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The specialist in highly technical, market-driven banking training

Banking Courses All courses can be presented In-House or via Live Webinar


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Advanced Negotiation Issues in M&ADate:

Location: London Price: .....+VAT

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PUBLIC COURSES• Advanced Blockchain and Digital Currency Technology• Advanced Debt Restructuring• Anti Money Laundering - Financial Crime Compliance• Asset Based Lending • Bond Documentation• Commercial Real Estate Debt Finance• Cybercrime: An Overview for Non-FinTech Managers• ISDA DOCUMENTATION • Drafting & Negotiating Issues in Real Estate Finance

Documentation• IFRS 9 - The Latest Updates • NEGOTIATING ISDA MASTER AGREEMENTS• Negotiating & Issuing High Yield Bonds• Advanced Negotiation & Structuring Issues in Real Estate

Finance Term Sheets • Real Estate Modelling• Risk & Capital Management Under Basel III and IFRS 9• Securitisation & Structured Products: Upcoming

Regulatory Changes• Securitisation - The Structures, Legal Analysis and

Documentation• Structured Trade and Commodity Finance• Advanced Trade Finance Training• Fundamentals of International Trade Finance• Structuring & Negotiating Mezzanine, PIK, Second Lien

and Unitranche • The Regulation & Compliance Course for UK Financial

Services• Unitranche & Alternative/Direct Lending• Latest Basel IV Regulatory Requirements• Cryptocurrencies• Letters of Credit• Trade Based Money Laundering (TBML) & Sanctions

Compliance

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PUBLIC COURSES• International Trade Finance Masterclass• Initial Coin Offerings - An Introduction



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IN-HOUSE COURSES

• The Roles and Responsibilities of the Money Laundering Reporting Officer

• AML Investigations• AML & KYC: The Crime Prevention Compliance Course• Advanced Credit Derivatives• Advanced Credit Risk Training• Advanced Equity Derivatives• Advanced Financial Analysis Training• Advanced Foreign Exchange Derivatives Training• Advanced Interest Rate Derivatives• Advanced Risk Management Training for Private Bankers• Advanced SWAPS Course• Aircraft Financing: Leasing & Financial Evaluation• Bank Card Business• Bankers’ Challenges in Electronic Banking, Management

Perspectives• Banks Financial Statements Analysis - Basic• Banks Financial Statements Analysis - Advanced• Bond Derivatives Course• Cashflow Forecasting: A 2 Day Course• Credit Derivatives • Credit Risk Training - Introduction• Cybercrime and Financial Services• Derivatives Pricing Training• Emerging Market Bank Modelling & Valuation• Emerging Market Debt Analysis• Enterprise Risk Management (ERM)• Examination of Documents Under Documentary Credits• Financial Statement and Analysis: A 3 Day Course• Financial Crime Prevention Compliance• Fixed Income Portfolio Asset Allocation• Forbearance



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IN-HOUSE COURSES

• Fund and Portfolio Management• Fundamentals of Loan & Transaction Structuring• Futures, Options and Structures Products Training• Housing Finance - Risk and Opportunities• IFRS Accounting for Real Estate• Infrastructure Project Finance Course• Invoice Discounting (Domestic & International) - A Two

Day Workshop Style Course• Islamic Finance• Islamic Finance - Introduction• Islamic Retail Banking Course• Know Your Customer• Management Information Systems (MIS) for Banking• Modelling for Credit Risk Training• Operational Risk• Practical Understanding of Current Debt Markets• Preparing and Reviewing the ICAAP• Private Banking & Wealth Management• Real Estate Finance for Commercial Lenders - Investment

Lending• Real Estate Finance for Commercial Lenders - Residential

Development• Repo and Securities Lending• Retail Banking - Introduction• Retail Credit Risk Management• Retail and Commercial Banking Delivery Channel

Masterclass• Risk Management• Treasury Products• Client Relationship Management• Fraud & Financial Services



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IN-HOUSE COURSES

• Risk and Products of the Treasury Function• Risk in Trade Finance and Trade Finance Products• Senior Managers & Certification Regime and Its Impact on

Training & Competence Obligations• The Debt Finance Training Course• The Distressed Disposals Training Course - Key Negotiating

Aspects• The Latest Basel III Regulatory Requirements• The Project Finance Course• The Shariah Compliant Investments Course• Trade Finance Sales• Training & Competence Obligations• Project Finance Modelling - A 3 Day Programme• Funds Transfer Pricing• Contemporary Challenges in the Asset Liability

Management in Banks• Commodities Markets• Life Cycle of a Security• Securities Settlement and Global Custody• OTC Derivative Products, and their Life Cycle Beyond the

Trade• Selling Derivative Solutions• Hedge Funds and Alternative Investments• Real Estate Investement & Mangement - South Africa• Real Estate Investement & Mangement - Hong Kong• Real Estate Investement & Mangement - UAE• Real Estate Valuation - South Africa• Real Estate Valuation - Hong Kong• Real Estate Valuation - UAE


Corporate Membership Scheme

Our Corporate Membership Schemes are not valid on any courses held on an in-house basis and are in line with our standard Terms & Conditions

If you would like to enquire about one of our Corporate Membership Schemes then please call or email us for more information.

Email: [email protected] Tel: +44 (0) 20 7387 4484

Our Corporate Membership Scheme gives clients the benefit of discounted course places with absolutely no

restrictions.

Clients pay an annual subscription fee of £595 + VAT to receive 20% discount on all public course and conference

bookings irrespective of the numbers booked.

You Corporate Membership Scheme can be used once payment is received and will be valid for one year.

web: redliffetraining.com email: [email protected] phone: +44 (0)20 7387 4484


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Advanced Blockchain and Digital Currency TechnologyDate: 11 June 2018

Location: London Standard Price: £795 +VATMembership Price: £636 + VAT

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Developments in FinTech are transforming financial services with blockchain and distributed ledger technology at the forefront. Both The Wall Street Journal and The Economist have described it as technology that could change the world. However, the application of the underlying technology goes well beyond financial services. Blockchain allows the creation of bespoke digital currencies to support commercial transactions which can be linked to smart contracts. The immutable nature of blockchain allows the provenance of transactions, goods and services to be recorded indefinitely. The cryptographic ecosystem supporting blockchain is perfect for managing the protection, distribution and monetisation of content for Media and Entertainment businesses. Digital currencies allow the tokenisation of service delivery and from Manufacturing, through to Healthcare, use cases for this nascent technology abound.

The underlying blockchains and cryptography provide technical solutions that are novel and clever, which are very different to the way current technology operates. Importantly, because they remove the need for trusted supplier intermediaries, they offer solutions which are potentially more competitive than traditional IT solutions.

This course provides a grounded and sector relevant introduction to blockchain and related digital currency technology. Starting from first principles, the course approaches the technology from a number of different perspectives providing foundational knowledge that will enable delegates to return to their own organisations with a clear understanding of how this important technology impacts the bottom line.

This course is a comprehensive guide to understanding and using blockchain technology, assisted through practical demonstrations and examples. It also includes an introduction to digital currency trading. It will leave people with real sense of its full potential.

Participants will:

■ Be introduced to why is blockchain so important and how is blockchain used ■ Get an overview of how organisations work and operations and technology ■ Have explained to them what is money and how does it acquire value ■ Gain an understanding of the banking and payments infrastructure including the advent of the

internet and the case for digital money ■ Be introduced to the history of blockchain and digital currencies ■ Get an overview of how blockchains and digital currencies work including the cryptographic primi-

tives and the transactions and Consensus protocols ■ Have explained to them cryptocurrency trading including and digital currency companies ■ Master the regulatory, tax and compliance

Background and Introductions

Overview

■ Why is blockchain so important? ■ How is blockchain used? Sector examples ■ Market dynamics

Context

■ How organisations work• Front-to-back office business processing

| Goods and services

• Operations and technology• Technology architecture | Centralised vs.

distributed• Supply and purchase

■ How money works• What is money and how does it acquire val-

ue?• Banking and payments infrastructure• Central banking and regulation• The advent of the internet and the case for

digital money

THE EMERGENCE OF DIGITAL CURRENCIES AND BLOCKCHAIN

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History of Blockchain and Digital Currencies

■ The first digital currency • The world pre-bitcoin• The challenge of digital money | Sending

and receiving money online• Bitcoin and why study it?• The emergence of blockchain from Bitcoin• Digital currencies - Bitcoin, Ether, Ripple,

Dash, Litecoin, Zcash, Monero etc• Hard forks and soft forks

How Blockchains and Digital Currencies work?

■ Cryptographic primitives• The hash function | SHA 256 and exam-

ples• Digital signing • Public / private key infrastructure • The concept of identity and wallets

■ Transactions and Consensus Protocols• Blockchain, transactions and consensus;

proof of work, proof of stake• Sibil Attacks and Byzantine Fault Tolerance

The Blockchain Game - Teams Compete to Mine their Own Digital Currency ■ Decentralized applications, open software

and smart contracts• Ethereum, and EOS• Examples and their application

Market Overview

■ Currency Segmentation• An overview of digital currencies• Market trends• Initial Coin Offerings and capital raising

Digital Currency Trading Exercise

■ Cryptocurrency Trading • Introduction to digital currency trading• Digital currency exchanges• Example trading indicators - MACD, Mov-

ing Averages, Relative Strength• APIs• Cyber security

■ Corporate Structures• Digital currency companies• Governance • The DAO and Ethereum

Regulatory, Tax and Compliance

■ Regulatory framework ■ Tax treatment ■ Money laundering - KYC and AML

Use Cases

■ Corporate Structures• Functional transformation and sector review• Business model disruption• Commercials and buying digital currencies• Tokenised utility - SIA, REP, GNO, GNT, BAT

Workshop Session: How could your organisation employ this technology?

■ Application• Opportunity Assessments • Proof of Concept• Strategies

The Future: Where next for blockchain and digital currency technology?

■ Vision and Opportunities ■ Barriers

Recap and Close


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Advanced Debt RestructuringDate: 19-20 Mar 2018, 20-21 Nov 2018

Location: London Standard Price: £1,300 +VATMembership Price: £1,040 +VAT

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Course Overview

In a low interest rate environment, bankers and financiers are under increased pressure to undertake more corporate business at higher returns, but at the same time ensuring a low risk weighting. Given that the business climate remains uncertain and volatile, the risk for bankers of developing problem loans through their lending activities, is therefore increasing.

This course has been designed for bankers and financiers to develop a holistic, applied approach to early problem loan workout through a range of different techniques currently applied in UK and international finance. It aims to provide the attendee with a comprehensive overview of the challenges of problem loan workout and with an insight into some of the key methods than can be implemented to assist in the recovery of their financial exposure.

By offering a range of different case studies, financing scenarios and potential solutions to workshop case studies, the attendees will be able to develop a broad applied overview of debt restructuring techniques. This is particularly important in an area of finance where ‘one size fits all’ solutions are not possible and where the financier needs to be open minded, flexible and quick to react to changing circumstances.

The programme draws from the experience of a range of different high profile debt restructuring case studies as well as the experience and project work of the trainer’s 23 year experience in debt structuring, restructuring and problem loan workout. A number of the case studies used during the course are those that have been undertaken directly by the trainer.

The course is highly interactive, with the course attendees working in project teams. They will be required to work in their project teams in devising solutions and providing recommendations to the rest of the delegates who will cross examine their proposals in a credit committee environment.

During the second day of the programme, the attendees will use forecast cash flow analysis as part of the strategic business review for the restructuring candidate. A knowledge of the working of Microsoft excel with therefore be an advantage for the attendees.

Participants will: ■ Fundamental concepts in early problem loan workout ■ Early Warning Signals in spotting potential problem loans ■ International classifications of problem loans ■ The fundamental methods and application of successful restructuring and rescheduling ■ The key methods that can be applied to successfully restructuring debt facilities ■ The aims of the problem client ■ Application of international frameworks to management the restructuring process ■ The importance of believing the restructuring strategy and the need for the independent busi-

ness review ■ The use of forecast cash flows in identifying the key risks of the recovery strategy and in as-

sessing the client’s ability to honour its debt service going forward. ■ The use of the ‘Standstill’ process in controlling the credit recovery process ■ The application of the Standstill Agreement and the cooperation of the other creditors ■ Key security and guarantees required in securing the lender’s position

Course Objectives


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Advanced Debt RestructuringContinued

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Day 1

Session 1

Introduction to Debt Restructuring – Key drivers

■ Non-performing loans and the challenges faced by bankers

■ When to recognise the non-performing loan ■ How to deal with problem clients that have

not defaulted ■ Introduction to a framework to deal with

covenant breaches ■ Review of common reasons for company

default and the creation of non-performing loans

■ Understanding the attitude of problem cli-ents and the difference between ability to pay and willingness to pay

■ When to restructure / reschedule and when to accelerate.

Workshop – Advanced discussion of different alternative scenarios in dealing with loans in default and covenant breaches from case study examples.

