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CCP CLEARING, RISK MANAGEMENT,

RECOVERY AND RESOLUTION (US)

4TH-5TH FEBRUARY 2019, MIAMI, USA

Comprehensively understanding the complexity of the dual-regulated CCP clearing model in the US should be a priority for firms seeking to enhance their risk management frameworks and multilateral margining practices.
 

THE TRAINING PROGRAMME

This new and unique two day conference will provide delegates with a comprehensive understanding of central counterparty (CCP) clearing models and operational frameworks in the United States (U.S.). Delegates will receive in depth instruction on the U.S. CCP regulatory framework governed by the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity and Futures Trading Commission (CFTC) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Delegates will be able to practically compare a range of key issues affecting CCP offerings in the U.S. The conference will also provide deep coverage of margining practices, clearing models and agreements, operational risks, and risk management frameworks affecting CCPs. Delegates will also be guided through the intricacies of effective CCP Recovery and Resolution Plans, and CCP Default Management, Recovery and Continuity Frameworks.

 

Day 1

 

SESSION 1: The Central Counterparty (CCP) Clearing Model

  • An Overview of the CCP Clearing Model (Functional Definition; CCP Ownership; CCP Advantages and Disadvantages; Novation; Cleared Products; Margining; Multilateral Netting; Risk and Default; Loss Mutualisation; Auctions; Portability).

  • CCP Regulation v. 'Too Big To Fail'.

  • Case Study: Options Clearing Corporation.

SESSION 2: The U.S. CCP Regulatory Framework

  • Differentiating CCPs in the U.S. (Derivatives Clearing Organization (DCO) and (Securities Clearing Agency (SCA)).

  • The SEC, the CFTC and CCP authorisation, recognition and supervision.

  • CCP operating, clearing and reporting obligations under the Dodd-Frank framework.

  • CCPs and cleared products (swaps, securities-based swaps, mixed swaps).

SESSION 3: CCP Clearing Models and Agreements (Direct and Indirect)

  • CCP and Client Clearing Documentation and common negotiated provisions (Margin, Termination Events,

  • Pre-Default Porting).

  • Customer clearing under modified Master Agreements.

  • An Overview of ISDA® Clearing Agreements and Addendums (US FIA-ISDA Cleared Derivatives Execution Agreement + Addendum).

SESSION 4: Designing Effective CCP Default Management, Recovery and Continuity Frameworks

  • The 2012 CPMI-IOSCO Principles for Financial Market Infrastructure.

  • The ISDA® Principles for CCP Recovery and CCP Default Management, Recovery and Continuity.

  • Developing new Total Loss Absorbing Capacity (TLAC) or bail-inable debt standards for CCPs.

  • Developing Standardised Regulatory Stress Testing and Disclosure.

 

Day 2

 

WORKSHOP 1: CCP Operational Risks

  • Default risks

    • CCP Member default.

    • Distress, or Resignations.

    • Failed Auctions.

    • Reputational.

  • Non-default loss events

    • Fraud.

    • Operational risk.

    • Investment Risk.

    • Legal risk.

    • Model risk.

    • Liquidity risk.

WORKSHOP 2: CCP Risk Management Frameworks

  • Membership Requirements, Transparency, Margin Methodology, Stress Testing, CCP Risk Policy Issues, MiFID II Open Access Obligations.

  • Mutualised Default Funds, Default Waterfall, Default Fund Margin, Skin in the Game, and Rights of Assessment.

  • Recovery Tools (Default and Non-Default Losses).

WORKSHOP 3: CCP Margining Practices

  • CCP Margining Risks, Initial and Variation Margin, Interest Rates, Haircuts and Cross-Margining.

  • CCP Margin Methodologies.

  • Margin Segregation (omnibus, individual, legal segregation with operational commingling (LSOC)) and Re-hypothecation.

  • EU two-day net margin v. U.S. one-day gross margin.

WORKSHOP 4: CCP Recovery and Resolutions Plans

  • Resilience Incentives, Initial and Variation Margin Haircuts.

  • CCP Points of Non-Viability, Emergency Liquidity Arrangements, Auction Participation, Continuity of Service.

  • CCP Resolution Powers, Loss Allocation Arrangements, and CCP Default Management Process.

  • Cross-Border Cooperation and Coordination with Regulatory Authorities.

 

 
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Key Benefits

Advanced knowledge and understanding of key CCP operational areas (US regulatory framework, clearing models, agreements, margining practices, operational risks, recovery and resolution plans).

Extensive pre-conference questionnaire to identify delegate's key course objectives.

Comprehensive conference documentation.

Post-conference expert trainer follow-up to guarantee all key course objectives have been met.

Presented by Rodrigo Zepeda the Co-Founder of Storm-7 Consulting and the author of “The ISDA Master Agreement 2012: A Missed Opportunity?” and “Optimizing Risk Allocation for CCPs under the European Market Infrastructure Regulation”
 

EXPERT TRAINER

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 Masters 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), and 'Market Abuse: Operational Compliance' (London), 'AEOI (FATCA & CRS)' (Manama, Bahrain). 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), CAF, the Development Bank of Latin America (Swaps and Over-the-counter Derivatives, Lima, Peru), Rothschild Investment Management (UK) Limited (AEOI (FATCA & CRS), London) and Bethmann Bank AG (MAD 2 MAR, Frankfurt). 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?".

 

COURSE SUITABLE FOR

  • Analysts

  • Central Bank Personnel

  • Collateral Management Function

  • Compliance Officers and Managers

  • Credit and Legal Professionals

  • Dealers

  • Fund Managers

  • Heads of Compliance

  • Heads of Operations

  • Heads of Risk

  • In-House Legal Counsel

  • ISDA Negotiators

  • OTC Derivatives Documentation Managers

  • OTC Derivatives End-Users

  • Risk Officers and Managers

  • Treasury Function

 
 

Disclaimer

ISDA® is a registered trademark of the International Swaps and Derivatives Association, Inc., and Storm-7 Consulting Limited is neither sponsored by nor affiliated with the International Swaps and Derivatives Association, Inc. (ISDA), and the public is hereby informed that Storm-7 Consulting Limited holds no commercial, private, or other relationship with ISDA.