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FINANCIAL MARKET COURSES

Life of a Trade – Ongoing Position & Risk Management

This course describes ongoing position and risk management. It outlines the asset servicing solutions that custodians provide for their customers, including services related to corporate actions. The course provides an understanding of counterparty credit risk and how it is reduced, before exploring trade reporting and reconciliation. Post-trade transaction cost analysis is covered in detail, including a discussion of the various types of transaction cost and the methods by these costs can be measured. The course concludes with a discussion of profit and loss (P&L) and risk reporting.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Identify the various ongoing position management functions that institutions must carry out

    Recognize the purpose and benefits of post-trade transaction cost analysis

    dentify the difference between realized and unrealized P&L and how companies report both P&L and risk exposures

  • COURSE OUTLINE

    Topic 1: Ongoing Position Management

    Asset Servicing & Corporate Actions

    o Types of Corporate Action

    • Mandatory

    • Mandatory with Options

    • Voluntary

    Managing Counterparty Credit Risk (CCR)

    o Netting

    o Margin

    o Central Counterparties (CCPs)

    Reporting

    o Internal Reports

    o External Reports

    o Effective Reporting

    Reconciliation

    o External & Internal Reconciliation

    o Cash Reconciliation & Depot Reconciliation

    o Portfolio Reconciliation

    Topic 2: Post-Trade Transaction Cost Analysis

    The Need for Post-Trade Transaction Cost Analysis

    Types Of Transaction Cost

    o Execution Costs

    • Desk-Timing Costs:

    • Bid-Ask Spread Costs

    • Market Trend Costs

    • Incremental Market Impact Costs

    o Opportunity Costs

    o Using Transaction Cost Measures

    o Benchmark Comparison

    o Implementation Shortfall

    Topic 3: P&L & Risk Reporting

    What is P&L & Risk Reporting?

    P&L Reporting

    o Realized vs. Unrealized P&L

    • Mark-to-Market vs. Mark-to-Model Methods

    o Fair Value Accounting

    o Balance Sheets & Income Statements

    • Off-Balance Sheet Instruments

    Risk Reporting

    o Value at Risk (VaR)

    o Sensitivity Measures

    • Dollar Value of a Basis Point (DV01)

    • Beta

    • Greeks

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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