THE 2018-2020 COLLATERAL MANAGEMENT PARADIGM
OVERVIEW “Mandatory collateral usage has transformed the traditional evaluation mechanism in the capital markets affecting every user, yield curve, valuation model and trade workflow. As a financial professional you must understand the developments, evolution and future impact of the markets.�
The interaction of numerous regulatory frameworks such as the European Market Infrastructure Regulation (EMIR), the Uncleared Margin Rules, Basel III (Capital Requirements Regulation (CRR) Capital Requirements Directive (CRD IV), and the Securities Financing Transaction Regulation (SFTR) have ushered in a regulatory storm that has caused havoc within the banking and financial services industries. In order to weather the regulatory storm, banking and financial services firms must re-evaluate their collateral management operations and strategies. The optimisation, allocation and transmission of collateral are now mandatory strategic considerations that firms must implement in order to achieve efficiency collateral management and operational efficiency. At a minimum this requires consideration of issues such as ensuring effective pre-trade optimisation controls, ensuring transparency of collateral requirements and collateral inventory, and netting of collateral exposures. Firms need to ensure that they are moving towards streamlined Straight Through Processing (STP) by reviewing segregation of collateral procedures, monitoring open collateral positions and re-hypothecated positions, modelling future collateral requirements, effectively reporting collateral demands, and ensuring robust netting, valuation, and pricing procedures. This one and-a-half day training event seeks to comprehensively guide attendees through all the latest regulatory compliance, operational, strategic, and technological issues affecting collateral management functions throughout the European Union (EU).
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MODULE 1: AN OVERVIEW OF THE EXISTING REGULATED COLLATERAL ENVIRONMENT •Regulatory Clash: Basel III (Net Stable Funding Ratio (NSFR), Liquidity Coverage Ratio (LCR), Leverage Ratio) v. EMIR Clearing Mandates (Category 3 Firms (2019), Pension Funds (2020) v. Uncleared Margin Rules. •Variation Margin (Cash v. LCR and NSFR Non-Cash Assets), •The Impact of Future Initial Margin (IM) and Variation Margin (VM) Rules (2018, IM >e.1.5tr uncleared OTC derivatives, 2019, IM >e0.75tr uncleared OTC derivatives, 2020, IM and VM, OTC single stock equity and index options, 2020, IM >8bn uncleared OTC derivatives). •Advanced Bank Recovery and Resolution Planning and Bail-in Requirements.
MODULE 4: ACHIEVING STRATEGIC COLLATERAL OPTIMIZATION AND LIQUIDITY MANAGEMENT •Increasing Collateral Efficiency Ratios, Cash-settled Daily Variation Margin calls and Predictive Analytics, Forward Looking Collateral Optimization. •Building Internal Collateral Technology Functions v. Outsourced Collateral Technology Providers. •Holistic Regulatory Collateral Management and Sourcing Increased Liquidity Requirements (Collateral Upgrade Trades, Portfolio Holdings, Portfolio Liquidation, Peer Networks). •2019 and 2020 Regulatory Compliance Roadmap.
MODULE 2: THE SECURITIES FINANCING TRANSACTION REGULATION •The Securities Financing Transaction Regulation (SFTR) Timeline, Firms Affected, Impacted Transactions, Operational Impact. •Securities Financing Transaction (SFT) Reporting (Counterparty Classifications, Collateral Composition, Collateral Reuse, Collateral Haircuts, T+1 Reporting, Investor Reports). •SFT Disclosure Obligations (SFTs and Total Return Swaps (TRS) used and underlying rationale, Counterparty Selection Criteria, Acceptable Collateral, Collateral Valuation, Risk Management). •SFT Collateral Reuse Obligations (Rehypothecation Rights and Notices, Notification of Rehypothecation Risks and Consequences). MODULE 3: EFFICIENT COLLATERAL MANAGEMENT AND OPERATIONAL EFFICIENCY •Collateral Upgrade, Transformation, and Optimization Strategies (Portfolio Margining, Matched Book Dealing, Internalisation, Margin Models, Collateral Upgrades). •Automated Margin Call Management (Email Parsing, Margin Information, Collateral Management Integration). •Enterprise-wide Collateral Management, Collateral Policies, Clearing Strategies, and Digitized legal agreements (e.g. Credit Support Annexes). •Risk Management, Scenario, Resilience, Continuity Planning and Stress Testing Procedures.