Session 2

Early Warning Signals of potential distress ■ Review of key financial EWS ■ Danger levels of different financial cove-

nants in different industries ■ EWS derived from the financial statements ■ Identification of the manipulation of the

financial statements ■ Using univariate and multivariate frame-

works to identify financial distress ■ Application of the Z Score to distressed sce-

narios to identify potential failure ■ Review of the IFC’s classification and check

list of Early Warning Signals ■ The importance of identifying key external

factors affecting corporates ■ The application of GNPESTEL model to ex-

ternal risk analysis ■ Systemic risk and its impact on problem

loans ■ Identifying defects and mistakes committed

by the company ahead of time ■ Management risk and its impact on corpo-

rate recovery ■ Interrogating problem management and

understanding gaps and areas for improve-ment

■ The role, power and limitations of the lender in restoring management effectiveness

■ Strategic risk and its impact on the problem client

Workshop – Delegates in their project teams will analysis the EWS and external and qualitative risks facing a case study

problem loan, providing recommendations for how a lender could seek to improve those risks and protect itself from potential risk crystallisation.

Session 3

Identifying work out solutions versus insolvency solutions

■ The importance of understanding whether the problem loan can be ‘worked out’ as a going concern

■ The importance of and belief in the recovery strategy

■ Using cash flow forecasts to believer the busi-ness plan and recovery strategy

■ Expectations of financial performance and fi-nancial covenants under the recovery strategy

■ Deciding whether to leave the borrower in col-lateral possession or not

■ Application of the Butler Matrix ■ The IFC framework for problem loan resolu-

tion ■ The use and application of sensitivity analysis

in understanding the strength of the compa-ny’s recovery plan.

Case Study Workshop – During this session, the delegates will be given a case study project complete with forecast financial projections designed by management. Having applied the Butler and IFC frameworks to the case study, the delegates will use the excel financial model provided by the trainer, to undertake a sensitivity analysis of the forecasts financials. The aim will be for the attendees to assess whether they believe the company’s recovery strategy and its ability to honour the restructured loan’s debt service going forward.

Session 4

Different restructuring and recovery methodology

■ The concept of automatic stay and protection of the going concern from other creditors

■ Administration ■ Receivership ■ Liquidation ■ Automatic stay in administration ■ Different rescue procedures ■ Cram down of creditors ■ Position and rights of management ■ Personal liability of directors ■ Ranking and claims of creditors ■ Time limits of filing claims ■ Introduction to Standstill Agreements and

controlling the banking syndicate

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Advanced Debt RestructuringContinued....

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Case Study Workshop – During this session the attendees will review a new case study and review the potential application of the different recovery methodology discussed during the session. The delegates in their project groups will also assess how they need to engage with other creditors and assess the drafting of a standstill agreement for the problem loan restructuring.

Day 2

Session 1

Implementing the Restructuring process

■ Understanding different stakeholder objec-tives

■ Creating the restructuring team ■ The 10 point plan for effective restructur-

ing ■ The case for and against a moratorium ■ Mediation ■ Workout arrangements and responsibilities

within the lending institution ■ Protecting security throughout the workout ■ Financial projections and sustainable cash

flow and debt ■ The importance of the Independent Busi-

ness Review ■ Negotiations and pricing the workout

Session 2

Workshop – Having reviewed the implementation process and the various worked examples developed during the session, in their project teams the attendees will review a new major new case study problem loan complete with financial forecasts in an excel financial model. In order to assess whether they would proceed with the restructuring, the attendees will draft the Scope of Works for an Independent Business Review as part of their initial analysis

Sessions 3 & 4

Final Case study - Implementing the restructuring process in practice.

Final Case Study Workshop – Using a new case study, the attendees working in their project teams, will provide a complete restructuring / workout solution to the problem loan on the basis of the information covered during the course. They will required to identify the key EWS inherent in the problem loan, review the sensitivity of the forecast financial projections in the excel model and propose a schedule of the restructured loan. The team will also include terms of a Standstill

Agreement, if required. A selected team will asked to present their restructuring solution to the rest of the delegates.






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Anti Money Laundering - Financial Crime ComplianceDate: 19-20 Mar 2018, 30-31 Oct 2018

Location: London Standard Price: £1,050 + VATMembership Price: £840 + VAT

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Course Overview

BackgroundThe cost for anti-money laundering compliance in both banking and non-banking institutions is increasing at an exponential rate. Financial crime is becoming highly sophisticated while the global financial ecosystem and regulators are playing catch-up to technology.

Despite tremendous global coordination efforts by the Financial Action Task Force (FATF) on money laundering since its establishment in 1989, less than 1% of the global volume is detected according to the UN. The root cause however lies in the fact that the financial system and regulations are antiquated with today’s sophistication of financial crime and technological opportunities.

Day One - will cover the different development in the market that modifies the process of money laundering and helps doing the compliance function differently.

Day Two - adopts a practical approach to financial crime prevention and cautions on the different pitfalls in financial crime.

Who Should Attend:Officers from both financial and non-financial industries;

1. Banks, Insurance companies, Trusts, Offshore management companies, Investment Companies, Leasing companies, Construction companies & Real Estate agencies, Money changers, IT industry, Gaming Industry, those dealing in precious stones, Stock brokers, Consulting firms, Business owners, Private hospitals, Importers/Exporters, Internet based businesses, and all organisations wishing to limit their money laundering exposure risk.

2. Key players focussing on Financial Crime Prevention measures and establishing a robust systems to combat financial crimes i.e Regulatory bodies, Investigators / Fraud Examiners, Tax officers, Govt officers, Good Governance, Consultants, Risk and Compliance professionals, MLROs, Internal/External auditors, Senior managers and Top management, IT officers, Accountants/Solicitors and other professionals involved in the prevention of financial crimes.

Methods of Money Laundering: ■ Banks - (Case study) ■ Insurance companies - (Case Study) ■ Offshore Vehicles - (Case Study) ■ Trusts - (Case Study) ■ Investment Companies - (Case Study) ■ Money changer - (Case study) ■ Other vehicles behind money laundering ■ Making dirty money clean ■ Predicate Crimes

Financial Crime Prevention Practices and Effectiveness of KYC Policies ■ CDD, KYC & IDV ■ Sanctions ■ Customer Due Diligence. ■ Politically Exposed Persons ■ KYC: Specific Identification & Verification

Issues. ■ Suspicion & Escalation. ■ Managing Methods of Money Laundering

■ Legitimate but Potentially high risk StructuresCase study: The Interaction Between the Risk-Based Approach and Management of High-Risk ClientsMoney Laundering Regulations 2017 ■ Changes ■ General risk assessment ■ Risk mitigation policies ■ Level of due diligence ■ Reliance on third parties ■ PEPs ■ New Criminal Offence ■ Office for Professional Body Anti-Money Laun-

dering Supervision (OPBAS).Risk Based Approach ■ What does this mean ■ How should it work ■ What are the key differences ■ Enhanced Due diligence – what does this

meanNew emerging trend worldwide to fight financial crime ■ Distributed Ledger Technology ■ Blockchain Technology


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Anti Money Laundering - Financial Crime ComplianceContinued

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Course Content

■ Uses/Effects/Advantages in different sectors -private/ Govt /Para-statal Bodies

■ Best Practices Worldwide

Application of Distributed Ledger Technology & Blockchain KYC Solutions ■ Electronic KYC solutions ■ DLT & Blockchain ■ Trust technology

Case Studies – Three separate case studies to illustrate the methodologies/risks

Bulk cash smuggling and mobile technologies ■ Money laundering risks to banking institu-

tions. ■ Money Laundering risks to other non bank-

ing institutions / Govt Sectors ■ Methodology of bulk cash smuggling ■ Red flags which institutions should monitor. ■ Why mobile technology poses the next big

money laundering threat.

Case studies – several to illustrate the risks

Sanctions – Brief Overview ■ Who sets them & why are they set ■ Who is impacted, What are they ■ OFAC ■ How should an institution screen for them ■ Can we adopt a risk based approach when

tolerance is zero?

Electronic AML Solutions ■ Benefits ■ Functional components ■ Internet Banking ■ Internet Casinos ■ Prepaid Cards and E-Cash

Deerisking and AML in the Financial Sector ■ Impact of de-risking ■ From banks to non-banks ■ The Panama Papers fallout ■ Shell companies identified ■ Trusts ■ Bearer Bonds & Securities ■ The inherent risks in doing international

business ■ Processing international ■ Preparedness of financial institutions to

show examiners that there’s a robust due diligence and investigation process in place

■ Identifying these companies and the asso-ciated names.

Case Studies

Specific Identification & Verification Issues ■ Trust nominee and fiduciary accounts ■ Corporate vehicles ■ Introduced business ■ Client accounts opened by professional

intermediaries ■ Non face to face customers ■ Introduced business

Terrorist Financing ■ Differences and Similarities between ML

and TF ■ Detecting TF ■ Informal Value Transfer Systems ■ Charities / Non-Profit Organisation

Suspicion & Escalation ■ What must banks have in place ■ An effective escalation process ■ Concern ■ Suspicion ■ Access & Process ■ Communication lines ■ Suspicious Activity Reports / Suspicious

Transaction Report ■ The importance of a direct link ■ Whistle blowing

Risk Based Approach to Managing Methods of Money Laundering ■ Case study on: A Piecemeal Approach to

Financial Crime ■ Case study on: Failure to Connect the

Dots Across Systems ■ Case study on: Cost Driven to the Detri-

ment of Prevention ■ Case study on: Doing Too Little Too Late ■ Case Study on:Neglecting Organizational

Behavior Changes

Cyber Risks – New Technologies ■ Internet Banking ■ Internet Casinos ■ Prepaid Cards and E-Cash

Open Forum Talking Points- ■ AML Policies and Procedures - What is the

difference and why are they important? ■ Probability of an offence crystallising ■ Risk of not reporting ■ Understanding what ML & TF is - dispelling

the myths!




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Anti Money Laundering - Financial Crime ComplianceContinued

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Course Content

■ Government and other Sanction risk in practice

■ Understanding the difference between KYC - ID&V - CDD

■ Profiling customers - what does it mean?

END




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Asset Based LendingDate: 05 Oct 2018


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Course Overview

Asset based lending (“ABL”) has been a well established part of the financing environment in the U.S. for many years and has seen increasing volumes globally. Despite this ABL has struggled to gain the same level of acceptance here for three reason; first, a lack of familiarity, if not confusion, with the product; second, borrower’s reluctance to abandon their traditional-bank led facilities and last, the dated perception of the product. These headwinds are abating and 2015 has seen record issuance in Europe as borrowers, both corporate and PE, are increasingly recognizing the multiple benefits of ABL, not least the increased flexibility and reduced cost vis-à-vis RCFs.

In practice the credit markets adopt two distinct approaches to a credit decision: a cash-flow based approach and an asset-based approach which includes asset based lending. Most lenders are familiar with the former but not the latter. Moreover, ABL is often confused with other asset-related financing techniques especially asset-backed lending and asset finance. In simple terms ABL is a form of secured lending where loans are advanced against specific assets. The main focus is on working capital, although ABL also extends to hard assets such as plant, machinery and equipment, real estate and, more rarely, intangibles.

This programme provides practitioners with a practical toolkit to understanding ABL from the perspective of borrow, advisor, supporting professional and lender. It covers the key assets to which ABL is applied and the typical terms and conditions applied to each class. It also identifies the pros and cons in each asset class such, for example, retention of title in the case of inventory and ineligible items in the case of accounts receivable.

In the U.S. market ABL is frequently used along-side with other forms of lending (especially high yield bonds) and this is partly true of Europe, however, thus far inter-creditor have inhibited these structures from evolving in Europe although these problems have been addressed by asset based lenders who are adopting an increasingly borrower-friendly approach in order to gain market share. For the same reason ABL are also more willing to up their ABL facilities with cash-flow based facilities

The programme will include a number of hands-on cases illustrating ABL in practice which will provide a practical angle to the topic and reinforce the learning experience.

