Clearing, Settlement and Counterparty Risk

Course description

The Course Leader has been working in the derivatives industry for 30 years and regularly teaches on behalf of the world’s leading clearing houses and stock exchanges. These institutions are vital to managing counterparty risk.

In recent years a lot of attention has been focused on the subject of post trade environment – clearing and settlement.

This informative and easy to follow one day course, has been specially designed to explain how the clearing and settlement process works for derivatives and securities, demonstrating how banks and their clients manage their counterparty risk – which is particularly important in the post financial era. You will learn about the role of Central Counter Party (CCP) otherwise known as the Clearing House, and its role to mitigate counterparty risk, as well as relationships between end users, clearing members and the CCP. You will also learn how the risk is mitigated through the process of margining.

The course also shows in some detail, how the margining system allows for the netting of risk and the effective management of collateral.

What will you learn

By the end of this course you will be able to:

  • Understand the significance of counterparty risk, especially post financial crisis
  • Explain the role and function of the Central Clearing Counterparty (CCP)
  • Illustrate the relationship between clearing members and clients and show how different types of client accounts can be set up and managed
  • Demonstrate how CCPs and central security depositories (CSDs) interact
  • Show how CCPs are structured and explain their “lines of defence”
  • Describe how listed derivatives v OTC derivatives are collateralised and cleared
  • Show how the margining system works for futures and options and other derivatives like swaps compared with bonds and equities
  • Illustrate the benefit of portfolio based margining systems like SPAN and VaR margining methodology

Main topics covered during this training

  • Counterparty risk in the post financial crisis environment
  • Central clearing counterparties (CCPs) and clearing members
  • Margining for futures (linear products) and options (non-linear), other derivatives and securities
  • Central security depositories (CSD)

Who should attend

Professionals from or involved with:

  • Clearing houses
  • Prime Brokers and Derivative Clearing Brokers
  • Clearing and Settlement
  • Custodians
  • Counterparty Risk Management
  • Back and Middle Office Operations
  • Fund Administrators
  • Compliance and Risk Management
  • Audit
  • IT

Clearing and Settlement for Derivatives and Securities - A 1 Day Course

Understanding counterparty risk particularly in the post financial crisis environment

This section describes the aspects of counterparty risk in a bi-lateral trade and shows how in the OTC market, collateralising the deal can reduce this risk. This section also looks at the capital constraints on a bank post financial crisis and how netting and central clearing can be of benefit.
  • Bi-lateral trade with and without collateral agreements
  • Using the services of a third party to reduce risk
  • Standardising the contract and netting clauses
Central clearing counterparties (CCPs) and clearing members
In this section we describe how CCPs can remove credit risk in a trade through the process of “novation or open offer” and demonstrate the benefits of netting for clearing members and clients.
  • What is the role and function of the CCPs?  Who owns the CCP?
  • How does the clearing house ensure contract performance?
  • What is the difference between a trading participant and a clearing member?
  • Different types of client accounts and levels of protection and portability
  • Margining systems – SPAN v VaR margining methodology
  • Benefits of cross margining and netting
  • What are the CCPs’ “lines of defence” other than margining?
  • Risk management committee
Margining for futures (linear products) and options (non-linear), other derivatives and securities
This section offers numerical examples of how margining for futures and options (and other securities) works, using traditional methods like SPAN and the now popular VaR margining methodology.
  • Calculating initial margin and variation margin
  • What is spread margin and other types of margin?
  • How does VaR margining differ from traditional margining systems like SPAN?
  • How does margining work for securities like equities and bonds?
  • Illustration of cross margining benefits
  • Types of acceptable collateral
Central security depositories (CSD)
This section concludes with an explanation of how CSDs cooperate with clearing members, clients and the clearing house in order to safely settle contracts.
  • Types of settlement accounts
  • Gross settlement versus netting on settlement day for securities
  • Settlement of physically settled derivatives
  • Working out the invoice amount
  • Managing corporate actions
  • Transferring securities for cash and interaction with the CCP

Questions & Answers



Paul has over 30 years experience of working and teaching in the financial and derivatives industry.  Paul joined the London International Financial Futures and Options Exchange (LIFFE) in 1988, spending several years on the exchange trading floor before transferring to LIFFE’s Business Development Department.

During his time at LIFFE, Paul worked in the fields of broker relations, product research and development, marketing, market automation and education. Paul was Head of Education at LIFFE, before leaving in Dec 1998 to pursue a freelance career in financial education and consultancy.

Paul is also a qualified teacher and has extensive speaking experience both in the UK and abroad, covering all the major aspects of financial markets.  Paul has taught delegates from virtually all of the worlds leading investment banks, funds and trading houses. The list of clients includes JP Morgan, Goldman Sachs, Deutsche Bank, Barclays Capital, Morgan Stanley and Merrill Lynch among others.



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

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.


You can cancel your participation up to a month before the course and receive a refund minus 10% of the full course value. Between 2-4 weeks before the course you will be charged 50% cancellation fee and if you cancel less than 2 weeks before the course you can only offer your place to a colleague. Up to 2 weeks before the course you can reregister for another edition for 10% reregistration fee if there is another webinar offered or you can rebook for a course in London by paying the difference in price plus 10% reregistration fee.

Classroom Courses

If there is any official travel restriction or difficulty related to the COVID pandemic around the time of the course we will convert the training into a webinar or offer to attend the next classroom edition at no extra cost.

If you are unable to attend the course, you can either send a replacement at no extra charge or, up to 10 days before the training, you can transfer your booking to another edition within the next 6 months paying administrative fee of 20% of the full course price. For any cancellation requests received between 11 days and 4 weeks from the course we offer 50% refund or reregistration to another edition for 25% of the value of the booking. For any cancellation requests received more than 4 weeks before the course date we will offer a refund less an administration fee of 10% of the full course price.

Cancellations must be made in writing (letter or email) and reach our office four weeks prior to the course date. We regret that only limited refunds can be given after this period as per points above. Non-attendance without any notification will be charged at full rate. 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

This topic can be arranged on in-company 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



We are using cookies on our website

Please confirm, if you accept our tracking cookies. You can also decline the tracking, so you can continue to visit our website without any data sent to third party services.