International Securities Settlement and Custodial Services

15-16 November 2010 London

International Securities Settlement and Custodial Services - A Two Day Programme

Introduction to the clearing and settlement process

• Underlying principles of securities and derivatives settlement
• The stages in a typical trade cycle
• 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
• 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

Case Study: ASEAN Economic Community (AEC) and Initiative of Interlinking Payment & Settlement Systems of ASEAN Member Countries

Exercise
Comparing and contrasting the “Initiative of Interlinking Payment & Settlement Systems of ASEAN Member Countries” (case study) with the key concepts presented at the start of the day

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

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)

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

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

DAY TWO

Global custody and derivatives clearing

• 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 experiences 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

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

Case Study: CSD Linkage services – Korea Securities Depository

Custody services “corporate actions”

• What are “corporate actions” and why do they occur?
• Common types of corporate actions and examples
• Impact of corporate actions on derivative products
• The growing importance of proxy voting
• Importance of timing
• Industry initiatives

Identifying and managing risks

• In securities clearing, settlement & custody
• Settlement, Operational, Financial, Market, Loss of title, Insolvency, Payment
• In payment systems
• Settlement, Operating, Payment Finality, Liquidity, Systemic, Zero hour bankruptcy rule.
• Examples of what can go wrong
• Emerging markets risk

Industry trends and the future

• Changes taking place in the industry
• The financial crisis – its effects
• Industry recommendations: G30 and ISSA

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?

Richard Barr

Richard holds a B.S. in International Business Administration from San Jose State University in California. His professional experience spans 19 years, five of which were spent with Wells Fargo Bank. Another five were spent honing his global banking skills, when Richard was involved with International Trade Finance, Real Time Gross Settlement and Cross Border Banking. The past nine years have been in the private and high-tech sectors providing high-level consulting services, business analysis, project management and training to a wide range of banking clientele across the globe.   

He has spent extensive time servicing a diversity of “financial institutional” clients, in South Africa, Poland, Sweden, Ireland, Netherlands, Greece, Bermuda, Malawi, United Kingdom and across North America. Clients include AIB Bank, Eurobank, ABSA Bank, CitiBank, Swedbank, INDEbank, IBM, Montran and Fundtech, as well as many others. 

Richard has also filled the role of advisor to central banks on payment systems and technical payments issues. Furthermore, key staff from the Bank of England, South African Reserve Bank, Central Bank of Ireland and Bank of Portugal who have attended training sessions presented by Richard.

15 - 16 November 2010 London

Early Bird till 30 of September £1795 + VAT

Regular Price: £1950 + VAT

2 people - 5% discount, 3 people - 10% discount. Delegates have to be from the same company and book at the same time.

____________________________________________________

Dubai - Dates tba

Contact us to find out about the next edition of this course

Early Bird £1850 / Regular Price - £1950

______________________________________________________________ DISCOUNTS

• 2 people - 5% discount, 3 people - 10% discount. Delegates have to be from the same company and book at the same time.
• If you book for 2 courses at the same time you will receive 10% of the full value of the cheaper one.

IN-HOUSE TRAINING

If you have a team of 4 or more this course can be customised and organised in-house at your convenience. Contact one of our advisors to find out more.

            Call us now on +44 (0) 207 193 5035

or send an e-mail to enquiry@eurekafinancial.com