Clearing 101: Exchanges, Clearinghouses and CCPs

Course Summary:

Clearing improves transparency for regulatory compliance and reduces fragmented counterparty risk and facilitates multilateral netting, collateralization, portability and loss mutualization in the event of a default. As such, if you trade derivatives, it's imperative that you understand the fundamental role clearing and CCPs play in centralized risk management.

Course Details:

Buyers and sellers in exchange transactions rely on clearinghouses to intermediate transactions and to manage credit Image: Clearing 101 risks between trading parties. As such, clearinghouses promote transparency, efficiency, and stability by providing market-based pricing, daily settlement, and ensuring adequate capitalization for markets to function.

Join us for a virtual instructor-led workshop that explains the multilateral systems that provide the infrastructure for transferring, clearing and settling payments for derivatives and other financial transactions among financial institutions and end users. Additionally, the program will include relevant case studies to demonstrate clearinghouse functions and the impact and outcome of actual clearing events.

Duration and Format: Virtual instructor-led workshop is delivered in 90-minute sessions on two (2) consecutive days. Course hours are convenient for most U.S. participants and many global attendees.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