Introduction ■ Two approaches to the credit decision

• Cash-flow based lending• Asset based lending

■ Asset based lending defined and compared with other asset-related finance techniques• Asset-backed lending • Asset Finance compared

■ Comparison of funding options • TLB vs. HYB vs. Cash flow vs. RCF

■ Which types of business are suitable for ABL ■ Which types of firms are not suitable for

ABL ■ Two key concepts in ABL

• The “borrowing base”• “Headroom”

■ Use and application of ABL• M&A• Restructuring• General corporate purposes• Other

ABL in in tandem with other funding sources ■ ABL and traditional senior (bank) loan facili-

ties ■ ABL & high yield bonds (q.v. review of Algeco

Scotsman) ■ ABL & Unitranche

Key intercreditor issues for the ABL ■ Security – resolving the conflict over compet-

ing claims for collateral• Review of various approaches

■ Enforcement Standstills – resolving conflicting agendas with other lenders

■ Option to purchase – does it help ■ Consents & Waivers

Case: Review of key conflict issues between ABL and other funders

Financing accounts receivable (“AR”) ■ The basic approach


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Asset Based LendingContinued

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Course Content

■ Loan vs. debt purchase structure• Confidential Invoice discounting• Disclosed Invoice discounting• Full service Factoring

■ Key differences between discounting and factoring

■ The key benefits of ABL ■ Critical legal issues for lenders ■ Key accounting issues – off-balance sheet or

not requirements• Recourse vs. Non-recourse• Credit insurance – key issues and tips

■ Ineligible AR – review of typical ineligibles ■ Other typical limits

• Permitted territories• Permitted currencies• Debtor concentrations• Export concentrations

■ Typical Reserves ■ Calculating the advance

Case: Calculate the effective Advance rate on AR Inventory financing ■ What types of inventory qualify

• Finished goods• WIP• Raw materials / Commodities• Typical list of ineligible stock

■ Calculating the Advance• Gross Orderly Liquidation Value• Net Orderly Liquidation Value• Reserves

■ Typical reserves • Prescribed part• Employees• Preferential creditors• Landlord’s “distraint”

■ Retention of title issues – “simple” vs. “all monies”

■ Key risks for the lender ■ Specific issues with “branded” products

Plant, Machinery & Equipment ■ What types of PME qualify ■ Key concerns for the lenders

• Ability to sell & relocation ■ Advance rates ■ Pros and cons of other forms of funding

(leasing, vendor finance) ■ Key terms of the facility

• Margins, amortisation & tenors ■ Funding PME on a revolving (inventory)

basis ■ Legal issues – Taking adequate security

• Plating (why it isn’t always an option)

Real Estate ■ What types of property qualifies ■ Advance rates ■ Valuation issues ■ Key terms of the facility

• Margins, amortisation & tenors ■ Pros & cons of using ABL vs. specialist lenders ■ Legal issues – taking adequate security

Other matters - overview ■ Intangible Assets - Rationale for leveraging

intangibles (unlocking hidden value)• What types of intangibles qualify

■ Cash flow (top-up) loans• Typical terms• Potential pitfalls for the parties

Case: Create a funding structure using ABL Documentation: Overview of a typical term sheet ■ Review of main headings ■ Security package ■ Information & Reporting requirements ■ Financial covenants

• why and when ■ Operational undertakings

• “Dilution” defined ■ Reps and Warranties – typical ■ Events of Default ■ Fees and charges (one size does not fit all) ■ The lender’s approach to margin, fees and

charges ■ Other costs and expenses ■ Exit / termination fees

• “Typical” fees – review various options• Typical triggers• Issues for Borrower’s to consider (potential

pitfalls)




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Bond DocumentationDate: 08 Mar 2018, 18 Sep 2018

Location: London Standard Price: £695 +VAT Membership : £556 +VAT

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Course ObjectivesParticipants will: ■ Be introduced to the international capital markets, the ICMA and the key features of bonds. ■ Get an overview of the plain vanilla listed securities, including the four stages of a bond issue. ■ Have explained to them the bond documentations with the payment obligations and mechanics,

including bond trustees and bondholder meetings. ■ Gain an understanding of the prospectus directive (PD) with the PD regulations and key provi-

sions. ■ Learn about the EU and UK regulatory frameworks.

Trained as a lawyer, the trainer has over 19 years experience in international banking and structured finance transactions, including real estate finance, loans, leverage finance, debt capital markets, securitisation, structured products, repos, derivatives and financial regulatory and compliance. She has been actively involved in the creation of innovative award winning structured transactions and negotiating complex financings.

She has advised global institutions such as Credit Suisse, Citigroup and Goldman Sachs and spent many years practicing law at Allen & Overy LLP, Linklaters and Sidley Austin Brown & Wood in multiple jurisdictions including London, New York, Hong Kong, Singapore etc.She holds a Law LL.B (Hons) degree from University College London and has worked in the Finance Know-how team at Clifford Chance. She is an author and now runs her own business advisory, training and legal consultancy.

This Bond Documentation course provides an overview of debt securities and bond trading. It is relevant for in-house lawyers and private practice lawyers alike as well as bankers, bond traders involved in anything from the day to day business such as the usual plain vanilla bonds to the more complex heavily negotiated transactions involving structured securities or unusual assets. This course will also be relevant to the Operations and Documentation teams involved in bond transactions from time to time, structurers, compliance personnel as well as accountants who advise clients on bond trades.

The first part of this course sets the scene by giving an introduction to the international capital markets, the categories of securities and characteristics of plain vanilla bond securities. We then cover the 4 stages of a bond issue and look at stand-alone vs programme-based bond issues.

We go through the various aspects of due diligence that is required followed by a review of the bond documentation overview. In this part we cover the key parties and documents involved, the payment obligations and mechanics and the terms and conditions of the bonds. We discuss in detail the subscription agreement, the representations, warranties, covenants, conditions precedent and the key areas of negotiation. We discuss the events of default and the role of the trustee followed by legal opinions, ratings and the issues around the clearing and settlement of bonds.

Background of the trainer

Course Overview


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Introduction ■ The International Capital Markets ■ The ICMA ■ 4 Categories of Securities ■ Key Features of Bonds ■ Key Concepts

• Fungibility• Negative Pledges• Custody• Subordination

ӹLegal ӹStructural ӹContractual

ӹ Trust Subordination ӹ Contingent Debt Subordination

• Bearer vs Registered Bonds• Global vs Definitive Bonds• Temporary vs Permanent Global Notes• CGN vs NGN Structure

Plain Vanilla Listed Securities ■ 4 Stages of a Stand-alone Bond Issue ■ Programme-based Note Issue ■ Due Diligence

• Purpose and Scope• Legal due diligence• Accounting and financial due diligence• Business due diligence• Process

Overview of Bond Documentation ■ Parties Involved ■ Main Documents

• Fiscal Agent Structure

• Trust Structure ■ Payment Obligations

• Bullet vs Amortising• Call/Put Options• Spens Clause• Failure to Pay

■ Payment Mechanics• Paying Agent and Credit Lines• Calculating Fixed and Floating Rate Inter-

est• Day Count Fractions• Withholding Tax and FATCA

■ Terms and Conditions of Bonds ■ Representations and Warranties ■ Covenants ■ Events of Default ■ Bond Trustees and Bondholder Meetings ■ Subscription Agreement

• Key Terms• Key Areas of Negotiation

■ Legal Opinions• Issues to be covered• Reliance• 10b-5 Opinions

■ Credit Rating of Bonds ■ Clearing and Settlement of Bonds ■ Selling Restrictions

• EU• US• Other Jurisdictions


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Commercial Real Estate and Debt FinanceDate: 29 Nov 2018

Location: London Standard Price: £575 + VATMembership: £460 + VAT

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The Trainer has over 40 years’ experience in banking, finance and financial training. He has had practical banking experience with major banks in the areas of corporate credit analysis, Corporate Banking Relationship Management and Commercial Real Estate Debt Finance. The trainer was subsequently involved in Commercial Real Estate Financial Advisory business with a then newly formed financial services subsidiary of one of the world’s largest Real Estate advisory firms.

The Trainer has almost 25 years’ financial training experience in about 60 countries focused on large scale Corporate Credit Analysis, Corporate Banking and Structured Debt Finance (Project, Infrastructure and Real Estate Finance). He holds an MSc Real Estate Investment and Finance degree from the University of Reading (2014).

The trainer has worked with participants in a wide range of job functions and experience from Commercial and Investment Banks, Development Finance Institutions, Export Credit Agencies, Public Sector organisations and large corporates.

Commercial Real Estate is a major investment Asset Class, represents a very substantial portion of corporate assets and provides collateral and credit support for a huge volume of bank and Capital Markets financings, ranging from lending to the SME sector to Commercial Mortgage Backed Securitisations.

Risks:Commercial Real Estate values are very sensitive to the underlying economic fundamentals as well as the financial markets. Additionally Commercial Real Estate values and performance are also influenced by specific factors such as the quality of the Real Estate, lease terms, tenant risk, market sector and geographic focus making it essential to understand the specifics of each Commercial Real Estate Asset.

Objectives of the training:By the end of this course, participants will be able to: ■ Assess the key risk issues in Commercial Risk and risk mitigation techniques; overview of

developments in the Commercial Real Estate markets ■ Macroeconomic cycles…what can be learned from past economic cycles? ■ Recent developments and issues arising from the “credit crisis” ■ Key risks and mitigants in Commercial Real Estate Financings

Exercise: Review of a commercial real estate financing to identify key credit risks and potential mitigants

Principles of Commercial Real Estate Valuation ■ Summary of Commercial Real Estate valuation methods and how the different methods can influ-

ence value• Comparable buildings• Capitalisation of yields• Open Market Values• Discounted cashflow valuation methods

■ Occupational lease terms – examples from selected markets, and how this affects value ■ Yields in Commercial Real Estate Valuations

• Initial yields• Reversionary yields• Equivalent yields

■ Development vs investment financings, and factors to consider in valuation assumptions

Exercise: Calculating and sensitising Commercial Real Estate Finance valuations using discounted cashflow techniques

Commercial Real Estate Companies and Investment vehicles ■ Typical types of Commercial Real Estate investment companies and their approach

• Developers• Trading companies• Investment companies

■ Real Estate Investment Trusts (REIT) vs non REIT


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Commercial Real Estate and Debt FinanceContinued...

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Risk and risk mitigation techniques; overview of developments in the Commercial Real Estate markets ■ Macroeconomic cycles…what can be learned

from past economic cycles? ■ Recent developments and issues arising from

the “credit crisis” ■ Key risks and mitigants in Commercial Real

Estate Financings

Exercise: Review of a commercial real estate financing to identify key credit risks and potential mitigants

Principles of Commercial Real Estate Valuation ■ Summary of Commercial Real Estate valua-

tion methods and how the different methods can influence value• Comparable buildings• Capitalisation of yields• Open Market Values• Discounted cashflow valuation methods

■ Occupational lease terms – examples from selected markets, and how this affects value

■ Yields in Commercial Real Estate Valuations• Initial yields• Reversionary yields• Equivalent yields

■ Development vs investment financings, and factors to consider in valuation assumptions

Exercise: Calculating and sensitising Commercial Real Estate Finance valuations using discounted cashflow techniques

Commercial Real Estate Companies and Investment vehicles ■ Typical types of Commercial Real Estate in-

vestment companies and their approach • Developers• Trading companies• Investment companies

■ Real Estate Investment Trusts (REIT) vs non REIT

■ Commercial Real Estate Funds ■ What are the key elements of a creditworthy

Commercial Real Estate company – principal elements in credit rating

Exercise: Review of key aspects of the financial statements of a Commercial Real Estate Company or REIT

Debt financing choices for Commercial Real Estate transactions and debt structuring issues

Financing choices ■ Private debt financing choices

• Development vs investment financings• Asset specific financing• Secured vs unsecured debt• Senior vs subordinated / mezzanine debt• Sale and leaseback transactions• Capital markets financings• Use of hybrid financings – convertible bonds

■ Commercial Mortgage Backed securitisations – review of a Commercial Mortgage Backed Securitisation

Case Study: participants review and sensitise a financial model with a view to developing an acceptable debt structure for a Commercial Real Estate project

Risk and return in Commercial Real Estate Finance – the equity investors’ perspective ■ Principles of evaluating investments – dis-

counted cashflow methods, NPV and IRR ■ Value creation – the development process;

active Real Estate management; financial market influences

■ Risk and return – Commercial Real Estate Finance vs other asset classes

■ Use of Equity vs. Subordinated Debt

Case Study: sensitising a financial model for a Commercial Real Estate project to illustrate the sensitivity of equity related returns to key assumptions

Debt structuring issues and risk mitigation techniques ■ Use of covenants and developing a covenant

package• Debt Service Coverage measures (interest

and debt service coverage)• Asset Coverage measures (Loan to Value

ratio and “top up” requirements)• Development vs. investment financings –

completion and cost overrun undertakings ■ Third party credit support

Case Study: participants review the key elements of a summarised Term Sheet



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Cybercrime: An Overview for Non-FinTech ManagersDate: 27 April 2018, 29 Oct 2018


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Course Overview

Background

Cybercrime prevention in general and data security in particular, are now mainstream priorities for all risk functions in any institution. Recent breaches and leaks have highlighted how catastrophic a breach of either can be.

This workshop style course considers the topic from the viewpoint of a non Fintech specialist risk manager responsible for this area of financial crime and who is dealing with Fintech colleagues as part of the process. The course examines the type, frequency and methodology of cyber-attacks and what robust internal measures can be put in place to manage and mitigate them.

Methodology:

Workshop style with participation from delegates actively encouraged. Case studies will be used to supplement the learning process

Participants will:

■ Be introduced to what is cybercrime included the basics and advanced protections to it. ■ Get an overview of who sets the rules, such as the regulators, legal framework and best practice

& the poor practice ■ Have explained to how data is stored and accessed ■ Gain an understanding of the operational risk factors such as the policing of emails, the compli-

ance rules and enforcement and the password and other access security ■ Be taught about the criminal with examples of recent breached and organised cybercrime.