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EXPERT TRAINER MODULE 5: COLLATERAL MANAGEMENT AND OPTIMISATION TECHNOLOGIES •Centralisation, digitisation, and management of collateral documentation. •Normalization of trade valuations, data and inventory pricing, internal reporting. •Margin call monitoring and execution, monitoring of collateral balances, reconciliation of trade portfolios. •Collateral eligibility monitoring of inventory, allocation and recall of collateral, algorithmic and waterfall optimisation.
MODULE 6: A REVIEW OF FUTURE COLLATERAL TECHNOLOGY SOLUTIONS •Artificial Intelligence (AI) Technology Solutions, Predictive Analytics, Collateral Management, and Unification of Post-trade Processing and Pre-Trade Analytics. •Smart Data Models, Electronic Legal Contracts, and Digitisation of ISDA® Master Agreements and CSAs. •Peer-to-Peer Buy-Side Tri-party Arrangements and Platforms and Centrally Cleared Institutional Tri-party Services. •Blockchain Technologies, Distributed Ledger Technology (DLT), Smart Contracts, single standardised view of collateral in the Settlement Chain, and Automated Margin Calls.
Sol Steinberg is an over-the-counter (OTC) derivatives markets subject matter expert that specialises in risk management, regulation, market structure, collateral, valuation, financial technology systems, and commercialisation efforts. Sol is the founding principal of his firm, OTC Partners. OTC Partners is a boutique value add firm based in New York that specialises in research, content, and business development. In 2014 OTC Partners developed numerous leading research reports on global capital markets and has helped lead China’s OTC market evolution in Beijing, Shenzhen, Jinan, as well as LATAM, and Europe. Before starting OTC Partners Sol was a senior executive at the world’s leading clearing house LCH.Clearnet. Sol also spent nine years on the buy side at Citi, performing product development, risk management, and valuation for the OTC markets. Sol has a wide-ranging network of asset managers, analytic providers, execution venues, regulatory, and government contacts. He used his eco system to successfully commercialise analytics, data, and other noncommercialised intellectual property. He brought to market several initiatives, including institutional and commercial risk engines such as SMART tool, Risk Explorer, Global Market Risk System for Citi, the largest VAR engine in the world from 2004 to 2006, as well as developing CCP2– a derivative education and certification programme for leading consultancies. Sol also contributed to the OTC industry’s clearing and default management policies for the cleared OTC swap markets, as well as contributing to industry standard risk analytics in times of low market rates.
AWARDS AND HONOURS Waters Magazine’s Award “Best Risk Analytics Initiative 2012” Waters Magazine’s Award “Best Risk Analytics Initiative (Sell Side) 2013” FTF’s award for “Most cutting-edge risk contribution 2013” for developing the SMART Risk Analytics Tool. Global Nominee in 2012 for “Best Practices in Global Financial Risk Management” from the Professional Risk Managers International Association (PRMIA).
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A new depth. A greater insight
EXPERT TRAINER
IHS Markit bring together the deepest intelligence across the widest set of capital-intensive industries and markets. By connecting data across variables, their analysts and industry specialists present their customers with a richer, highly integrated view of their world. That is the benefit of The New Intelligence. IHS Markit are able to isolate cause and effect, risk and opportunity in new ways that empower their customers to make well-informed decisions with greater confidence. IHS Markit is a dynamic team that includes more than 5,000 analysts, data scientists, financial experts and industry specialists. Their global information expertise spans numerous industries, including leading positions in finance, energy and transportation.
