Whoever has watched "The Wolf of Wall Street" has likely struggled to understand the jobs, products, jargon that surround financial markets. Some of us are still trying to get our way out of this financial jungle and clarify the associated strategies. Let's demystify these!
In close collaboration with PwC's subject matter experts, PwC's Academy has developed a comprehensive, multi-layered training curriculum for junior and more experienced financial industries’ employees and managers alike, who seek to gain a solid knowledge of derivative instruments.
With this second module, participants will further dive into the realm of collateral management by exploring the mechanism behind this activity such as type of collateral, margin call and other relevant features. In a second step, the focus will be on the operational lifecycle and the relevant key documentation.
To complement your learning journey, please check our Derivative instruments curriculum.
Duration: 2h30
Language: Available in English and French. The supporting material is only available in English.
Number of participants: up to 15
Available as intra-company course (i.e. dedicated session on demand)
Objectives
By the end of this training, participants will be able to:
- understand the fundamental characteristics of collaterals;
- determine the types of collateral required for various scenarios;
- gain a detailed understanding of collateral operations and their lifecycle;
- understand the associated risks and protection framework.
Content
- 1. Refresher on collateral management foundation module:
- Definition, purpose and key functions of collateral management
- Role of collateral in reducing counterparty risk and enhancing liquidity
- Types of collateral: cash vs non cash, acceptable vs un acceptable collateral, collateral acceptability and haircuts
- Comparison collateral and margin: margin in derivatives contract vs collateral in financing agreements
- Initial margin and variation margin
- 2. Collateral management lifecycle
- Process of posting collateral in response of margin calls or credit agreements
- Role of clearinghouses, CCPs and bilateral arrangements
- Monitoring collateral value to ensure adequacy and minimize risk
- Frequency and triggers for margin calls
- Substitution of collateral during a transaction's lifecycle
- 3. Collateral management documentation
- Key documentation: ISDA CSA, GMRA and GMRA annexes
- Enforceability, dispute resolution and triggers
Target audience
This course is intended for anyone wishing to continue their learning beyond the foundation module and explore in greater depth the collateral management techniques employed by investment managers and financial market participants.
Our lead experts
This training will be coordinated by Laurent Dubois, Director at PwC Luxembourg. The different modules will be presented by experts in derivatives.
Laurent is active in our Assurance practice in managing and delivering a diverse range of assurance engagements toward Alternative and Banking actors to local and international clients and PwC offices.
He has exposure to a wide range of valuation methodologies, a practical understanding of the effective strategies delpoyed by its clients in the context of financial reporting.
Laurent is Réviseur d’entreprises agréé (REA).
