January 18, 2007

Global Securities Processing

 

 Trading and Settlement

  • Overview of Global Trading
  • Trends in the Global Markets
      • Linked and merged exchanges
      • Linked CSDs
      • VMU
      • CCP
  • Order and instruction flow
  • Participants
  • Issuers, Transfer Agents and Registrars
  • Investors
  • Brokers
  • Banks
  • Clearing and Settlement facilities
  • Service Organizations
  • The Execution of International Transactions
  • Marketplace structure
    • Exchanges
    • ECN
    • ATS
    • Floor vs. electronic
  • Participants
    • Market Makers
    • Specialists
  • Advantages and disadvantages of the methods of execution
      • Order or Price Driven
  • Trading Regulations
      • Types of Orders
      • Special Instructions
      • Unit of Trading
      • Required Information
      • Restrictive Markets
  • Comparison of methods for equities, debt, derivatives and F/X

Workshop

Participants will examine the methods of trade execution: expectations of the investors vs. the services provided by the broker/trader/marketplace

Trades Processing

  • Creating the trade confirmation and trade instructions
  • Standard Settlement Instructions
  • Instruction Flow and the VMU

Clearance and Settlement Procedures

  • Defining the Clearance Process
      • Matching
      • Netting practices and the CCP
      • Trade Guarantee
  • Comparison of Clearance facilities
      • Vendors
      • Role of the Clearing House
      • International Clearing Depositories (ICSDs)
      • Government Securities and the Central Bank
  • Comparison of clearance methods by instrument
      • Equities
      • Debt
      • Derivatives
      • Currency (F/X transactions)
  • Defining the Settlement Process
      • Physical vs. Book Entry Settlement
      • Free or Delivery vs. payment
      • Instruction Matching
      • Securities transfer systems
      • Funds transfer systems
  • Settlement Risk Factors
      • Delivery vs. Payment
      • Depository Links
        • With payment system
        • With registrar
      • Close Out Procedures
        • Penalties
        • Buy-in / Sell-out procedures
      • Settlement in the ‘no-fail’ markets
      • Murphy’s Law

Workshop

Participants will examine steps in settlement and develop a plan to monitor and control settlement risk

Risk Assessment and Management

  • Basel II Accord
  • Three Pillars
      • Minimum Capital Requirements
      • Supervisory Review Process
      • Market Discipline
  • Credit Risk
  • Operational Risk
  • Market Risk

Custody

  • Services of the Global Custodian Bank
  • The Network
      • Global, Regional and Local (sub) custodians
      • Rule 17f-5/6/7 and the local custody of securities
  • Core Services
      • Processing Trade Instructions
      • Cash Management
      • Processing Corporate Actions
      • Processing Dividend and Interest Income
  • Value Added Services
      • Processing tax withholding and reclaims
      • Processing proxy voting
      • Securities Lending
      • Risk Assessment and Management
        • Identifying and Controlling Risk
          • Control Reports
  • Services of the Local Custodian Bank
  • Receipt, delivery and safekeeping of securities
  • Notification and processing capital changes
      • Redemptions, conversions, exchanges, tender offers
      • Exercise or sale of rights issues
  • Processing Dividend and Interest Income

Workshop

Participants will analyze a subscription rights issue, subscribe or sell the rights and evaluate the risks.

Cash Management

  • Financing Requirements
  • Funds Reconciliation
  • The Foreign Exchange Marketplace
      • Currency Controls
      • Spot vs. Forward execution

International Securities Lending

  • Definition of Securities Lending
  • Definition of Repurchase Agreement / Reverse Repo
  • Participants
  • Borrowers
  • Lenders
  • Agents (Tri-Party)
  • The Process
  • Initiation
  • Transfer of securities and collateral
  • Revaluation
  • Transaction close-out
  • The Risks and rewards