International Securities Settlement & Custodial Services

Course description

This 2 day training program is designed to provide delegates with practical  knowledge about the key concepts, systems, processes and procedures in international securities settlement and custodial services as well as operational risks involved.

You will have a chance to gain skills necessary to facilitate day-to-day transactions and communication processes between all parties involved as well as all stages about clearing and settlement process, the role of exchanges and clearing houses, functioning of the settlements department, role of payments in the settlements.

Day two focuses on the role and functioning of global custody, services provided, derivatives settlements, corporate actions and risk management. You will also learn about the latest sector’s trends and changes.

You will also learn about the impact of the MiFID and Target 2 Securities initiatives on the market.

The course is conducted by senior experts with many years of international experience and includes many international case studies and exercises.

What will you learn

By attending this program you will gain:

  • Practical understanding of international securities settlement processes and custodial services, key players and concepts and relationships between them
  • A clear understanding of the operational risks involved in these two services
  • An update on recent developments of international securities settlement and custodial services including Target 2 Settlements and MiFID
  • An understanding and appreciation of the communication processes between all the parties involved in a given transaction

Main topics covered during this training

  • Securities settlement – exploring key concepts and market context
  • The relationship between exchanges and clearing houses
  • Trade cycle stages
  • Understanding the role of a settlement department
  • The role of payment systems in securities settlements
  • Settlement process including pre-settlement, settlement and reconciliation processes
  • European switch to T2S (TARGET 2 Securities) settlement system
  • Timing in cash management and Forex exchange
  • The role and operations of CLS
  • Global custody and derivatives clearing
  • Core and value added services in global custody
  • Identifying and managing risks in clearing, global custody and settlement
  • The impact of ‘Corporate actions ‘ in custody services
  • Key legal issues
  • MiFID Directive
  • Exploring industry trends

Who should attend

Professionals from Custodial and Investment Banks, Exchanges, Hedge Funds, Pension Funds and Endowments and other institutional investors from the following departments:

  • Custody Services
  • Settlements
  • Transactions & Processing
  • Compliance
  • Risk Management
  • Credit Risk
  • Operations
  • Reporting
  • IT
  • Customer Relationship

International Securities Settlement and Custodial Services – A Two Day Programme

Introduction to the clearing and settlement process

  • Wall Street 101 – an introduction to the securities trade life cycle
  • Underlying principles of securities and derivatives settlement
  • The structure and operations of a typical securities trading organisation/firm
  • Cashiering Firms, Custodians, Commercial & Other Banks, Prime Brokerage
  • Clearing – what it is and how it works – basic structures for clearance
  • Key Concepts – Beneficial ownership, Collateral, Counterparty credit limits, Daylight overdraft, Default, Dematerialization, Failed transaction, Free riding, Fungible, Internal settlement, Lamfalussy Standards, Loss-sharing agreement and pools, Netting, Settlement date, Standard settlement instruction, Unwind, Zero hour rule
  • Capital requirements
  • Chain of entitlements
  • Immobilisation and dematerialisation
  • Processing book entry (electronic) and certificated (paper based) securities

Exchanges and clearing houses

    • The role of the exchanges
    • The role and function of the clearing house
    • The interaction between exchanges and clearing houses
    • Derivatives – what they are and how they work
    • Derivatives clearing – why the process differs from regular securities; actions to make the process safer.
    • Recent changes in the Derivatives clearing process
    • Bilateral clearing.
    • Central Counterparties
    • Nominee Services
    • Vault Management (immobilised securities)

Settlements – The role of the settlements department

  • Importance of settlement Relationships and responsibilities
  • Management information
  • The relationships with the counterparties dealt with in the settlement of a typical trade
  • Rules and conventions for settlement
  • Differing conventions for different security classes (equities, bonds, derivatives)
  • CPSS-IOSCO Technical Committee Recommendations for Securities Settlement Systems
  • Delivery versus Payment Interaction between payments and securities settlement systems

Nominee Services

  • What is a ‘nominee’/
  • Key nominee activities
  • Announcements & communications
  • Voting
  • Entitlement actions