Introduction:

■ What is Cybercrime? ■ How is it done? ■ Examples ■ What are institutions required to put in

place? – overview ■ Who is responsible for cyber resilience? ■ How do you spot a cyber attack? ■ Basic protections ■ Advanced protections ■ Cost benefit considerations

Case study/Exercise

Who sets the rules?

■ Regulators ■ Legal framework ■ Best practice

■ Poor practice

Case study/Exercise

Mitigants

■ Do you actually understand how data is stored and accessed?

■ Data security ■ Access controls ■ “God” powers ■ Training the team ■ Policing the system ■ Management information

Case study/Exercise

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Operational Risk Factors

■ The policing of emails ■ Compliance rules and enforcement ■ Embedding the appropriate culture ■ Convincing colleagues this is a mainstream

risk ■ Social media ■ Surfing ■ Password and other access security ■ USB’s and other storage devices must be

prohibited ■ Managing people risk

Case study/Exercise

The Clever Criminal

■ Typologies ■ Examples of recent breaches ■ Organised cybercrime ■ Scams ■ Examples of recent scams ■ Identity theft ■ Email fraud ■ Denial of service attacks ■ “Ransomware” ■ Protecting against all of the above

Case study/Exercise

Learning Lessons

■ Recording “near misses” ■ Root cause analysis – constructive, not a

witch –hunt ■ The three plus two lines of defence model ■ The role of compliance ■ The role of internal auditors

Case study/Exercise

Course Conclusion

■ Summary ■ Open forum

END


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ISDA DOCUMENTATIONDate: 10 Oct 2018


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Course Objectvies

THIS COURSE IS PART 1 OF A TWO PART COURSE, THE SECOND PART IS TITLED “NEGOTIATING ISDA MASTER AGREEMENTS”. It is highly recommended that participants attend Part 2 of this course after attending this Part 1 as the content in Part 2 is a follow up from Part 1 and covers all the salient issues related to ISDA documentation that can not be covered in Part 1 due to time contraints. Part 1 of this course provides full coverage of the important aspects of derivatives trading. It is relevant for in-house lawyers and private practice lawyers alike, traders and bankers involved in complex structuring involving swaps, ISDA documentation teams, operations teams that book ISDA trades, compliance personnel responsible for ensuring that all regulations relating to ISDA transactions are complied with as well as accountants who advise clients on swap transactions. The first part of this course sets the scene by giving an introduction to derivatives; what they are, why they are used, who uses them and how they are traded. We then go through the various types of derivative products in the market showing the potential of the use of derivatives in a wide range of product sectors. We also cover the claims for mis-selling of swaps under and the relevant claims and case law under English law. The second part of the course covers the workings of the derivatives market and the trade association, ISDA. We then go through the ISDA documentation framework including coverage of the ancillary ISDA documentation. We then cover the pertinent issues in ISDA documented trades such as netting, mark to market valuations, negative interest rates, events of default and early termination to name a few. We will then discuss how to document derivatives in loan transactions and cover some English law cases. The third part of the course will cover the upcoming EU regulatory changes effecting derivatives with a timeline on what to expect when. We will go through how the banks and law firms should prepare for such changes with practical guidance where appropriate. Additionally, we will also cover off some of the more pertinent US regulatory changes that will impact derivatives trading in the UK. We then round of with a discussion on the implications of Brexit on derivatives transactions and documents. Please note that this section is subject to change depending on the time of the year this training course is delivered as per the regulations and guidance that are published from time to time.

Participants will: ■ Get an overview of what derivatives are, including the aspects and the types of risks hedged ■ Be introduced to how derivatives are traded ■ Have explained to them the different types of derivatives including swaps and equity & credit

deriviatives ■ Learn about ISDA documentation with ISDA definitions and ISDA Credit Support Annexes and

Credit Support Deeds ■ Be appraised of the financial collateral regulations and pertinent

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ISDA DOCUMENTATION

Introduction: Derivatives overview What are derivatives? ■ Legal concerns:

• Gaming laws • Insurance laws

■ Types of risks hedged: • Currency risk • Interest rate risk • Commodity risk • Weather risk • Inflation risk • Mortality risk

■ Credit Risk – Regulatory capital and balance sheet treatment

■ Synthetics

How are derivatives traded? ■ Over the counter (OTC) ■ Exchange traded

Types of derivatives ■ Swaps

• Interest Rate Swaps • Interest Rate Caps • Interest Rate Floors • Interest Rate Collars • Currency Swaps

■ Options • Strike price • Call Option • Put Option • European Style Option • American Style Option • Bermudan Style Option

■ Forwards and Futures ■ Equity derivatives ■ Credit derivatives

• Reference Entity • Reference Obligations • Credit Events

■ Swaptions ■ Total Return Swaps ■ Commodity derivatives ■ Property derivatives ■

Mis-selling of Swaps Claims under English Law ■ Economic climate since 2007 ■ s166 FSMA Review ■ Types of Claims

• Breach of Statutory Duty – s138D FSMA: FCA COBS rules

• Contract – Advisory relationship • Tort – Duty of care • Misrepresentation

ӹMisrepresentation Act 1967 ӹTort – Negligence ӹTort - Fraudulent ӹ Implied

• Contractual Estoppel • Limitation

■ Case law

ISDA Documentation Introduction ■ The ISDA ■ Architecture of the ISDA documentation

• 1992 multi-currency cross-border version • 1992 local currency – single jurisdiction

version • 2002 version

■ Summary of the ISDA documents and proto-cols

ISDA Protocols ■ What is an ISDA Protocol? ■ Procedure for Adherence ■ Protocol documentation

ISDA Definitions ■ 2006 ISDA Definitions ■ 2005 ISDA Commodity Definitions ■ 2014 ISDA Credit Derivatives Definitions ■ 2011 ISDA Equity Derivatives Definitions ■ 1998 FX and Currency Option Definitions

Pertinent Issues: ■ Mark to market valuations and Netting

• Insolvency • Section 6(e)

■ Early Termination and Events of Default • Steps to be taken • Commercial considerations • Netting legal opinions • ISDA’s 2017 Netting Memo on enforceabil-

ity fo close-out netting provisions in China for US and UK law governed ISDA agree-ments

■ ISDA 2014 Collateral Agreement Negative Interest Protocol

■ Tax • Tax representations and undertakings • Tax event • FATCA

■ Counterparty issues • Legal capacity • Limitations in constitutional documents

Case law ■ Hammersmith & Fulham




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■ Credit Suisse International v Stichting Vestia Groep

Documenting Derivatives in Loan Transactions ■ Key Features of a Structured Loan ■ Loan and ISDA Documentation ■ Events of Defaults ■ Additional Termination Events ■ Specified Entities ■ Notional Reductions ■ Collateral

Regulations EMIR ■ Purpose

• Increase stability• Standardisation • Risk mitigation

■ Scope of EMIR • Counterparties • CCPs• Trade repositories • Exemptions

■ Outline of obligations imposed • Clearing obligation • Reporting obligation • Risk mitigation requirements • New Margining Requirements • 2016 Variation Margin Protocol • ISDA SIMM

■ Timeline of implementation MiFID II and MiFIR ■ Purpose

• Transparency • Oversight

■ Scope • Regulated trading venues

ӹOTFs ӹMTF

• Broadens scope of MiFID ■ Impact on derivatives

• Trading on regulated markets • Information to investors • Limits on commodity trades • Level 2 measures

■ Timeline of implementation

MAD II ■ Purpose

• Replaces MAD • Extends market abuse regime

■ Scope • Includes spot commodities

• Expands definitions ■ Timeline of implementation

US Reforms ■ Dodd Frank Act

• Title VII • US Person

■ FATCA • Information reporting • Withholding tax • Affected parties • Payments affected in derivatives trades

ISDA DOCUMENTATION




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Drafting & Negotiating Issues in Real Estate Finance Documen-tation

Date: 29 June 2018, 18 Oct 2018 Location: London Standard Price: £695 + VAT

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THIS COURSE IS PART 2 OF A TWO PART COURSE, THE FIRST PART IS TITLED “ADVANCED NEGOTIATIONS & STRUCTURING ISSUES IN REAL ESTATE FINANCE TERM SHEETS”. It is highly recommended that participants attend Part 1 of this course prior to attending Part 2 as the content is a follow up from Part 1 and will not be repeated or summarised again in Part 2 due to time contraints. This course provides full coverage of the important aspects of drafting and negotiating real estate finance documentation. It covers topics from drafting or negotiating the REF Facility Agreement, the Security Documents, the Hedging Documents to a discussion around the issues related to Intercreditor Arrangements and Legal Opinions. It is relevant for in-house lawyers and private practice lawyers alike and bankers involved in complex structuring involving real estate finance and real estate finance documentation, lending/banking documentation teams, structurers, commercial real estate origination teams including originators, the sales team, commercial real estate investors, developers and borrowers as well as accountants who advise clients on real estate finance transactions. Initially we set the scene by going through the property related issues around due diligence and covenant of title. We then go through the key parties and documents involved in a typical real estate finance transaction. We then cover the drafting and negotiating points involving the REF Facility Agreement, including the drawdown mechanics, conditions precedent, representations and warranties, covenants and events of default. We then cover the Security Documents and discuss the issues around taking security, perfection and enforcement of security and cross-border security. The Intercreditor Arrangements are discussed including the key provisions for negotiation, cure rights etc. followed by the coverage of the ISDA Master Agreement provisions to be aware of when drafting and negotiation real estate finance documentation. Additionally, we will cover legal opinions and discuss what banking lawyers should consider for specific FATCA drafting.

Property Due Diligence ■ Purpose ■ Scope – Materiality ■ Investigation of Title ■ Certificate of Title ■ Warranties, Indemnities & Disclosure ■ Due Diligence Questionnaire ■ Due Diligence Report

Covenant of Title ■ Full Title Guarantees ■ Limited Title Guarantees ■ Subject to and actual knowledge

Key Parties Involved ■ Borrower entities ■ Syndicate of Lenders

■ Other Parties: • Investment Finance • Development Finance

Key Documents ■ Facility Agreement ■ Duty of Care Agreement ■ Property Documentation ■ Report on Title ■ Certificate of Title ■ Security Documents ■ Valuation Report ■ Insurance Report ■ Environment Report


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Drafting or Negotiating a REF Facility Agreement ■ Conditions Precedent

• For Investment Finance ӹValuation & Survey ӹ Insurance ӹTitle ӹSecurity ӹManagement ӹTax

• Additional CPs for Development Finance ӹ Insurance – for additional parties ӹDevelopment Documentation ӹSecurity

■ Prepayments & Cancellations • Mandatory Prepayments • Change of Control • Break costs

■ Interest Provisions • Interest Periods • Hedging • Calculation of Interest • Default Interest

■ Valuation Provisions • Definitions • Costs • Representations

■ Bank Account Provisions • Rent Account • Deposit Account • Disposal Account • VAT Account • General Account • Retention Account

■ Representations & Warranties • For Investment Facilities

ӹTitle ӹLegislation ӹSecurity ӹUse & Condition ӹ Reports

• For Development Facilities ӹOn the Development

• On the Development Documentation • When made and by whom • Qualifications • Common Negotiating Points

ӹFor Lender ӹFor Borrower

■ Covenants • Information Covenants • Financial Covenants • Property Covenants • Development Covenants • General Covenants • Common Negotiating Points

ӹFor Lender ӹFor Borrower

■ Events of Default • Standard Events of Default • Compulsory Purchase • Major Damage • Headlease • Insolvency of Significant Tenant • Abandonment • Completion • Step-in Agreements • Common Negotiating Points

ӹMaterial Adverse Effect ӹThresholds – Cross Defaults etc. ӹQualifications

Drafting or Negotiating the Security Documents ■ The Security Package ■ Covenants ■ Taking Security

• Land • Shares • Bank Accounts • Fixed vs Floating Charge • Contractual Rights • Insurance Policies • Development contracts and collateral war-

ranties ■ Perfection of Security ■ Enforcement ■ Cross Border Security

Intercreditor Arrangements ■ Key Provisions for Negotiation ■ Priority of Payments ■ Other Rights

Documenting Derivatives in Loan Transactions ■ ISDA Master Agreement and Schedule ■ Events of Defaults ■ Additional Termination Events ■ Specified Entities ■ Notional Reductions ■ Collateral

Legal Opinions ■ What legal opinions should cover ■ Foreign Legal Opinions

Drafting & Negotiating Issues in Real Estate Finance Documen-tation



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IFRS 9: The Latest UpdatesDate: 20 June 2018, 18 Oct 2018

Location: London Standard Price: £625 + VAT Membership Price: £500 + VAT

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Course Overview

International Financial Reporting Standard 9 (“IFRS 9”) is the accounting standard for financial instruments, which defines the classification, measurements and impairment of financial instruments. It is designed to make annual reports more meaningful to investors as well as simplify how auditors implement the rules and introduce safeguards to limit credit losses.

