors. My knowledge and understanding was advanced."
- D. Loring
- ABN AMRO