The role of payment systems in securities settlements

  • Large Value Transfer systems (LVTS) including Real Time Gross Settlement (RTGS) systems
  • International payments – concepts, procedures and settlements
  • CLS (Continuous Linked Settlement)

Settlement processes

  • Pre-settlement (including; input of settlement instructions, input scenarios, matching, monitoring transactions, changing transaction input, shaping deliveries, splits).
  • Settlement (priorities and queues, circle processing, monitoring transaction, settlement, electronic transfer of title (ETT), bad deliveries)
  • The importance of securities timing
  • Overcoming problem areas
  • Cash management and Foreign Exchange – timing and importance
  • Settlement for residual securities
  • Derivatives settlement
  • The reconciliation process and its importance

Group Discussion 

Using their own experience delegates will examine preconceptions that they may have held regarding the securities settlement process against the previous sessions’ material.

DAY TWO

CLS – its purpose, role and operation

  • Herstatt risk – a brief introduction into foreign exchange risks
    • Differing settlement methods for foreign exchange settlements.
    • Continuous Linked Settlement.
    • Why CLS is relevant for securities settlements.
    • PvP Requirements of overlapping national RTGS systems.
    • CLS & correspondent banking.
    • Current CLS statistics

Case Study: South Africa – STRATE Interbank money markets and payment systems: A Two Way Relationship

Global custody 

  • Who are the users and the providers?
  • Basic structure for custody services
  • The role of the derivatives clearing broker
  • Sub Custodian
  • Life cycle of a trade – the linked phases of processing
  • Trade settlement
  • Market practice: cut-off and value dates
  • Safekeeping

Discussion

Using own experience delegates will examine preconceptions against the previous sessions’ material

Global custody – core services

  • The services a global custodian and derivative clearer offer its clients – settlement, safekeeping of securities, income collection, corporate actions management, cash management, funding, tax management, reporting – the information chain e.g. SWIFT, banking facilities
  • How custody services work
  • Central Securities Depositories (CSDs)
  • International Central Securities Depositories (ICSDs)
  • Paper trail from actual transactions to actual deposit of securities with custodians
  • Differences between Domestic & International CSDs

Global custody – value added services

  • Investment accounting
  • Master custody / master recordkeeping
  • Securities lending, equity repos and collaterals
  • Trustee services
  • Portfolio valuation
  • Collateral management
  • Describing how securities lending operates in simple terms.
  • Country-specific depositories in Hong Kong, India, Indonesia, the Philippines and elsewhere

Target T2 Securities

  • What has driven the need for T+2?
  • What are the T+2 benefits?
  • The Target T2S migration
  • How T+2 impacts clients transactions
  • The scope of T+2 in T2S
  • What is not in scope
  • The impacts of Target 2 Securities
  • Derivatives and T+2

Custody services “corporate actions”

  • What are “corporate actions” and why do they occur?
  • Common types of corporate actions and examples
  • The growing importance of proxy voting
  • Importance of timing
  • Communicating Corporate Actions
  • Managing Corporate Actions Risk

Identifying and managing risks

  • Credit, Replacement cost, Principal, Delivery versus Payment, Liquidity, Settlement, Custody, Operational, Legal and Systemic risks
  • In securities clearing, settlement & custody: Settlement, Operational, Financial, Market, Loss of title, Insolvency, Payment, Failed Trades, Cross border operations
  • In payment systems: Settlement, Operating, Payment Finality, Liquidity, Systemic, Zero hour bankruptcy rule
  • Specific risks relating to custodians – examples of what can go wrong
  • IOSCO and technology risk concerns

– Lack of appropriate market surveillance tools

– Risk created by automation

– Identified industry issues

– IOSCO April 2013 Report

Legal environment

  • Key legal issues

Exercise

Playing the role of Risk Manager: Establishing where we are in relation to risk mitigation, the industry recommendations and how far must we go to reach them. An attempt to establish if full compliance of the recommendations is beneficial or harmful to risk management?