In July 2014, after several years of delay, the accounting regulators published the final text of IFRS 9. This combines revised versions of previously published sections with the first publication of the final and most controversial impairment section. IFRS 9 will become effective in 2018.

Through a mix of lecture and case studies, the workshop will equip participants to achieve a detailed understanding of the latest IFRS 9 standard, both for financial assets, liabilities and derivatives, including: ■ The classification and measurement of financial instruments; ■ The new impairment methodology based on expected losses; ■ The fair value of financial liabilities and deterioration of institutions’ own credit; ■ The different types of hedge accounting and the recent IFRS changes.

Session 1 - Introduction ■ What is IFRS 9? How does it differ from IAS

39? ■ What are financial assets and financial lia-

bilities? ■ IFRS 9 history and implementation over-

view

Session 2 – Financial Assets Classification & Measurement ■ Presentation of the three different catego-

ries• Amortised Costs;• Fair value through Profit & Loss (FVTPL);• Fair value through Other Comprehensive

Income (FVTOCI) ■ Accounting treatment determined by (i)

business model (ii) nature of cash flows ■ Decision tree to decide on classification of

financial instruments ■ Balance sheet and P&L calculation of a bond

at amortized cost• Based on the Internal Rate of Return

(IRR) of future cash flows• Treatment of fees in the IRR calculation

■ Balance sheet and P&L calculation of a bond at FVTPL and FVTOCI• Effective interest rate method for inter-

ests (same as amortised costs)• Unrealised gain based on NPV at current

yield of future cash flows ■ Reminder on determining fair value

• Level 1 based on unadjusted quoted price

• Level 2 based on quoted price in inactive

markets or observable model input• Level 3 based on unobservable but signifi-

cant inputs to the overall value

Case Study #1: participants will be presented with a few financial instruments and will classify them in their relevant categories

Case Study #2: participants will compute on Excel the impact on balance and P&L for different types of debt & equity instruments

Session 3 – Financial Assets Impairments ■ Applies to amortized cost and FVTOCI manda-

tory fixed income instruments ■ Incurred losses (IAS 39) has been replaced by

expected losses (IFRS 9) ■ Three stages process to determine impair-

ments• Stage 1: “12-month expected credit loss-

es” with effective interest rate on gross on gross carrying amount

• Stage 2: “life-time expected credit loss-es” with effective interest rate on gross on gross carrying amount

• Stage 3: “life-time expected credit losses” with effective interest rate on gross on am-ortised costs

■ Accounting treatment for financial instruments already impaired when acquired

Case Study #3: participants will assess the credit deterioration of a Greek bond throughout the crisis and its different stages

Session 4 – Financial Liabilities & Own Credit ■ Financial liabilities at amortised cost or FVTPL ■ Own credit deterioration reduces institutions’


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IFRS 9: The Latest Updates

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liabilities ■ Liability reduction due to rating down-

grade to be now classified in OCI

Case Study #4: participants will assess the impact on credit deterioration on institutions’ own bonds Session 5 – Hedge Accounting ■ Qualification for hedge accounting ■ Different types of hedge accounting, same

as IAS 39, except for time value of money and forward points in foreign exchange forward• Cash flow hedge• Fair value hedge• Net investment hedge for foreign sub-

sidiaries ■ Accounting treatment for time value of

money for options: a two-step process through OCI

■ Accounting treatment for foreign currency forward points in OCI

■ IFRS 9 hedge accounting more closely aligned to risk management policy• Removal of hedge effectiveness criteria

(80% to 125%)• Extends eligibility of risk component to

include non-financial items • Permits aggregate exposure that in-

cludes a derivative to be eligible hedged item

• Group of items and a net position (e.g. assets & liabilities or forecast sales & purchases) hedged collectively as group

Case Study #5: participants will classify a few hedging transactions in their relevant categories

Case Study #6: participants will value an interest rate swap accounted for as a cash flow hedge

Case Study #7: participants will review and assess different hedge scenarios including risk component hedging, aggregate exposures and net position



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NEGOTIATING ISDA MASTER AGREEMENTSDate: 20 Apr 2018, 11 Oct 2018

Location: London Standard Price: £625 +VAT Membership : £500 +VAT

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Course OverviewTHIS COURSE IS PART 2 OF A TWO PART COURSE, THE FIRST PART IS TITLED “ISDA DOCUMENTATION”. It is highly recommended that participants attend Part 1 of this course prior to attending Part 2 as the content is a follow up from Part 1 and will not be repeated or summarised again in Part 2 due to time contraints. Part 2 of this course covers pertinent issues related to the drafting, negotiating and understanding of the ISDA Master Agreements. This course is relevant for: 1. Lawyers both in private practice and in-house, 2. Traders, Bankers and Structurers involved in transactions involving swaps, CDSs, options, swaptions etc., 3. Operations teams involved with swaps, EMIR reporting etc., 4. ISDA documentation teams who typically draft and negotiate ISDA Master Agreements and trades, and 5. Accountants who advise clients on swap transactions. In this course we cover the ISDA documentation framework. A detailed clause by clause analysis is then undertaken of the 2002 ISDA Master Agreement followed by a comparison analysis between the 1992 and the 2002 ISDA Master Agreements. We will undertake a detailed analysis of the ISDA Schedule including any EMIR Regulation related language. The key negotiation points relevant in negotiating an ISDA Agreement will be covered off including the questions to ask depending on who you act for. We will then discuss the CSA, the Financial Collateral Regulations relating to the CSA specifically and the ancillary ISDA documentation. We will go through in detail the settlement netting and close-out netting and the calculations involved including how swaps are valued. We will cover off the Events of Default and Termination Events operative provisions, procedural timelines and checklists outlining the notice requirements, legal, commercial and operational points to tick off the list. We then cover off some case law and amendment to the ISDA Master Agreement. The final part of the course will be an Interactive Group Case Study involving the documenting an ISDA Schedule and key issues to consider. COPIES OF THE 2002 ISDA MASTER AGREEMENT AND THE ACCOMPANYING ISDA SCHEDULE WILL BE PROVIDED TO ALL PARTICIPANTS AS PART OF THIS COURSE

ISDA Documentation Introduction and Architecture of ISDA Documentation – See Part 1 of this course ISDA Master Agreement ■ Detailed clause by clause review (2002)

• Single Agreement ӹCherry picking

• Netting legal opinions ӹGoverning law on insolvency

• Conditions Precedent • Withholding tax • Representations • Undertakings • Events of Default • Termination Events • Early Termination • Transfer • Multi-branch Parties • Waiver of immunity

ӹArbitration clauses ■ Comparison of ISDA 2002 and 1992 Master

Agreements • Events of default provisions

ӹGrace periods ӹScope of the credit support default ӹBreach of agreement ӹSpecified Transactions ӹCross default provisions ӹMerger without assumption

• Termination Events ӹScope of Illegality ӹForce Majeure ӹGrace periods ӹTax event upon merger

• Methodology of calculating payments on early termination ӹFirst Method ӹSecond Method ӹMarket Quotation ӹLoss ӹSet-off ӹUnpaid amounts ӹClose-out amount


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Schedule to ISDA Master Agreement ■ Parts 1 to 5 – Negotiating points ■ EMIR related amendments

• Relevant EMIR Protocols: ӹ2013 EMIR Non-Financial Counterparty Representation ӹ2013 Reporting Protocol ӹ2013 EMIR Portfolio Reconciliation, Dis-pute Resolution and Disclosure Protocol ӹAdherence Letters ӹSuggested EMIR Related Amendments

ISDA Confirmation ■ Process on how trades are done ■ EMIR reporting

• 2013 EMIR Reporting Protocol • Grey area

ISDA Credit Support Annexes and Credit Support Deeds ■ Legal opinions ■ English law deeds and annexes ■ New York law annexes ■ 1995 ISDA Credit Support Annex ■ Close-out netting ■ Valuation agent ■ Eligible Credit Support ■ Haircuts and Valuation Percentages

Financial Collateral Regulations ■ Title transfer ■ Ring fencing ■ Close-out netting on insolvency

Netting and Valuation ■ Settlement Netting ■ Close-out Netting ■ Calculations ■ Mark to market valuations – How Swaps are

Valued

Events of Default and Termination Events ■ Step to follow on Early Termination ■ Conditions Precedent ■ Timeline – summary of process ■ Checklists

• Contractual terms breach • Events of Default and Termination Events • Legal, commercial and operational consid-

erations • Early Termination Procedures

Case law ■ Section 2(a)(iii)

• Lomas and others v JFB Firth Rixson Inc. and others

• ISDA Amendment

GROUP CASE STUDY: Participants to work in small groups to draft and negotiate with another group a first draft of the ISDA Schedule to the 2002 ISDA Master Agreement in accordance with the client instructions provided in the case study pack COPIES OF THE 2002 ISDA MASTER AGREEMENT AND THE ACCOMPANYING ISDA SCHEDULE WILL BE PROVIDED TO ALL PARTICIPANTS.

NEGOTIATING ISDA MASTER AGREEMENTS


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Negotiating & Issuing High Yield Bonds

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Course Objectives

Date: 1 Jun 2018, 20 Nov 2018Location: London Standard Price: £695 +VAT

Membership : £556 +VAT

Participants will: ■ Learn who is issuing HYB and why? Understand the size of the market, and what these bonds

look like when they are issued. ■ Understand how deals are brought to market, allowing for market conditions and examine the

documentation, which is key to the deals value. ■ Gain an understanding of the key terms, such as Pledges, Maintenance Covenants and Equity

Cures. ■ Appreciate the latest trends in the market and why they are happening. For example, why in-

vestors are excepting the move to Cov-Light deals, despite them not offering the same protec-tion as investors insisted on in the past.

■ Have explained to them all the main terminology used in HYB deals and just as importantly in what context they are used.

■ Will look at recent issues to highlight the main points discussed in the programme, and to illus-trate the terminology discussed.

Overview of High Yield Bonds ■ Size of the Market / Market Growth ■ Examples of High Yield Bonds

• A look at real bonds in today’s market place

■ Credit Ratings• The Ratings Agencies• Investment Grade v High Yield Debt

■ Current Credit Spreads

• What are the current Credit Spreads in the Market for High Yield Bonds

■ The Role of AFME• Association for Financial Markets in Europe• Focus on promoting transparency and li-

quidity in the high yield market• How affective are AFME?

■ Fallen Angels ■ Private Equity Issuance ■ Recent New Issues

• Case study: We look at recently issued

■

The High Yield Bond Market reached a record of €75bn issuance in 2017. This year has so far shown no signs of slowing down. Selecta Group, the Dutch incorporated food and drinks vending machine provider, started 2018 with two large issues, already equalling some of the largest deals of 2017. Both bonds were issued on the 1st February this year. Selecta issued two 6 year bonds; a €765 m 5.875% fixed and a €365m floater paying 3 month Euribor + 537.5 bp.

The HYB market is complex with detailed jargon and documentation. This course is designed to demystify the terms used in negotiating and issuing. We use real life examples to explain the issues in an easy to understand way. We will look in to the latest trends and explain the motivations and outcomes behind recent changes affecting the market, such as the deterioration of covenants and investor protection.

The programme is designed to give participants an in depth understanding of the High Yield Bond Markets and how deals are negotiated and issued. Delegates will understand how the market operates, seeing who is issuing and who is bringing the debt to market. We will look at recent “real life issues” as examples.

Course Overview

Course Content


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Negotiating & Issuing High Yield BondsContinued...

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High Yield Bonds from the market• What is being issued and why?

■ The Major Bookrunners• Ranking of Lead Managers / Global Capital• Life Cycle of an Issue

■ Origination / Syndication / Underwriting / Distribution

Pricing a High Yield Bond Issue ■ From the Government curve ■ From the Mid Swap curve

• Interest Rate Swaps Overview• Where Mid swap rates come from

■ Duration Risk• Market risk of a bond

■ What impact do changing interest rates have?

■ Case study: we look at the pricing of the recent issues of

• Aston martin• Selecta Group

The Documentation ■ Pledges

• Negative Pledges ■ Early redemption / Callable and Puttable

bonds• Examples are used to show the impact for

investors of call and put options imbedded in to bonds

■ Events of Default• Seizing Collateral• Recovery Rates

■ Cross Default ■ Risk Factors

• Case study: We look at an example of a High Yield Bond and discuss the “Risk Fac-tors” listed in the documentation.

Covenants ■ EBITDA as a constituent of Covenants ■ Maintenance Covenants ■ Case study: we look at examples of cove-

nants and their impact• Carve Outs• Baskets• Breach of Covenant

■ Covenant Erosion• Impact on the market of these recent

developments• Cov- Loose (leverage only financial main-

tenance)• Cov Light (Springing Leverage)

Equity Cure ■ Recent provision changes allowing the com-

pany to receive equity capital and the impact on investors

• Shareholders curing a covenant breach by injecting further equity funding.

