Operational Risk of Financial Derivatives

November 14-15, 2017, New York City  Seminar Location

March 20-21, 2018, New York City  Seminar Location

Many classes sell-out; we suggest registering at least two weeks in advance to ensure your seat.

Hours9:00 am – 5:00 pm; Registration/Breakfast: 8:30 am; Dress Code: Business Casual

CPE Credits: 14
Level:
Intermediate/Advanced

Prerequisites: None
Method: Group Live

Operational risk remains the most poorly understood and neglected risk in managing derivatives portfolios. This two-day course is designed for risk managers, auditors, compliance officers, back office and IT professionals, and regulators who need to better identify, measure, control and monitor this important risk. The course will be augmented with case studies of recent examples of operational risk in global derivatives markets.

Course Objectives

At the end of this course, participants should be able to:                                               

  • Define operational risk
  • Identify how operational risk materializes in OTC and exchange- traded derivatives
  • Evaluate how operational risk can materialize in the front, middle, and back offices of a derivatives group
  • Discuss different measurement approaches to operational risk
  • Evaluate best practices to control and monitor operational risk

Module I – Defining and Identifying Operational Risk

  • Define operational risk
  • Identify examples of operational risk in the use of OTC derivatives
    • People
    • Processes
    • Technology
    • External Events
  • Discuss the regulatory influence on how operational risk is identified

 Case Study

 Module II – Life Cycle of a Financial Derivative

  • Define role of front, middle, and back office
  • Compare the order of pre-and post-trade activities
  • Identify confirmation and settlement process
  • Evaluate whether internal controls are sound
  • Establish standards for reliability and soundness of back office
  • Evaluate reconciliation procedures and resolution of disputed trades and discrepancies
  • Define fraudulent trades and their prevention

 Module III – Measuring Operational Risk

  • Compare and contrast operational risk measurement models used by market practitioners
  • Identify advantages and risks of operational risk measurement models

Module IV — Controlling and Monitoring Operational Risk in Derivatives Portfolios

  • Identify best practices to control operational risk
  • Compare and contrast advantages and disadvantages to how back offices are set up and run at financial institutions
  • Discuss how potential new financial regulations will impact the control of operational risk
  • Identify different financial institution personnel who needs to monitor operational risk
  • Evaluate best practices in monitoring operational risk

Summary Conclusion and Question and Answer Session

US $1695.00

Check out Group Discounts

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