Capital Markets Operations

While portfolio managers, investment bankers and traders receive most of the headlines from activity in capital markets, personnel in the middle and back offices of financial services firms play critical roles in the enabling of trading and markets in general to function smoothly and efficiently.  These inner workings can be complex and involve intricate processes.   Far from the mundane, much of this important part of capital markets is undergoing drastic changes due to financial innovation, new technology and faster transaction and settlement speeds.

Finance IQ offers a wide variety of courses that range from traditional capital markets topics to new ones like Block Chain and FinTech.

Big Data: Application and Risks
FinTech: Opportunity & Risks
Repurchase Agreements & Securities Lending
Equity Trade & Corporate Action Lifecyles
Life Cycle of a Financial Derivative
Treasury Management
Prime Brokerage and Prime Services

Big Data: Application and Risks

The pace of technological development in the financial services sector has created an industry that is on a constant path of evolution. From a changing opportunity set, to unanticipated risks, banks and other financial companies are using data to better understand themselves and the developing marketplace. This one day course will examine how data is collected, how it is used and what affect big data has on the financial services industry.  Using examples, exercises and a case study, the participant will receive a thorough introduction into the industry’s current condition.

Learning Objectives

Outline/Topics:

  • Define big data and explain how it developed
  • Identify the different methods of obtaining big data
  • Explain how banks and other financial institutions use big data
  • Discuss the challenges and risks of using big data
  • Understand the use of big data for regulatory purposes
  • Examine the competitive advantages of using big data

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

1 Day Program
  • What is “Big Data”
    • History and evolution
    • Technology and communication
    • Types of data
    • Market participants and vendors
  • Big Data Sourcing
    • Internal methods
    • External methods
    • Data collection and Apps
    • Monitoring and updating
  • Uses of Big Data
    • Fraud detection
    • Actuarial science
    • Risk management
  • Investment management
    • Algorithmic trading
  • Client information
  • Risks
    • Model risks
    • Compromised input
    • Operational risk
  • Big Data and Regulation
  • Use of Big Data to report information
  • Internal model

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or [email protected]!

FinTech: Opportunity & Risks

Even in its infancy, Financial Technology (FinTech) has already had an impact on many facets of the financial services industry. Although a relatively new phenomenon, Fintech is rapidly becoming an indispensable tool for many business lines.  Fintech is all about disruption, transformation and innovation and will continue to change the way the financial world operates. This one day course will explore how Fintech has developed, the current marketplace and its many uses.  Participants will learn what Fintech encompasses, who the participants are and what the advantages and disadvantages are that come with progress.

Learning Objectives

Outline/Topics:

  • Describe what Fintech is and how it has developed over time
  • Explain the different types of FinTech products
  • Identify the market participants using FinTech products
  • Describe the applications of FinTech in the marketplace
  • Explain the advantages, disadvantages and risks of FinTech
  • Describe the applications of FinTech in the marketplace
  • Explain the advantages, disadvantages and risks of FinTech

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • What is FinTech?
  • Blockchain technology
  • FinTech Uses
    • Virtual currencies
    • Payments
    • Capital market settlements
    • Cybersecurity
    • Big data
    • Digital banks
    • Virtual wallets
  • Market Participants
    • Financial institutions
    • Corporates
    • Technology companies
    • Governments
    • Retail
  • Risks
    • Shadow banking
    • Regulatory oversight
    • Disruption
    • Modelling
    • Unanticipated risks

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or [email protected]!

Repurchase Agreements & Securities Lending

Repurchase agreements (repos) and securities lending have long been central activities in the broker/dealer universe.  This one-day course demystifies both the mechanics and economics of these related activities.  Explained from the perspective of both the broker/dealer and the external client, course participants will learn how practitioners benefit from these types of secured financing.

Learning Objectives

Outline/Topics:

  • Describe the features, characteristics and terminology of repurchase agreements (repos)
  • Explain the mechanics of a classic repo/reverse repo transaction
  • Explain the mechanics of buy/sell agreements
  • Differentiate between classic repo and buy/sell agreements
  • Identify the main market participants/end users in the repo market
  • Explain repo trading strategies
  • Describe the features of a tri-party repo
  • Identify the features and characteristics of securities lending
  • Identify the mechanics of securities lending
  • Differentiate between securities lending and repurchase agreements
  • Explain trading strategies dependent upon securities lending
  • Describe how major firms failed due to their lack of access to the short-term financing

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Repurchase Agreements (Repos)
    • Mechanics of a classic repo/reverse repo transaction
    • Mechanics of buy/sell agreements
    • Main market participants
    • Feature, characteristics and terminology
    • “Haircut”
    • General and Special Collateral
  • Repos in Practice
    • Match book trading (Repo/Treasury Dealers)
    • Yield enhancement/Specials trading
    • Spread trades
    • Leverage
    • Implied repo and basis trading
  • Master Agreements, Tri-Party Repo, Prime Brokers and Hypothecated Assets
    • Master Agreements and documentation related to securities financing
    • Hypothecated assets
    • Tri-party repo
    • Role of Prime Broker
  • Securities Lending
    • Types, features and characteristics of securities lending
    • Process, timeline and mechanics of securities lending
    • Collateral
    • Differentiation with repo
    • Uses within trading strategies
  • Current Issues
    • Monetary policy, the Federal Reserve and the reverse repo program
    • Clearing
    • Liquidity

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or [email protected]!

Equity Trade & Corporate Action Lifecycles

This one-day class provides participants with a thorough understanding of the activities that underpin post-trade processing.   The course will identify the main participants in post-trade processing and walk through the key steps and risks involved in the transfer and settlement of equities.