• Case study: we look at an Equity Cure Sample Clause and discuss the meaning and jargon.

• Post Default Alternatives Toggle Notes ■ Deferred payment ■ PIK

Case study: Transaction Execution – the pre-launch task time line from week 1 through to week 6. We discuss all the steps that must be taken before we can bring an issue to market.

Exercise: Delegates look at a recent issue prospectus and examine the risk / reward ratio. Class discussion: Should we invest, what are the risks?


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Negotiating & Issuing High Yields BondsContinued...

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Course Content

■ Aggressive EBITDA add-backs ■ Ratio definitions applied differently leverage

vs other corporate actions ■ Flexibility for Limited Conditional Acquisi-

tions ■ Narrower numerators for leverage ratios ■ Enhanced Basket flexibility for Leverage &

EBITDA grower caps ■ Upfront “free & clear” basket credit in build-

up basket ■ Asset sales available for dividends ■ Looser Affiliate transactions ■ Equity clawbacks – what market ■ Redemption & Special optional redemption/

non-call diluted

Call Protection: Change of Control and Equity Claw ■ The “historical” change of control (CoC)

position • The “portability” issue – the 3 variations

on the standard CoC position ■ Standard call protection (absent CoC) –

Fixed vs FRNS ■ “Equity Claw”

• Investor issues • Issuer matter

Intercreditor Issues (LMA SSRCF) ■ Overview of key provisions ■ Assumed Funding Structure ■ Security Structure ■ Ranking ■ Payment waterfall ■ Restricted Payments ■ Enforcement

Specific Issues re: Junior (PIK) Notes ■ Specific issues relating to Junior notes ■ Review of Veralia PIK Notes (using Report

from Debt Explained) ■ Review of Schaffler PIK (using Report from

Debt Explained) ■ Review of key differences in PIK covenant

packages vs Senior Secured Notes cove-nants

■ Intercreditor issues in PIK deals

Included in the Appendices ■ Overview of the issuance process

• Initial preparation • Preparation phase • Targeting the investors (framing the is-

sue) • Execution phase

■ The Pricing discovery process





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Course Content

Advanced Negotiation & Structuring Issues in Real Estate Finance Term Sheets

Date: 13 Jun 2018, 17 Oct 2018 Location: London Standard Price: £695+VAT

Membership: £556 +VAT

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THIS COURSE IS PART 1 OF A TWO PART COURSE, THE SECOND PART IS TITLED “DRAFTING & NEGOTIATING ISSUES IN REAL ESTATE FINANCE DOCUMENTATION”. It is highly recommended that participants attend Part 2 of this course after attending this Part 1 as the content in Part 2 is a follow up from Part 1 and covers all the salient issues related to real estate finance documentation that can not be covered in Part 1 due to time contraints. This course covers the various methods of investing in Real Estate Finance including the various structures used and negotiating the real estate finance term sheets including discussions relating the bidding process and issues to consider relating to leveraged deals, large loan portfolio sales and/or acquisition of distressed assets including exit strategies and/or bridge take-outs. It is relevant for in-house lawyers and private practice lawyers alike and bankers involved in negotiating real estate finance term sheets, complex structuring involving real estate finance, leverage finance or acquisition finance, securitisation particularly CMBS, lending/banking documentation teams, structurers, commercial real estate origination teams including originators, the sales team, commercial real estate investors and borrowers as well as accountants who advise clients on real estate finance transactions or structured transactions with an element of commercial real estate finance. Whilst this is not a fully fledged course on Leverage Finance or Acquisition Finance, this course is also relevant to private equity houses, investors, commercial banks, wealth fund managers and hedge funds involved in loan portfolio sales backed by commercial real estate including sale and purchase of distressed assets. We start off this course setting the scene by discussing the various methods of investing in real estate finance and go on to cover the various typical structures including the key features of the Opco/Propco structure, REITs, Investment Finance and Development Finance. We discuss term sheets in general, the binding and non-binding terms and the points of negotiation from a lender’s perspective, a borrower’s perspective and some general points to bear in mind when drafting. We cover the key elements of a real estate finance term sheet – LMA version. For those of you likely to be involved in submission of bids for purchase of loan portfolios backed by real estate, we cover aspects of the bidding process in detail including commitment letters/mandate letters or the softer highly interest/confident letters, the heavily negotiated clauses and points, due diligence and the various documents and ancillary documents to be agreed. We map out the timeline and finish off this section by discussing distressed assets sale and acquisition. Additionally, we will cover the various exit strategies used for bridge finance take-out and/or to get further financing including full syndication, securitisation and tap issues to raise more financing. We will undertake an Interactive Group Case Study during this course whereby participants will be placed into various groups to negotiate the terms of financing and a term sheet for a real estate finance transaction. Complimentary materials will be provided to all participants.

Methods of Investing in Real Estate ■ Real Estate Investment Structures – Types

of Finance • The Lending Structure

ӹ Investment Finance • Structure & Key Features • Security Package & Guarantees • Drawdown, Repayment & Prepayment • Interest • Bank accounts ӹDevelopment Finance

• Structure & Key Features • Security Package • Collateral Warranties and Guarantees • Drawdown, Repayment & Prepayment • Interest • Bank accounts

• Flexible Financing Arrangements • Islamic Finance Structures • Sale and Leaseback

ӹOpco/Propco Structures • Ring fencing



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Course Overview


Continued BOOK NOW

• Syndication • Bridge take-out

• REITs ӹForm of a UK REIT ӹThe conditions ӹBreach ӹRingfence ӹProperty Rental Business ӹTax treatment

• Property Derivatives • China Real Estate Market Compared to

the US

Term Sheets ■ What is a Term Sheet ■ Reasons for having a Term Sheet ■ Process and Timing

ӹDuty to negotiate in good faith • Case law • Binding terms

■ Negotiation Guidelines • Borrower’s perspective • Lender’s perspective • General points to bear in mind

Real Estate Finance Term Sheet - LMA ■ Section 1 – Senior Facility Terms

• Security • Repayment, Prepayment & Cancellation • Bank Accounts • Representations & Warranties • Undertakings • Events of Default • Conditions Precedent

■ Section 2 – Mezzanine Facility Terms • Bank Accounts • Cross Defaults • Costs and Expenses

■ Section 3 – Intercreditor Agreement Terms • Security Ranking • Payments & Cure Periods • Security Enforcement • Waterfall

Group Case Study: Participants will work together to negotiate the terms of financing and a term sheet for a real estate finance transaction. Groups will be assigned different roles e.g. banker, sponsor, lender, seller). What’s the best deal you can negotiate?

Loan Portfolio Sale ■ The Bidding Process

• Commitment Letters • Highly Interested/Confident Letters • Due Diligence • Documents • Negotiations

ӹMAC clause ӹMarket Flex clause ӹClear Market provision

• Reliance Letters • Legal Opinions • Reports and Audits

■ Timeline ■ Acquiring Distressed Portfolios

Exit Strategies/Bridge Take-out ■ Syndication ■ Securitisation

Advanced Negotiation & Structuring Issues in Real Estate Finance Term Sheets



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Real Estate ModellingDate: 13-15 Mar 2018, 28-30 Nov 2018

Location: London Standard Price: £1,700 + VATMembership Price: £1,360 + VAT

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Background of the trainerCourse Methodology

This course will teach you all the available techniques and how to practically apply them through the use of Excel, Estatemaster and Argus. An extensive use of case studies will be adopted to illustrate the principles covered. Ultimately delegates will get practical tips on layout and style in building and analysing user-friendly models which are available as additional benefits of the course.

Who Should Attend

This course is designed for delegates who are seeking to improve their technical real estate modelling skills in Excel.

■ Bankers and financiers involved in real estate ■ Directors and business development executives from corporates, equity sponsors and consultan-

cies

Course Overview

Background of the trainerCourse Content

Day 1: Building Blocks of Real Estate Modelling

Using Excel for modelling ■ Worksheet organization ■ Data input, management and verification ■ Use of colour/add-ins ■ Naming of cells ■ Location of input variables ■ Review of Excel functions and their use ■ Macros and their use ■ Goal seeking ■ Optimisation ■ Circularity and how to resolve it ■ Working with range names ■ Graphs and charts ■ What is needed from Excel and what is

superfluous ■ Principles of spreadsheets and workbooks

Case Study: Evaluating good and bad Excel financial models

Equity valuation ■ Equity NPV/ IRR and project IRR ■ XNPV, XIRR, MIRR ■ Modelling cash flow and ratios: ■ Allowing for accountancy in real estate

models:• Depreciation• Tax• SPV accounting• Capital allowances

Case Study: Valuation and Cash Flow models

Fundamentals of Real Estate Models ■ Objectives of real estate models ■ Structure of real estate model design

■ Dealing with escalation/inflation ■ Monthly, quarterly and annual modelling ■ Design, testing and feedback ■ Model sensitivity and auditing ■ Revenue and cost modelling ■ Cash adequacy, recourse, standby and liquid-

ity ■ Financial coverage ratios and the bank per-

spective ■ What are the software choices for real estate

development? ■ Estatemaster vs Argus vs Excel

Demonstrations: Argus and Estatemaster

Real Estate development modelling issues ■ Architects, planners and real estate develop-

ment ■ Concept and objectives of Construct and Sell

(CS) models ■ Assumptions required for CS models ■ Development cashflow corkscrews ■ Sales prices and taxes ■ Valuation and risk analysis of real estate de-

velopment modelsCase Study: Examples of real estate development models

Real Estate investment modelling issues ■ Limited recourse and loan terms and cove-

nants in real estate lending ■ Structuring and financing solutions ■ Real estate investment finance experience

worldwide ■ Objectives of real estate investment models ■ Buy and Let (BL) discounted cash flow model-

ling issues ■ Risk analysis for real estate investment mod-

els


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Real Estate ModellingContinued...

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Case Study: Review of several real estate investment models and their decision-making input

Day 2: Building a Construct and Sell (CS) Model

Building a real estate model. Based on a real example, provided by an equity investor in a real estate transaction, delegates will construct and use a model for the transaction. The exercise will include:

■ Project Review ■ Analysing the inputs ■ Costing construction ■ Dealing with input priorities ■ Data plausibility ■ Modelling loan drawdown ■ Sales price projections and cap rates ■ Establishing value from a construct and

sale transaction

Day 3: Building a Discounted Cash Flow Model (DCF) model

Delegates will continue with the real example from Day 2 to construct a model based on the assumptions of construction, with revised assumptions, and leasing out. ■ Revising construction inputs ■ Loan assessment criteria ■ PGI, EGI and NOI in the model ■ Forecasting NOI and operating expenses ■ Modelling loan amortization ■ IRR NPV and other valuation analysis

Monte Carlo and real estate modelling ■ Methods of handling risk ■ What is Monte Carlo analysis? ■ Worked examples of Monte Carlo analysis ■ Applying Crystal Ball to CS and CL Models ■ Analysing the results ■ Presentation of Monte Carlo results to senior

management

Course Conclusion


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Risk & Capital Management Under Basel III and IFRS 9Date: 15-18 May 2018

Location: London Standard Price: £3,250 + VAT Membership Price: £2,600 + VAT

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Course Objectives

Participants Will: ■ Understand the traditional as well as the ever changing landscape of Risk & Capital Management ■ Understand the goals of the capital adequacy system ■ Comprehend the changes to capital rules under Basel III ■ Learn the new elements of Basel III & their effect on the different dimensions of risk manage-

ment. ■ Understand the capital adjustments and the new rules of risk weightings. ■ Provide the participants with a thorough knowledge on the Basel III liquidity package and the

repercussions of the new liquidity ratios ■ Learn about effective liquidity management and regulations ■ Comprehend the key elements and concepts of IFRS 9 framework and their implications on

changes to capital rules under Basel III ■ Understand the impact of IFRS 9 on credit risk ■ Learn how IFRS 9 requirements (expected to replace IAS 39 in January 2018) represent a signif-

icant change to how banks and financial service companies report their financial data; especially for customer default and expected losses

■ Provide the participants with an understanding of how expected credit losses models are impact-ed by macroeconomic scenarios and the new impairment rules of IFRS9

■ Analyze a value-at-risk approach to asset/liability management for effective risk control. ■ Gain a strong understanding of the IFRS 9 Impairment rule and the forward-looking provisioning

methodology; based on expected losses and its subsequent impact on business decisions and risk management functioning

■ Acquire knowledge of new accounting rules and credit risk practices under Basel III & IFRS 9 and their subsequent impact on financial reporting & thereby portfolio allocation decisions as well as risk management techniques

■ Evaluate the classification & measurement techniques of financial assets & instruments under IFRS 9

■ Understand effective regulatory risk management practices

Who Should Attend? ■ Board of Directors ■ Senior Bank Management Members ■ Central Bankers (Supervision Department) ■ ALCO Managers ■ Chief Risk Officers ■ Treasury Executives ■ Risk Managers ■ Chief Finance Officers ■ Finance Directors ■ Comptrollers ■ Portfolio Managers ■ Securities Analysts ■ Insurance Executives ■ Pension Fund Managers ■ Pension Fund Trustees ■ Investment Professionals ■ MIS and Operations Executives ■ Budgeting & Planning Executives


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Risk & Capital Management Under Basel III and IFRS 9Continued...