Market in Financial Instruments Directive (MiFID)

  • MiFID Explained
  • How Trading Split Across Exchanges
  • Unintended Consequences of MiFID
  • Emergence of MiFID 2
  • Dark Pools
  • Dark Pools Under MiFID 2
  • Automated Trading

 

Trainer

Richard’s professional experience spans over 25 years. He started his career with Wells Fargo Bank, following by Fundtech and then moving to international advisory and consulting for the private and high-tech sectors providing high-level consulting, business analysis, project management and training to a wide range of banking clientele across the globe.
Over his career Richard was involved in International Trade Finance, Cross Border Payments and Settlements, Operational Risk, AML and Corporate Governance amongst others.

He has spent extensive time servicing a diversity of financial institutional clients in many countries including: UK, Ireland, China, Singapore, Hong Kong, Philippines, Korea, Malawi, Ghana, Nigeria, Kenya, South Africa, Poland, Sweden, Netherlands, Greece, Norway, Bermuda and across North America.

Clients that Richard has trained & consulted to include: JP Morgan, Abu Dhabi Commercial Bank, Qatar Exchange, Abu Dhabi Investment Authority, Central Bank of Egypt, Irish Gas, UBS, Central Bank of Ireland, Central Bank of Norway, Merrill Lynch, PGGM, BP, Asian Development Bank, African Development Bank, Instinet, Fundtech, European Central Bank, Brunei Investment Agency, British Steel Pension Fund, Salesforce and Tullet Prebon amongst others.

 

FAQ

We offer banking and finance courses as well as soft skills and business management training. You can either attend an open public course in London or Dubai or arrange customised in-house training to be delivered in any of your offices worldwide.

Most of our public courses are run over 2 full days. Some programmes are offered as a 1 or 3 day training.

In-house training is tailored to client’s requirements and can be organised over 1 day, 2-3 weeks or longer.

Public courses are organised mainly in London and Dubai. Occasionally we organise courses in other centres like Paris or New York. Check our public course calendar for the current list of programmes. We use a range of training venues, all in the centre of the cities and with excellent transport links to the airports and train stations.

In London we use venues in the centre (near Oxford Circus station or in Mayfair) or in the City (near Liverpool Street or Moorgate stations).

In Dubai our courses are organised in one of 4-5* hotels in the Deira district. Once you register we will send you detailed information together with accommodation options if required.

Our in-house courses can be delivered anywhere in the world. We work with over 25 trainers worldwide. Contact us do discuss your requirements. Check our list of available programmes.

Our courses are run in central locations from 9 a.m until 5-5.30 p.m. There are 2 coffee breaks and a lunch break. Lunch is always provided in the venue.

Dress code is smart casual.

All our programmes are taught by senior specialists who have spent many years in their respective sectors, working as senior managers and head of departments, so they understand very well the market and the challenges you are facing.

The experience of our trainers allows us to create very practical programmes, focused on current market trends and challenges. You can be sure that you will gain the knowledge which can be instantly applied in your workplace after the course. You will be analysing real life case studies, take part in group exercises and discussions as well as role plays, whenever applicable.

We want our courses to be as practical and interactive as possible so we limit the number of participants in order to optimise your time with the trainer and allow you to ask questions which are important for you.

In order to understand your requirements and expectations, we will send you a pre-course questionnaire.

You will also receive post-course support so if you have any questions after you left the training, you are welcome to contact us.

There are 2 easy ways to register:

  1. Go to the course of your choice and click Register Now button to fill the registration page
  2. Email us to enquiry@eurekafinancial.com

After you register, we will send you registration confirmation and an invoice so you can arrange the payment. Please note that your place is not confirmed until we receive it.

If you register within Early Bird discount period, there’s limited time to arrange the payment in order to be eligible for the discount. You will find all the details on the invoice.

We don’t advise to make any travel and hotel arrangements until you receive full course confirmation from us.

We will send you venue and course details as soon as possible but most likely about 3-4 weeks prior to the course commencement.

You can pay by:

  • Making a bank transfer
  • Debit/credit card
  • Cheque payable to Eureka Financial Ltd. - only within UK

Just mark preferred paying option on the registration form. Whichever form of payment you choose we will always send you an invoice.

