Collateral Management

Objectives

The course is aimed at developing a foundation in the secure and controlled processing of collateral in a financial institution, with particular focus on the operations aspects. This course is equally relevant to the buy-side and sell-side of the business.

This training course explores the essential purpose of collateral, its application in a number of transaction types, and the lifecycle of collateral (including valuation, margin calls, substitution, etc.). Throughout the course, both primary risks and mitigating measures are highlighted.

Target Audience

This course is suitable for staff that are new to the subject of collateral, and for those that are currently working within a collateral function and who require a broad understanding of the transactions (e.g. repo) that necessitate collateral and the typical lifecycle of collateral.   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 receive 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 operations and in recent years on derivative operations and transactions involving collateral (including securities lending & borrowing). 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 Outline


Session 1 - Introductory Session

  • Definition
  • Purpose of collateral 

  • Why collateral became popular

Session 2 - Transaction Types Necessitating Collateral #1

  • Secured cash borrowing and lending

  • Cash borrowing at CSDs & custodians

  • Foreign exchange

Session 3 - Transaction Types Necessitating Collateral #2

  • Securities lending & borrowing
  • Repo
  • OTC derivatives

Session 4 - Types of Collateral

  • Cash
  • Bonds

  • Equity

Session 5 - Legal Protection

  • Necessity of legal protection

  • Master agreements and credit support annexes
  • Specific clauses
  • Implications for Operations

Session 6 - The Collateral Lifecycle #1

  • Collateral eligibility 

  • Collateral selection & optimisation

  • Calculating market value & collateral value
  • Haircuts

Session 7 - The Collateral Lifecycle #2

  • Revaluation, margin calls
  • Thresholds, minimum transfer amounts

  • Agreeing collateral, settlement methods
  • Settlement instructions, successful & failed settlement

Details of next seminar

Date to be announced soon
Copenhagen, have a look at the venue.

This is a joint ICMA / ACI FOREX DANMARK run course. Based in Copenhagen, ACI FOREX DANMARK, the financial markets association aims to educate and heighten the professional and ethical level amongst members and elevate the effectiveness of currency markets.

Fees

The cost of the Collateral Management course is DKK 7,300.00 for both ICMA and ACI FOREX DANMARK Members and DKK 9,500.00 for non-members. Please note this is a new collaboration between ICMA and ACI FOREX DANMARK and this first course is delivered at a discounted price as an introductory offer.  Accommodation is included in the price as the Copenhagen course is a classroom based, residential course.

For more information

This course is available on a group booking basis only, for more information please email cm@icmacentre.ac.uk.