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Course Overview

DAY ONE

Overview and dynamics of Capital Management ■ Concepts & Definition ■ The role of capital and its significance ■ Key aspects to capital management ■ The development of capital standards for

banks ■ Overview of capital allocation in banking ■ Perspectives on Capital; Treasurer’s view,

Regulators’ Views, Risk Manager’s view & shareholders’ view

■ Composition of capital- Tier 1, Tier 2 & Tier 3 ■ Regulatory vs. Economic Capital ■ The concepts pf Expected vs. Unexpected

Losses ■ The concept of capital efficiency ■ Structure and dynamics of Balance Sheet

Capital Allocation Models ■ Concept & Overview ■ Approaches to Optimization ■ Assets volatility Approaches ■ Regulatory Capital Approaches ■ Risk-adjusted Models

• RAPM- Risk-adjusted Performance Measure• RAROA- Risk-adjusted Return on Assets• RAROC- Risk-adjusted Return on Capital

■ Earnings Volatility Models ■ EAR- Earnings-at-Risk Model

Functioning of Capital Management ■ The four As of Capital Management

• Adequacy• Attribution• Allocation• Architecture

■ Determining the optimal level & mix of capital ■ Strategic considerations for optimum capital ■ Bank’s Insolvency probability ■ Managing the bank’s capital adequacy ■ Determining the bank’s overall capital plan

CASE STUDY: Group discussion on the different variables that should be considered for determining the optimum level of capital and the various models for capital allocation.

DAY TWO

Liquidity Risk & Management ■ Liquidity Concepts ■ Bank Liquidity Risk

■ Concept & Definition ■ Types of Liquidity Risks ■ The Role of Confidence ■ Liquidity & Activity Ratios ■ Leverage & Default Issues ■ Contingency Planning

Measuring Bank Liquidity ■ The Cash-Flow Approach ■ Large Liability Dependence ■ Core Deposits To Assets ■ Loans & Leases to Assets ■ Loans & Leases to Core Deposits ■ Temporary Investments to Assets ■ Brokered Deposits to Total Deposits ■ Market-to-Book Value

Dynamics of Liquidity Management ■ The Formation of Expectations ■ Liquidity Planning ■ Faces of Liability Management

• Minimizing Deposit Interest Costs• Customer Relationships• Circumventive Regulatory Restrictions

■ Deposit Rate Ceilings ■ Reserve Requirements ■ Pricing & Methods of Deposit Insurance

CASE STUDY: Hypothetical numerical cases on assessing & quantifying the sensitivity of the bank’s financial transactions on its cash flows & NII.

CASE STUDY: Group discussion on the different variables affecting the bank’s liquidity position & the main contributions for illiquidity- A focus on Lehman Brothers’ rise & fall in 2008

DAY THREE

Interest Rate Risk- Overview & Measurement ■ Modeling interest rate risk ■ Deterministic vs. Stochastic models ■ Arbitrage models ■ Equilibrium models ■ Types of Interest Rate Risks ■ Yield Curve Risk ■ Basis Risk ■ Macaulay Duration ■ Modified Duration ■ Core Elements of Duration ■ Convexity Concept ■ Duration gap of Equity ■ Earnings versus Shareholder Value ■ Effective Duration & Effective Convexity




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Risk & Capital Management Under Basel III and IFRS 9Continued...

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■ Hedging Duration & Convexity ■ Concept of Negative Duration ■ Key Rate Duration ■ Math of Sensitivity Parameters

Measuring Risk Techniques ■ Sensitivity Parameters ■ Simulation Methodologies ■ Rate Shocks ■ Simple Simulation ■ Historical Simulation ■ Monte Carlo Simulation ■ Transfer Pricing as a Tool ■ Value-at-Risk ■ Core Elements of VAR ■ VaR Greeks & Math ■ Correlation & Covariance ■ VaR Methodologies ■ Implementation of VaR

CASE STUDY: Hypothetical numerical cases on assessing & quantifying the sensitivity of bonds & other option-embedded fixed-income securities to different parallel & un-parallel changes & twists in the yield curve.

Interest Rate & Credit Management Techniques ■ Interest Rate Derivatives ■ Interest Rate Swaps ■ Generic versus complex structures of Swaps ■ Interest Rate Options ■ Interest Rate Futures ■ Forward-Rate Agreements ■ Credit Derivatives ■ Types of Credit Derivatives

• Credit Default Swaps• Total Return Swaps• Credit Options; Standard and Exotic • Spread Options• Credit-Lined Noted (CLNs)• Collateralized Bond Obligations (CBOs)• Collateralized loan Obligations (CLOs)

CASE STUDY: Hypothetical numerical live case on the use of a wide gamut of derivatives instruments & structured products for coping with negative as well as positive duration gaps in a bank’s balance sheet .

CASE STUDY: Hypothetical numerical live cases on valuing & pricing different traditional & exotic on & off balance-sheet products and their implications on the

bank’s gap position .

CASE STUDY: Hypothetical numerical case on the concept of Bootstrapping & constructing the zero-coupon yield curve .

DAY FOUR

From Basel II to Basel III ■ Basel III Structure & main elements ■ Chronology of phasing-in the new Basel 3

standards ■ Basel III Pillars & new limits ■ Risk-based Capital Measures ■ Basel III new capital requirements

• Redefining Capital• Capital Ratios• Capital Buffers

■ Components of Capital ■ New concepts of Common Equity & Tier 1

capital ■ Basel 3 Treatment limits for Tier 1 and Tier

2 & 3 Capital ratios ■ Allowable Capital Deductions ■ Basel 3 treatment for hybrid investments ■ Basel 3 Standards for Minority interests

• Unconsolidated Financial Institutions• Deferred Tax Assets• Mortgage servicing-rights

■ Total risk-based capital ■ Capital Conservation ratio & Countercyclical

ratio ■ Non-risk-based measures ■ Leverage ratio ■ Concept of Systematic Banks ■ Timing & Transitional Arrangements

Basel III Liquidity Kit ■ Definitions and scope ■ Objectives of Basel 3 Liquidity package ■ New liquidity standards ■ Liquidity coverage ratio- LCR ■ Appropriate Asset Levels for LCR Inclusion ■ Net Stable Funding Ratio ■ Timing & Transitional Arrangements

Interfacing between Basel III & Risk Management ■ Changing rules of the game ■ Modus operandi of Basel III ■ Basel III Mechanics for credit risk ■ Basel III Mechanics for liquidity risk ■ Basel III Mechanics for Ops Risk

DAY FIVE




Course Content



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Course Overview


Risk & Capital Management Under Basel III and IFRS 9 BOOK NOW

IFRS 9: Overview & Concepts ■ Definitions and scope ■ Background & Objectives ■ Effective date & transition ■ Key differences between IFRS 9 and old

IAS 39 rules ■ New standards for the accounting of fi-

nancial standards ■ Convergence with U.S. GAAP ■ Phases of IFRS 9 Standard

• Classification & Measurement of finan-cial assets & liabilities

• Impairment• Hedge Accounting

Dynamics & Modus Operandi of IFRS 9 ■ Measurements of Financial Assets

• Amortized Cost Models; “Hold-to-Col-lect” Business Model and SPPI “Con-tractual Cash Flow Characteristics Test”- Payments of Principal & Interest

• Fair Value through other Comprehen-sive Income (FVOCI) for debt instru-ments and equity investments.

• Fair Value through Profit & Loss (FVT-PL)

■ Implications of the new accounting rules on financial reporting, thereby on busi-ness decisions as well as capital and risk management

■ Overview of the new Impairment model ■ General Impairment Model

• Recognition of Impairment- 12-month ECL (Expected Credit Losses)

• Lifetime Expected Credit Losses ■ Hedge Accounting

• Qualifying criteria & Effectiveness test-ing

• Hedged Items• Aggregate Exposures• Hedging Instruments• Derivatives & Hybrid contracts

■ Expected Credit Loss Module (ECL)• PD (probability of default)• LGD (Loss given default)• EAD (Exposure at default)• CCF (Credit Conversion Factor)

■ Bridging the gap between IFRS 9 stand-ard and ALM activities

■ Impact of IFRS 9 ECL on balance sheet management

■ Credit Adjusted ALM

CASE STUDY: Group discussion on the challenges facing banks & financial institutions, struggling for the implementation of IFRS 9, prior to the final date of January 2018.

CASE STUDY: Group discussion on the differences between the new IFRS 9 and the old IAS 39; and the eventual impact on business and financial decisions as well as risk dimensions.




Securitisation & Structured Products: Upcoming Regulatory ChangeDates: 26 Sep 2018


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Course Overview

This Structured Products & Upcoming Regulatory Changes course is designed to provide coverage of the important aspects of upcoming regulatory changes within the securitisation and structured products arena and the popular structured products in the market.

During the course, we will go through an exercise covering example scenarios whereby you may come across inside information. This could happen, for example, in the course of advising or dealing with clients or when you are working on documents, when you enter a meeting room or even if you overhear a conversation in the lift or see a document left on a printer. The new rules (“Market Abuse Regulation”) came into effect in July 2016 and carry both civil and criminal sanctions.

This course is relevant for in-house lawyers and private practice lawyers alike and bankers involved in structured finance, from the documentation teams, structurers, sales teams to compliance personnel monitoring such transactions as well as accountants who advise clients on structured finance transactions. This course will also be of relevance to asset managers, portfolio managers, hedge funds and investors such as wealth funds, pension’s funds, insurance companies looking to invest or be involved in structured products and securitisation.

The course sets the scene by giving you an introduction to Structured Products, the various types of transactions, the eligibility criteria and the role of the Portfolio Manager. The impact of the credit crisis on structured products is briefly discussed before moving on to the different types of Structured Products in detail.

We go through the different types of securitisation structures in the market and cover the pertinent issues to consider when undertaking due diligence of the underlying assets. We further cover the risk factors that are typically disclosed to investors and various regulatory considerations.

We undertake a detailed analysis of the multitude of key issues and features involved in and the variety of structures in Structured Products transactions. We cover CDOs, CLOs, CBOs, CLNs, CDSs, and CPPI transactions. We go through ABCP Conduit Programmes and repackaging programmes and transactions. We cover key legal issues, regulatory issues, documentation issues and timelines. We also touch on the various types of Structured Equity Derivatives Products, fund linked products and hybrid products.

An overview of the EU and US regulatory framework within which UK securitisations and Structured Products operate and a summary of the latest reforms of interest to structured finance lawyers is covered. We then focus on EU and US reforms having a direct impact on securitisation, CDO and CLO transactions including the ringfencing regime. We cover the risk retention requirements, credit ratings reforms and industry-led initiatives promoting transparency and disclosure.

Trained as a lawyer, the trainer has over 19 years experience in international banking and structured finance transactions, including real estate finance, loans, leverage finance, debt capital markets, securitisation, structured products, repos, derivatives and financial regulatory and compliance.

She has been actively involved in the creation of innovative award winning structured transactions and negotiating complex financings. She has advised global institutions such as Credit Suisse, Citigroup and Goldman Sachs and spent many years practicing law at Allen & Overy LLP, Linklaters and Sidley Austin Brown & Wood in multiple jurisdictions including London, New York, Hong Kong, Singapore etc.

She holds a Law LLB (Hons) degree from University College London and has worked in the Finance Know-how team at Clifford Chance. She is an author and now runs her own business advisory, training and legal consultancy.