If you pay by card, a 2.2% processing fee will be added. We will send you authorisation form so you can give us your card details.

Included in the price of a public course are:

  • Course tutorial
  • Take away course materials
  • Course Certificate
  • Lunch on the days of the training as well as drinks and snacks throughout the course

The price doesn’t include accommodation, flights, transfers and any additional costs outside of the training venue.

Yes, we always offer Early Bird discount, so the sooner you register the more savings you can make. We also offer group discounts and if you register for 2 or more programmes at the same time.

If you are a full time student or unemployed, we offer a 25% discount of the full price of the training. Student ID or unemployment status confirmation is required to claim this discount.

If you attend one of our courses you will be entitled to a special discount for a year after the last course you attend with us. Also, if you have attended and recommended us to a friend, both you and your friend will receive a special discount. You will receive more information about it after you attend the course.

See our Customer Loyalty Discounts page for more details.

All our courses based in the UK are subject to the VAT charge of 20%. This fee is irrespective of the country of residence of the delegates.

You can, however, claim the VAT back by contacting UK tax office - HMRC, and filling the relevant form, as long as you comply with the following rules:

For Delegates coming from the EU countries

If you represent a registered business in another EU country, you can use the Refund Scheme to reclaim VAT you pay in the UK as long as all of the following apply:

  • You're not registered for VAT in the UK and don't have to, or can't be, registered here
  • You don't have a place of business or a residence in the UK
  • You don't make any supplies in the UK

You can find some more information here. In order to claim the VAT you have to fill Form 65.

For the Delegates from Non EU countries

If you represent a registered business in a non-EU country, you can use the Refund Scheme to reclaim VAT you pay in the UK as long as all of the following apply:

  • You're not registered for VAT in the UK and don't have to, or can't be, registered here
  • You don't have a place of business or a residence in the EU
  • You can only use the Refund Scheme if your own country operates a similar scheme and makes it available to UK businesses. If your country has its own Refund Scheme but doesn't let UK businesses use it, you can't claim under the UK Refund Scheme.
  • You don't make any supplies in the UK

If the following rules apply to you, please fill the 65A form and send it to HMRC.

If you are unable to attend the course, you can either send a replacement at no extra charge or, up to 20 working days before the training, you can transfer your booking to another course within the next 6 months for an additional fee of 25% of the full course value. Please note that you can only transfer once.

Alternatively, for cancellations requests received more than 20 working days before the course date we will offer a refund less an administration fee of 10% of the course price.

We regret that no refunds can be given after this period. Non-attendance without any notification will be charged at full rate.

Cancellations must be made in writing and reach our office 20 working days prior to the course date.

Your place on a course is not guaranteed until we receive the payment. All payments must be made in full before the course date.

All our trainers have been working for many years in their respective sectors before they begun to teach so they bring a wealth of practical experience to the classroom.

Most of them used to work for 15 or more years in the financial sector and corporate world, and were holding positions of Directors, VP and Senior Managers. Some of them have published books and have written articles for specialised magazines and newspapers including FT, The Independent, The Times etc. You can find detailed biography of each trainer on the page of the course you want to register for.

Yes, you will receive a Certificate of Attendance at the end of the course you attend.

If you have to apply for a Visa to attend a course in the UK, we will issue a letter to support your application. The letter will be issued only after the payment for the course has been made.

It is delegate’s responsibility to obtain a Visa and failure to do so will not make the participant exempt from the cancellation policy.

Anyone suspected of applying for a training course simply to gain a Visa letter will be reported to their embassy.

We will need the following information to issue an invitation letter:

  • Full name as it appears on your passport
  • Date of birth
  • Passport number
  • Passport issue date
  • Passport expiry date

18 - 19 Jun 2020, London

Register by 31 Jan to save £300

Early bird price £1795

Regular price £2095


5% discount for 2 and 10% discount for 3 people.


This topic can be arranged on in-house basis. If you have a group of 4 or more we can customise it and deliver in any location worldwide. Contact us to discuss your requirements


WHAT PAST DELEGATES SAY

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