Clearing 101: Exchanges, Clearinghouses And CCPs
Course Summary:
Clearing improves transparency for regulatory compliance, reduces fragmented counterparty risk, facilitates multilateral netting, collateralization, portability, and loss mutualization in the event of a default. If you trade derivatives, it's imperative that you understand the clearing process.
Course Details:
Buyers and sellers of derivatives on exchanges rely on clearinghouses (CCPs) to intermediate transactions and to manage credit risks between trading parties. Because of the critical role the CCPs serve to the operations, capitalization and integrity of financial markets, Congress designated clearinghouses as "Systemically Important Financial Market Utilities" (SIFMUs) - and therefore, subject to heightened regulatory scrutiny.
Join us for a virtual, live workshop (90 minutes on 2 consecutive days) that explains the multilateral systems that provide the infrastructure for clearing such as market-based pricing; daily settlement and transfer: and other financial transactions among institutions and market participants, and what
IFM's short, multi-day sessions provides the flexibility to fit education into a busy workday. Sessions hours are convenient for most U.S. participants and many global attendees too.
Who should attend?
The workshop is suited for a broad range of participants including:
- Users of futures, options on futures and swaps markets such as institutional investors, money managers, producers/suppliers, as well as manufacturing and distribution companies
- Support, operations, sales, and marketing personnel at FCMs
- Public policymakers
- New traders
- Exchange and trade support staff
- Staff in risk management, financial and legal departments
What You'll Learn:After the workshop you will be able to:
- Understand financial market infrastructure with an emphasis on the critical function and benefits of clearinghouse operations
- Describe the key roles of clearing parties including CCPs, clearing members, customers, and the U.S. Commodity Futures Trading Commission (CFTC)
- Explain the principles of novation and how CCPs reduce processing costs, enable multilateral netting, prevent the accumulation of losses
- Describe the critical role that margin (both initial and variation) and the mandate of segregated funds play in ensure liquidity and market stability
- Know the basic portfolio margining methodologies at the CME, ICE and Options Clearing Corporation
- Understand the default management plans and resolution rules as required by CFTC
- Describe the CCP's assessment powers and default waterfall used to satisfy a defaulting clearing member
- Be familiar with the cleared swaps and OTC markets, similarities, and differences
- Understand past bankruptcies and bankruptcy considerations
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