The remainder of the program will give an overview of corporate actions which involve more complex settlement procedures that require extensive manual processing.  This section will detail how event information is collected and describe the validation processes at each step in the life cycle of a corporate action. Various real-world examples will highlight the extent to which different securities from the same issuer are impacted from one or a series of corporate actions.

Learning Objectives

Outline/Topics:

  • Describe the roles of the various participants in trade and post-trade processing
  • Distinguish between clearance and settlement procedures
  • Discuss controls used to limit fails
  • Contrast the functions of the front, back and middle offices of the broker
  • Identify and contrast the various types of corporate actions
  • Detail the life cycle of a corporate action
  • Distinguish between corporate actions that involve equity and fixed income positions
  • Explain the impact of corporate actions on derivatives positions
  • Explain the impact of corporate actions on traded indices

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Overview of trade life cycle
    • Main participants
    • Key Terminology
  • Trade Execution
    • Traditional markets versus Alternative Trading Systems
  • Trade Capture
  • Trade Enrichment
  • Trade Agreement
    • Purpose & methods
    • Trade confirmation
    • Trade affirmation
  • Settlement
    • Failure to resolved unmatched instructions
  • Failed Trades
    • Definition and causes
    • Implications
    • Prevention
  • Updating Internal Records and Reconciliation
  • Corporate Actions
    • Purpose
    • Impact
    • Market Participants
    • Life Cycle

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or [email protected]!

Life Cycle of a Financial Derivative

Derivatives have become critical financial instruments for both the corporate end-user and the investing professional.  Yet, key legal and operational risks in the global use of financial derivatives remain a mystery, even to many practitioners in this rapidly growing global industry. Transacting derivatives is detailed and document intensive. The architecture of derivatives’ front, middle, and back office functions can present numerous challenges to both on-site and off-site bank examiners, auditors, and compliance professionals. These professionals require specialized and routinely upgraded supervisory skills to meet their demanding objectives.

Learning Objectives

Outline/Topics:

  • Review mechanics of key foreign exchange, interest rate, equity, and credit derivatives
  • Evaluate major components of the 2002 ISDA®
  • Compare and contrast responsibilities and best practices of banks’ front, middle, and back offices
  • Discuss the importance of operations to avoid systemic risk
  • Evaluate the influence of Basel III and financial regulatory reforms on the treatment of financial derivatives
  • Identify key elements in the life cycle of a financial derivative

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Financial Risks and Risk Management
    • Financial products risks
    • Legal risk
    • Operational risk
    • Risk management process best practices
    • Basel II and its influence
  • Overview of Key Financial Derivatives
    • Mechanics
    • Hedging versus speculation
    • Influence of Basel II’s implementation and financial regulatory reform
  • Key components of the 2002 ISDA® architecture
    • Credit and operational issues with derivatives documentation
    • Derivatives documents in the event of a bank failure and resolution
  • Trading Operations
    • Organizational structure and best practices of a front office
    • Organizational structure and best practices of a middle office
    • Back office and best practices

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or [email protected]!

Treasury Management

This introductory course will provide participants with an in-depth examination of what a modern treasury does and how it functions. In this highly interactive program, participants will gain an understanding of corporate funding, cash management and asset liability management.  Risk management is also a crucial component of the modern treasury and techniques to mitigate operational, reputational and market risk (such as FX risk and interest rate risk) will studied.

At larger treasury operations, active participation in the capital markets is also a function of the treasury and this responsibility will be addressed through the use of in-class exercises and role play.   An examination of the current treasury in light of recent scandals, changes in technology and regulations will complete this class.

Learning Objectives

Outline/Topics:

  • Describe the functions of a modern treasury
  • Explain how a treasury manages the different types of risk
  • Describe the different functions within the treasury and how their roles have changed over the years
  • Develop an understanding of liquidity and gap management and why this is so important
  • Describe the impact that recent regulatory changes has had on this business

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • Overview of treasury functions
    • Treasuries in different industries
    • Treasury roles
  • Risk Management
    • Funding risk
    • FX risk
    • Operational risk
    • Liquidity risk
    • Interest rate risk
    • Regulatory risk
  • Cash Management and Funding
    • Liquidity
    • Optimization
    • Technology
    • Funding
  • Asset Liability Management
    • Gap management
    • Exercise in IR gap management
  • Case study

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or [email protected]!

Prime Brokerage and Prime Services

This one day program will focus on the business of prime brokerage and prime services, with a particular emphasis on latest market developments. The course will introduce the participant to the development and history of this business, what services it may (and may not) provide to the client, who the major participants are, what the current state of the business is and why it is so competitive.  With banks focusing on fee generating businesses, prime brokerage is a critical operation and an understanding of its role in the capital markets arena is critical to understanding how the markets currently operate.

Learning Objectives

Outline/Topics:

  • Describe what a prime broker does and why it exists
  • Identify other services that may be offered through a prime brokerage arrangements
  • Explain the different participants and their roles and motivations in a prime brokerage arrangement
  • Understand what makes this business so competitive and why some banks are committing more capital to it and some are dropping out
  • Describe the impact that recent regulatory changes has had on this business

Duration:  One day

Program Level:  Basic

Prerequisites:  There are no prerequisites

CPE:  7.0 CPE Credits

1 Day Program
  • What are Prime Services?
  • Prime Services
    • Concierge services
    • Competitive landscape
    • Current players
    • Case Study: financial crisis
  • Stock Lending
    • What is stock lending
    • Participants
    • Rates & Specials
    • Stock lending versus Repos
  • Custodial Services
    • History
    • Custodial operations
    • Lending and financing
    • Corporate Actions
    • Processing and clearing
    • Reporting

For a detailed outline and additional information on this course or to find out about our other courses, contact us at (646) 244-5190 or [email protected]!