The financial crisis of 2008-2009 has brought Collateral Management to the forefront of discussion within the financial industry. New regulations have been introduced requiring financial institutions to have higher minimum levels of capital and ostensibly safer forms of collateral. As a result there is a narrowing of what is considered to be an acceptable form of collateral. The ultimate costs of these reforms are not yet clear but it could result in increased difficulties in hedging bespoken risks or operating in a cost effective matter.   A failure to effectively implement standards to meet these new regulations in a cost effective manner could result in more and more entities finding difficulty in access to the market.

Analyse the Repercussions of Newly Implemented and Proposed Regulations on Collateralization

o    Learn how the operation of Collateral Management has changed significantly in the wake of the 2008 Financial Crisis

o    Understand the impact of potential disparate margin treatment required by regulators in the United States and European Union

Identify the Emergence of new services derivative users  as required under Dodd-Frank

o    Establish the impacts of Dodd-Frank to Collateralization in  tangible terms

o    Review how Dodd-Frank is impacting those involved with collateral ranging from the regulators to, FCMs to  Custodians

o    Analyze the impact that the unbundling of services previously provided by banks and dealers

o    Identify the degree of choices players have in terms new regulations

o    Determine how Dodd-Frank presents potential new opportunities to new market participants

Determine Forms of Acceptable Collateral to counterparties  and CCPs in a Market requiring increased access for new forms of Liquidity

o    Understand the need to survey and understand what collateral is acceptable to CCPs and Clearing Houses

o    Use and implications of collateral upgrade, “Collateral transformation”

o    Discuss the impact of expanded requirements for  collateral will have on the market in terms of cost to participants and consumers

o    Identify the potential benefits and pitfalls of using  cash as collateral

o    Understand the growing integration of the collateral management function with liquidity and  treasury management  functions

o    Understand the relationship of  collateral  to Credit Value Adjustments and   

o    Determine how new regulations will impact the velocity of collateral

Establish What is Driving the Need for Additional Collateral

o    Recognize the factors  driving the increase in the amount of collateral  required to support both OTC and Cleared derivative trading

o    How will multiple CCPs Impact collateralization ?

o    Identify the driving forces behind requirements for additional margin required by CCPs

o    Determine how rule making under  Dodd-Frank has impacted the Operational  mechanics of CCPs and those who interact with CCPs

Distinguish the Differences in the Model For Centrally Cleared Swaps Compared to the Traditional Model

o    Determine the impact that new model for centrally cleared swaps will have on collateral

o    Understand the purpose and function of the proposed Standard Credit Support Annex

o    Distinguish how the standard Credit Support Annex addresses the number of variables within  OTC credit support documents

o    Understand the optional elements within the CSA for pledging collateral and the benefits/costs to removing variables from the  CSA

o    Effectively manage record and reporting requirements to be in compliance with regulations

Understand the CCP Model

o    Understand the characteristics of a CCP under  Dodd-Frank vs the traditional clearing model

o    Determine how the new CCP Model impacts the OTC market

o    Realize the potential impact that central clearing will have to management of exposure to the OTC market

o    Establish what happens to bespoke transactions that can’t be cleared by a CCP

o    Recognize what additional services that will be required to  manage  transactions that do not fit into the CCP transaction model

o    Determine the areas producing increased costs for uncleared transactions

o    Identify the areas producing additional costs to cleared swaps

Apply Effective Segregation Standards Comply with the CFTC’s LSOC Regulations

o    Understand the differences between segregation models proposed by Congress for swaps, the Futures segregation model, and the SEC model

o    Recognize the need for harmonization among the segregation requirements

o    Effectively utilize existing collateral frameworks established within the industry to comply with LSOC Regulations

o    Apply required customer protection requirements designed for a retail market within a non-retail market

o    Appreciate the drivers for new technology to meet regulatory requirements

·         Identify how regulatory measures such as the Dodd-Frank Act and new rules by the Commodity Futures Trading Commission will impact the day-to-day and long term operation of a collateral management function

·         Recognize how Dodd Frank has impacted  roles of some market players while supporting the emergence of  new services from existing players

·         Understand  some of the drivers to broadening the assets considered to be acceptable forms collateral for OTC counterparts and clearing houses 

·         Analyze what the future holds for assets that were previously considered acceptable forms of collateral

·         Distinguish the driving factors in the need for additional collateral across the OTC and Centrally Cleared Market

·         Appreciate the new role of CCPs in the new Dodd-Frank driven  market

·         Understand what is required for institutions to be compliant with new transparency measures as required under  Dodd-Frank

·         Examine some of the differences in the model for Centrally Cleared Swaps vs OTC  

·         Understand  the impact of the mandate for central clearance and the knock on cost to  uncleared swaps

·         Explore some of the developments around the industry to develop standardized reporting in compliance with the requirements of Dodd-Frank

·         Understand existing industry frameworks to comply with the segregation standards required in Part 22 the Commodity Futures Trading Commission’s regulations

·         Gain insight to  proposed regulations that have yet to become final