Simon Todd is an Executive Director of Business Development at MarkitSERV, the derivatives post-trade processing service from IHS Markit. In his nine years with firm, Simon has been instrumental in the design and implementation a wide range of products and workflows aimed at improving efficiency and reducing operational risk in OTC derivatives markets. Simon is active in numerous industry committees including the ISDA Credit Market Infrastructure Group (CMIG) and is a leader in MarkitSERV’s implementation of the revised ISDA Credit Derivatives Definitions in 2014 and also the firm’s work to facilitate regulatory trade reporting. Before IHS Markit, Simon worked at Bank of America where he successfully introduced front to back connectivity for the DTCC Trade Information Warehouse (TIW) achieving their regulatory mandates and drove operational efficiencies. He began his career at JPMorgan as a CDS operations specialist. Simon graduated from Anglia University in the United Kingdom where he studied Business and Finance.
About Them IHS Markit is the leading source of information and insight in critical areas that shape today’s business landscape. Customers around the world rely on them to address strategic and operational challenges.
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Awards
The New Intelligence gives leaders a competitive edge when making decisions. IHS Markit analysts and experts reveal the interdependencies across industries and markets to bring their customers an even greater understanding of the global economy and a 360-degree view of risk, opportunity and financial impact. They look forward to working with leaders in business, finance and government to help them make well-informed decisions.
2017 SWIFT Certified Application Corporate Actions label | SWIFT 2017 SWIFT Certified Application Securities Settlement label | SWIFT Best corporate actions processing solution | FTF News Best Sell-Side Data Management Product | Sell-Side Technology Awards 2017 Best Sell-Side Newcomer (Product) - FRTB Solution Suite | SellSide Technology Awards 2017 RiskTech100: 2017 Top Ten | Chartis RiskTech100 Awards Best Sell-Side Technology Provider of the Year | Sell-Side Technology Awards 2017
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KEY BENEFITS
EXPERT TRAINER
•Highly comprehensive training course materials (training manual, training materials, PowerPoint presentations, definitions booklet). •Highly interactive sessions with the training course expert which can reflect the attendee’s business perspectives. •Pre-course questionnaire to identify the attendee’s key course objectives. •Post-course follow up to ensure all key course objectives have been met. •Unique insights into collateral management strategies and technologies.
Rodrigo Zepeda is Co-Founder and Managing Director of Storm-7 Consulting. He is an expert consultant who specialises in derivatives and banking and financial services law, regulation, and compliance. He is an expert in a very broad range of regulatory compliance frameworks such as FATCA, the OECD CRS, MiFID II, MAD 2 MAR, PSD2, CRD IV, Solvency II, OTC Derivatives, CCP Clearing, PRIIPs, BRRD, AML4, and the GDPR. He holds a LLB degree, a LLM Master’s degree in International and Comparative Business Law, and has passed the New York Bar Examination. He was an Associate (ACSI) of the Chartered Institute for Securities & Investment from 2004 to 2014 and is now a Chartered Member (MCSI). He has created and delivered numerous conferences and training courses around the world such as ‘FATCA for Latin American Firms’ (Santo Domingo, Dominican Republic, Panama City, Panama), ‘MiFID II: Regulatory, Risk, and Compliance (London, United Kingdom (UK), and ‘Market Abuse: Operational Compliance’ (London, UK). He has also delivered numerous in-house training Courses around the world to major international financial institutions such as The Abu Dhabi Investment Authority (MiFID II: Operational Compliance, Abu Dhabi, the United Arab Emirates), the United Nations Principles of Responsible Investment (MiFID II: Final Review, London, UK), and CAF, the Development Bank of Latin America (Swaps and Over-the-counter Derivatives, Lima, Peru). He is a Reviewer for the Journal of Financial Regulation and Compliance and has also published widely in leading industry journals such as the Capco Institute’s Journal of Financial Transformation, the Journal of International Banking Law and Regulation, as well as e-books on derivatives law. Noted publications include “Optimizing Risk Allocation for CCPs under the European Market Infrastructure Regulation”; “The ISDA Master Agreement 2012: A Missed Opportunity”; “The ISDA Master Agreement: The Derivatives Risk Management Tool of the 21st Century?”; “To EU, or not to EU: that is the AIFMD question”; and “The Industrialization Blueprint: Re-Engineering the Future of Banking and Financial Services?”
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Client Services UK + 44(0)20 7846 0076 client.services@storm-7.com www.storm-7.com
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