Fundamentals of Collateral Management (APAC)
Wednesday, February 26 to Thursday, February 27, 2025Online
Member US$595.00
Non-Member US$695.00
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Collateral risk mitigation regulation has evolved around the world, and the field of collateral operations is becoming more complex with day-to-day operations.
This comprehensive 2-Day virtual ISDA training in Collateral Management was developed to help participants learn (i) the terminology of collateral, securities, and related documentation, (ii) relevant regulatory history and current market practice, especially with regard to the post-Uncleared Margin Requirements landscape, and (iii) a practical explanation of tasks and responsibilities for OTC margin managers.
Registration for this event will close 2 hours before the live broadcast
This is an ISDA Virtual Conference:
- Event will be live on February 26, 2025 from 9:00 AM - 12:00 PM HKT/SGT and February 27, 2025 from 9:00 AM - 12:15 PM HKT/SGT | Timezone Converter
- Miss part of the event or aren't able to watch live? The recording will be available to registrants until March 27, 2025
Educational Credits
ISDA is recognized by the Securities and Futures Commission (“SFC”) as an approved Continuous Professional Training (“CPT”) course provider. Please click here for more information on SFC’s Guidelines on CPT.
9:05 AM Introduction, Welcoming Remarks and Course Overview
- Licensing requirements for derivatives
- Definition of “derivatives contracts”
- Distinguishing between derivatives and other regulated products, such as securities and deposits/structured deposits/dual currency investments
- Licensing exemptions for dealing in derivatives contracts, including the exemption framework for foreign offices/related corporations
- Licensing of commodity trading under the Commodity Trading Act
- Licensing of exchanges/markets; distinguishing between dealing in derivatives and operating a market for derivatives
- Key conduct of business requirements for derivatives
- Client money/asset requirements
- Confirmations/statements of account
- Risk disclosure requirements
- Risk mitigation requirements
9:10 AM Module 1: Collateral, Margin and Master Agreements
- The function(s) of collateral
- What types of financial instruments use collateral and why?
- The difference between “margin” and “collateral”
- Understanding the usage of “exposure” instead of “balance due” on master trading agreements margin calculations
- Why we need collateral even with trading limits
- How are documents negotiated and who are the parties involved?
- Different types of collateralized products and contracts
- Explore how collateral management works with other areas within your organization
- Posting or receiving collateral on different contract types
9:45 AM Module 2: Vocabulary of Margin Calls and Introduction to Credit Support Annexes (CSAs)
- What is a Margin call?
- What does mark-to-market, notional and tenor/maturity mean for trades and what is the impact of each of these on the daily margin call?
- “In the Money” and “Out of the Money” and calculating exposure and VM
- VM, IM, and IA – the differences and the intersections of each
- Frequency of margin calculations and collateral being posted and/or received
- What is a Credit Support Annex and how many kinds are there? Part 1
- Choice of law
- When can rehypothecation be used and can it not be used?
10:15 AM Break
10:25 AM Module 3: The Credit Support Annex Vocabulary
- Valuation Agent and Date
- Regimes
- Base Currency and Termination Currency
- Eligible Collateral
- Delivery Amount and Return Amount
- Threshold
- Minimum Transfer Amount (MTA)
- Rounding
- Notification and Resolution Times
- Local Business Day
- Transfer Timing
- Notices
- Disputes/Differences
- Portfolio Reconciliation (“Port Rec”) and Resolution Time
- Condition Precedent: Defaults, Termination Events and Additional Termination Events; Fish or Cut Bait Clause
- Fails, defaults, and cure periods
10:55 AM Module 4: Eligible Collateral
- Overview and associated risks of Cash, Equities and Fixed Income
- Ratings
- Haircuts, notional/face value, price, maturity, and haircut algebra
- Standardization of terms and eligible collateral under Uncleared Margin Requirements (UMR)
- Substitutions
- Interest and Negative Interest
- Proceeds, coupons, and corporate actions
- Liquidity and Optimization
- Eligible collateral considerations: documentation, automation and data standards
11:50 AM Recap and Questions
12:00 PM Day 1 Concludes
Thursday, February 27, 2025
9:00 AM Welcome Back and Recap of Day 1
9:05 AM Module 5: Post-2008 Regulations and Risk Management
- Average Aggregate Notional Amount (“AANA”) and being “in scope” for UMR regulation
- How does FX risk come into play with collateral? How does an FX haircut mitigate that?
- "Wrong-Way” risk: how to make sure you are not increasing counterparty risk
- European Market Infrastructure Regulation (“EMIR”) vs. Dodd-Frank Act (“DFA”): Differing regimes have different rules and operational practices
- What happens when regulations fight? “Strictest of” process
- How many kinds of Credit Support Annexes are there? Part 2
- "Legacy" 1994/1995 CSA/CSD (and BSA)
- VM CSA/CSD: 2016- Phase 1, 2017 “VM Big Bang” regulatory compliant Exposure CSAs
- IM CSA/CSD/CTA: 2016-forwards; IM phase-in based on AANA and regime deadlines; custodians required
- Umbrella documents for asset managers
- IM Monitoring
9:35 AM Module 6: Custodians, Initial Margin and Multiple CSA Management
- IM CSA/CSD and IM CTA + Security Agreement: Designed to govern IM and the custodians used by each party
- IM Thresholds: 50mm uniform Threshold per entity/corporate group, based on original master agreement pairings
- IM Eligible Collateral Schedule
- ISDA SIMM, and when GRID is used
- Independent Amount vs. Initial Margin
- IA and IM: Distinct, Allocated vs. Greater Of and managing VM and IM CSA
- Custodial Agents: Account control agreement, security agreement, KYC requirements
- Triparty vs. third party collateral posting
- What happens when you are not using the same custodians?
- Operational efficiency across CSAs and monitoring
- How can automation and Straight Through Processing (“STP”) help with daily tasks?
- Reviewing and upgrading review your legacy systems for regulatory compliance, efficiency, data, risk
10:20 AM Break
10:30 AM Module 7: Daily Operations Part 1
- Onboarding new and amending existing contracts
- Margin Calculations
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- Legacy CSA exposure calculation
- VM CSA Exposure margin calculation
- IM CSA SIMM Calculation for post and collection
- IA/IM review for Greater Of/Allocated
- IM Monitoring for clients who chose BCBS/IOSCO relief
- Collateral Posting for Legacy, VM/IA, IM/IA, bilaterally or to custodians/segregated accounts
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- Delivery Amount in or out
- Return Amount in or out
- Substituting collateral: maturing items, optimization, amendments to schedules
- Data inputs/outputs
11:30 AM Module 8: Daily Operations Part 2
- Problem management
- Chasing fails for deliveries or returns
- Dispute resolution and investigation (trades, securities valuation, or contract data conflicts)
- Portfolio reconciliation (“Port Rec”)
- Operational controls (Was the cash sent? Were the securities received? Are there any unexplained mark-to-market jumps?)
- Systems controls (feeds for trades, pricing, ratings, margin calls)
- Eligibility controls for posted collateral
- Risk reporting and alerts
- Regulatory reporting
- Defaults and Notice of Exclusive Control: Alerting internal teams and custodians, or providing information to teams and regulators
- Qualified Financial Stay rules and impact on Close-Out and Setoff
12:00 PM Course Recap
12:15 PM Course Concludes
Agenda is subject to change.