Central Counterparties, Clearing Houses & Exchanges

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.

Financial risk

• Managing liquidity risk
• Appropriate levels of leverage and capital.

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.

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.