London School of Operations

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Overview

The London School of Operations has been designed to provide a comprehensive understanding of the operational aspects of the financial markets through the entire transaction life cycle. It covers the capital markets products and how and where they are traded and explains the different trading and investment strategies and how they are supported operationally. The course explains the market participants, how they interact and how they are structured.

The concept of straight through processing (STP) is analysed through the life cycle of a trade and the course explains what can go wrong and the operations controls required to ensure efficient transaction processing and the avoidance of operational risk.

Attend this intensive and highly practical five day course and learn:

  • What are the capital market products; bonds, equities, derivatives and foreign exchange
  • The new issue process
  • How and where products are traded; OTC and on-exchange
  • The basic trading and investment strategies; long, short, hedge and arbitrage and the operational impact of each one
  • Operating in emerging markets
  • Who are the market participants and how they interact
  • The life cycle of a trade and transaction processing
  • STP and why it can break down
  • The clearing and settlement processes including CCPs, the (I)CSDs and global custodians
  • What can go wrong and fails and fails management
  • OTC and exchange traded derivatives and how they are processed
  • The importance and economics of securities lending and repos
  • What is collateral and how it is managed
  • Corporate actions and how they are managed
  • What are the risks in the international markets; market, credit and operational risk
  • How to measure and manage operational risk
  • The roles of the middle office and the operations department
  • Product control; managing inventory and P&L
  • The mark to market (MTM) process and the data providers
  • The detection and reporting on money laundering
  • The end to end control process and the importance of reconciliation

 

Course background

The School focuses on operations in the international capital markets and is intended to provide a thorough grounding for those who are embarking on or developing a career in operations in the financial industry. It will also benefit those who need to understand how the capital markets operate, what are the operational risks and how they can be controlled. You will be given a thorough and clear understanding of how transactions in international capital markets’ products are processed, what can go wrong and the measures required to ensure the highest level of STP.

Teaching methods

The teaching methodology used on this course combines formal theoretical instruction with frequent use of exercises and case studies. These are based on real situations experienced by the course director in his over thirty-five-year involvement in this business. The course is intended to be practical and interactive, with delegates encouraged to ask questions throughout. The course content is intended to give delegates an understanding that will be of immediate practical use in the workplace. The lecturer will be available throughout the duration of the course to offer additional help if required. Delegates will be divided into to small teams to work together on the exercises that will include some simple calculations for which a calculator will be required.

Who should attend

 

  • Operations personnel from investment banks, broker/dealers, prime brokers, fund managers, pension funds etc.
  • Middle Office and Risk Managers
  • Product Controllers
  • Internal and External Auditors
  • IT Developers (focused on operations)
  • Business Analysts and Consultants
  • Compliance staff
  • Regulators
  • Graduate and Management Trainees

Venue

Venue to be confirmed

All our courses are held in 4 or 5 star city centre hotels. Further details will be sent on registration.

Related Courses

Inhouse


 

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:





Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.

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We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:


Read more about our offering or complete a call back request to speak to a learning specialist.

 

Agenda

Day 1

Capital Markets Products

  • Fixed income and FRNs
  • Equities and ADRs
  • Convertible bonds and warrants
  • New Issues
  • Primary and secondary markets
  • Derivatives
  • OTC and exchange traded derivatives products
  • F/X
  • Trading strategies-long, short, hedge, arbitrage
  • Repos-sale and repurchase agreements
  • Trading strategies and impact on operations
  • Trading strategies and risk
  • Established versus emerging markets

Exercise: Delegates are asked, in their teams, to make recommendations for a new bond issue (see handout)

Day 2

Capital Markets Trades Processing

  • The market participants
  • The sequence of a securities trade
  • Static data
  • Clearing
    - CCPs
  • Settlement
    - CSDs
    - ICSDs
    - DvP, DfoP, etc
    - SWIFT
  • Global custody
  • What can go wrong?
  • Fails and fails management
  • Buy-ins
  • Interest claims
  • STP

Exercise: Delegates are asked, in their teams, to analyse a fail report and recommend actions


Day 3

Derivatives and Derivatives Processing

  • Introduction
  • The characteristics of OTC, cleared and ET derivatives
  • The uses of derivatives-leverage and risk taking, hedging and arbitrage
  • Leverage and the Basel Accord (Basel I, II and III)
  • Regulation of the derivatives markets OTC and ETD
  • The ISDA Master Agreement and CSA
  • ETD Trade processing
    - Trade capture and execution
    - Confirmations
    - Exercise: Delegates are asked to draw a trade flow diagram for an ETD
    - The CCP
    - Margin-initial and variation
  • OTC trade processing
    - Trade Capture
    - Matching
    - Settlement
    - Reconciliation
    - Netting

Corporate Actions

  • Corporate actions explained
  • Rights issues
  • Stock splits, bonus issues, etc
  • Dividends
  • Voting
  • Coupons
  • Corporate action processing
  • What can go wrong

Day 4

Securities Lending, Repos and Collateral Management

  • Securities lending
  • What is securities lending (SL) and what is its importance
  • Who should lend/borrow
  • The economics of SL and SB
  • How the market operates
  • What are the risks

Case study: Securities borrowing in a convertible bond arbitrage transaction

Cash and Collateral Management

  • The importance of cash management
  • How to manage cash
  • Cash as collateral
  • Collateral management
  • Why collateral is needed
  • Reconciliation of ‘Nostro’ Accounts
  • Non- cash collateral and managing non-cash collateral
  • Bi-lateral vs. tri -party arrangements
  • Agreeing a collateral schedule
  • Mark to market (MTM)
  • Collateral risks

Guest speaker: (TBA) an industry specialist will be invited to discuss an important topic affecting international capital market operations

Day 5

Product Control and P&L Calculations

  • Product control
  • Responsibilities and reporting lines
  • Position control and reconciliation
  • Limit control and reporting
  • Escalation of issues
  • P&L
  • MTM-mark to market
  • Price feeds and the service providers
  • Realised versus unrealised P&L

Exercise: Using a day’s trade report (see handout), delegates will calculate realised and unrealised P&L

  • ‘Dirty’ vs. ‘clean’ pricing
  • Calculating accrued interest
  • ‘Cum’ versus ‘ex’ dividend
  • Inventory control and reconciliation
  • P&L reconciliation
  • Top line versus bottom line P & L
  • Analyzing and allocating costs

Control and Infrastructure

  • Reporting lines and segregation of duties
  • Escalation of issues
  • Audit, Compliance, MLRO and Legal
  • The ‘whistle blower’
  • The end to end control process
    - Pre-dealing / dealing controls / M.O. functions
    - Processing / position and payment controls
    - Reconciliation and accounting
    - Documentation, reporting and compliance

Course summary and close

Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product