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Course Content

Introduction: Structured Products ■ Static Transactions ■ Revolving Transactions ■ Managed Transactions ■ Eligibility Criteria ■ The Role of a Portfolio Manager

• Standard of care• Recent case law: UBS AG (London

Branch) and another v Kommunale Was-serwerke Leipzig Gmbh; UBS Ltd v Depfa Bank plc; UBS AG (London Branch) v Landesbank Baden-Wurttemberg [2014] EWHC 3615 (Comm), [2014] All ER (D) 47 (Nov)

• The Removal of a Portfolio Manager ■ Cash vs Synthetic ■ Balance Sheet vs Arbitrage ■ Impact of the Credit Crisis

CDOs, CLOs and CBOs ■ Types of Portfolio ■ Structure and Key Features

• Static Cash CDO• Managed Arbitrage Cash CDO• Managed Arbitrage Synthetic CDO• Balance Sheet Synthetic CDO

■ Core Concepts • Overcollateralisation Tests• Interest Coverage Tests• When Tests Are Applied• Consequences of Breach• Priority of Payments of Notes – OC Tests

■ The CDO Timeline• Managed CDO Timeline• Warehousing Period• Ramp Up Period• Reinvestment Period• Amortisation Period

■ Capital Structure ■ Key Legal Issues

• Control of changes and waivers• Events of default/enforcement• Prospectus liability• Selection of Portfolio Manager

Asset backed Commercial Paper (ABCP) Conduit Programmes and SIVs ■ Structure of ABCP Conduit ■ Types of guarantees ■ Structure of SIVs ■ Key Features and Differences between SIVs

and ABCP conduits ■ Differences between SIV vs CDO

Credit Linked Notes (CLNs) ■ Key Features and Structure ■ Types of CLNs

• Single name• Linear Basket• Nth to Default Basket• Index Linked• Zero Coupon• Self Referencing

■ Key issues to consider in documentation ■ What happens on Credit Events

• Physical Settlement• Cash Settlement• Auction Settlement

■ EMIR Requirements for Clearing

Credit Default Swaps (CDSs) ■ Structure and Key Features ■ Benefits ■ Types:

• CDS on ABS• Basket CDS

■ Portfolio CDS ■ Nth to Default CDS

• Loan only CDS (LCDS) ■ Documentation

Constant Proportion Portfolio Insurance (CPPI) Transactions ■ Structure and Key Features

• Rebalancing• Static• Managed• Gap Risk• Cash out Event

■ Example ■ The Benefits ■ The Documentation

Structured Equity Derivatives Products ■ Equity Linked Notes

• Yield Enhancement • Principal Protected Structure

■ Equity Linked Deposits• Equity swaps and options combined• Example

■ Hedge Funds ■ Fund of funds ■ Fund Linked Notes ■ Convertible Bond Arbitrage – Credit Default

and Equity swaps combined

Repack Programmes ■ Basic Structure and Key Features ■ Benefits ■ Documentation

Securitisation & Structured Products: Upcoming Regulatory Change





Securitisation & Structured Products: Upcoming Regulatory ChangeContinued...

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Course Overview

■ Repackaging ABS for ECB repo eligibility

ORAL EXERCISE: Example scenarios relating to the Market Abuse Regulation (“MAR”) which aim to prevent abuse of inside information and carry both civil and criminal sanctions

EU & US Regulatory Issues and Upcoming Regulatory Changes ■ The Regulatory Bodies ■ Regulations relevant to Structured Products

involving Securities ■ Regulations relevant to Structured Products

involving Swaps ■ Other Regulations relevant to Structured

Products• MiFID II and MiFIR• PRIIPs• UCITs

■ Regulations relevant to Securitisations• The Basel II Framework• The EU Capital Requirements Regulation

(CRR)• Basel III and CRD IV• The Application of the Ringfencing Regime –

Part 9B FSMA 2000 ■ US Regulations

• Dodd-Frank Act ■ Derivatives in Structured Products ■ Risk Retention Requirements ■ Disclosure for Rating Agencies on ABS Prod-

ucts• The Volcker Rule• Foreign Account Tax Compliance Act (FAT-

CA)• US Securities Act of 1933

■ Rule 144A ■ Regulation S




Securitisation: The Structures, Legal Analysis and Documentation

Date: 25 Sep 2018 Location: London Standard Price: £625+VAT

Membership Price: £500 + VAT BOOK NOW

Course Overview

This Securitisation course is designed to provide an extensive coverage of the important aspects of securitisation, the popular structures in the market, the legal opinions analysis and documentation.

This course is relevant for in-house lawyers and private practice lawyers alike and bankers involved in structured finance, from the documentation teams, structurers, sales teams to compliance personnel monitoring such transactions as well as accountants who advise clients on securitisation or structured finance transactions. This course will also be of relevance to asset managers, portfolio managers, hedge funds and investors such as wealth funds, pension’s funds, insurance companies looking to invest or be involved in structured finance and securitisation.

The course sets the scene by giving an overview of securitisation. The reason why securitisation is frequently referred to as ‘rocket science’ is due to the number of areas of law that are involved and the interplay of the various different types of regulations and case law. It is one of the most document intensive transaction amongst all the structured finance transactions and involves dealing with a multitude of issues simultaneously in order to bring the deal to a close.

We go through the different types of securitisation structures in the market and cover the pertinent issues to consider when undertaking due diligence of the underlying assets. We further cover the risk factors that are typically disclosed to investors and various regulatory considerations.

We then undertake an analysis of the security package, the priority of payments (waterfalls) and enforcement options on event of default. We cover off issues relating to enforcement and restructuring securitisation transactions.

Additionally we will cover off the key documents in a typical securitisation transaction with coverage of the closing mechanics, payments flows, ancillary letters, conditions precedent, stock exchange listing and the crucial searches to be undertaken on closing. We will go through the legal opinions that require to be delivered and what each legal opinion should cover.

Regulatory issues and the upcoming regulatory changes affecting this area along with an analysis of the key features and structure of the various Structured Products are covered on the course titled: “Structured Products & Upcoming Regulatory Changes”.

Participants will: ■ Be introduced to the basics of securitisation, including its definition, the special purpose vehicle,

the credit rating process and profit extraction. ■ Get an overview of the different types of securitisation ■ Have explained to them the underlying assets due diligence ■ Master the risk factors including the risk profile of the asset pool and regulatory considerations. ■ Gain an understanding of the security & priority of payments. ■ Learn about the key documents including the asset sale and purchase agreements, the deed of

charge and the cash management agreement. ■ Be appraised of the securitisation litigation cases.

Course Objectives

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Course Content

Introduction: Securitisation Overview ■ Definition – What is securitisation? ■ Relevant Areas of Law Involved ■ Basic “True Sale” Structure ■ Special Purpose Vehicle (SPV)

• Bankruptcy Remoteness• Permitted Activities• Limited Recourse

ӹPECOH – Post Enforcement Call Options Holder ӹThe Taxation of Securitisation Companies Regulations 2006 (SI 2006/3296) ӹCase law: ARM Asset Backed Securities S.A. (2013) EWHC 3351 (Ch)

• Non-Petition• Orphan Trust Structure• Accounting Treatment of SPV• Offshore SPV Jurisdictions

■ Key Parties Involved ■ Benefits of Securitisation

• For Originator• For Investors

■ Tranching, Subordination & Payment Water-fall

■ Credit Rating Process ■ Credit and Liquidity Enhancements

• Overcollateralisation• Subordinated Tranches• Subordinated Loan• Retained Spread• Liquidity Facilities• Insurance

■ Liquidity Support ■ Hedging ■ Servicing ■ Profit Extraction

Types of Securitisation ■ True Sale ■ Synthetic ■ Whole Business ■ Trade Receivables ■ Residential Mortgage Backed Securitisation

(RMBS) ■ Commercial Mortgage Backed Securitisation

(CMBS) ■ Master Trusts

• Concept of Bare Trust• Waterfalls• Drawdowns

■ Covered Bonds• Structure• Regulations

Underlying Assets Due Diligence ■ US Securities Act of 1933 Requirements

• Regulation S Offerings (Reg S)• Regulation 144A Offerings (144A)• US 10b-5 Legal Opinions

■ Assignability of Assets• Novation• Assignment

ӹContract that is Silent re: Assignability ӹLegal Assignment• Notice of Assignment• s136 Law of Property Act 1925 Require-

ment• Case law: Van Lynn Development Limit-

ed v Pelias Construction Co. (1969) 1 QB 607

ӹEquitable Assignment Risks ӹRisk Mitigation• Trustee’s Power of Attorney• Warranties• Restrictive Covenants• Charge & Control over Receivables Ac-

count ■ Assignability of Foreign Assets

• Declaration of Trust ■ Re TurcanDon King Productions Inc. v Warren ■ Barbados Trust Company Limited v Bank of

Zambia• Small Business, Enterprise and Employ-

ment Act 2015 (SBEEA)• Sub-participation• Synthetic Structures

■ Validity & Enforceability• Consumer Credit Act 1974 and 2006 (CCA)• Unfair Contract Terms Act 1977 (UTCA)• Unfair Terms in Consumer Contracts Regu-

lations 1999, SI 1994/3159 (UTCCR) • Regulated Contract Example: Residential

Mortgage Loan ■ Confidentiality Restrictions ■ Asset Representations

Risk Factors ■ Disclosure Requirements & Market Standard ■ Risk Profile of Asset Pool

• Legal/Structuring Risk• Credit Risk• Rate Risk• Currency Risk• Political Risk

■ Regulatory Considerations

Security & Priority of Payments ■ The Security Package ■ The Secured Creditors ■ Priorities of Payment – Waterfalls ■ Events of Default ■ Enforcement Methods


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Course Content

■ Problems with Enforcement

The Key Documents ■ Prospectus or Base Prospectus (for Pro-

grammes) ■ The Asset Sale and Purchase Agreement ■ The Servicing Agreement ■ The Deed of Charge ■ The Cash Management Agreement ■ The Swap Agreements ■ Subscription Agreement ■ Note Trust Deed ■ Liquidity Facility Agreement ■ Legal Opinions

• What should be covered• Tax Opinion• Foreign Legal Opinions


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Structured Trade and Commodity FinanceDate: 24-25 Sep 2018

Location: London Standard Price: £1,050+ VAT Membership Price: £840 + VAT

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Course Objectives

Participants will:

■ Be introduced to what is meant by structured trade and commodity finance ■ Learn about the markets, the softs, oils & gas and LME ■ Explore the grain, mean and tropical markets alongside new participants in those markets ■ Get to grips with emerging markets and the risks alongside how strucutred approaches assist and

what a “good” collateral is ■ Expand knowledge on pre-finance and the risks relating to grower/producer finance ■ Gain an understaind of the green clause and red clause credits ■ Master the key documentation as a risk mitigant ■ Learn about financing commodities, structures and risk management ■ Analyse warehousing and asset backed structures, warehouse receipts and WRF structues ■ Explore the collateral management and different types of insurance ■ Review mining, oil and gas finance alongside liquified natural gas.

Commodity markets have seen unprecedented price fluctuations in recent times making the sector much more challenging. The course will attempt to deal with these challenges but ultimately the whole sector remains inherently more risky than it was.Trade Finance remains the engine at the heart of global economic growth with China still probably the most important participant. Commodity Finance sits at the heart of this trade dominated by oil and gas which according to some estimates, accounts for as much as 70% of all commodity trade.

The impact of both Brexit and The Trump presidency are very hard to predict and both the short and medium term outlooks remain uncertain which is not helpful. Most markets are “holding their breath”. Similarly we have just seen the latest “agreement” by OPEC and others (primarily driven by Saudi Arabia) to restrict production and hopefully boost oil prices. Early signs show it is working but will it last?

Structured Trade and Commodity finance can mean many things and many banks will have their own particular definition. Generally speaking it is an activity dedicated to the financing of high-value supply chains. Every loan is tailor-made to client, transaction and region. They tend to be more long-term – sometimes up to five years.

Structured trade finance usually refers to the financing of cross-border commodity flows (and as such is most commonly known as structured commodity finance).

Structured commodity finance encompasses several different methods of finance for producers and traders of goods and commodities, including:Trading in commodities often involves dynamic and fast-moving commodity markets, often with counterparties in emerging market territories. Risk mitigation and the ability to swiftly devise structures to make available financing of transactions are keys to success.

Whilst ongoing innovations and technological developments make the market more transparent this can be a high risk area for the uninitiated or unprepared. As a commodity banker, trader or even a producer, a flexible and creative approach, balanced by an appropriate degree of caution, will minimise risks.

This course will highlight the key concepts involved in commodity trading with elements drawn from real situations. It will also cover liquidity issues and lightly traded commodities.

Course Overview


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Structured Trade & Commodity FinanceContinued

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Course Content

Introduction ■ What do we mean by structured trade ■ What is commodity finance ■ Categories of Commodities ■ Commodity Pricing – Volatility ■ The exchanges and their influence ■ The rise of techniques to manage risk ■ Participants ■ Current Trends

The Markets ■ The softs. ■ Oil & Gas ■ LME ■ The grain markets - the meat markets and

the tropical markets in coffee , cocoa, sugar, etc

■ Biofuels.- Ethanol ■ New participants in the market ■ Over / under supply ■ Traditional hedging techniques ■ The availability of data and access to the

markets ■ The concept of price insurance ■ Electronic platforms. ■ The rise of the indexes ■ Exchange Traded Funds

Emerging Markets ■ The risks ■ Political & Economic Risks and mitigants ■ Performance and operational risk and miti-

gants ■ Credit & Bank risks and mitigants ■ Price Risk ■ IForged, fraudulent or illegal contracts ■ Documents of title ■ Markets & Players ■ Risk analysis of a commodity transaction ■ How structured approaches assist ■ What is “good” collateral

Pre-Finance ■ The risks relating to grower/producer fi-

nance ■ Green Clause Credits ■ Red Clause Credits ■ Ownership issues ■ Licenses, export quotas, foreign currency

controls ■ Problems with non delivery ■ SBLC’s ■ Prefinance versus prepayment ■ Limited Recourse v unlimited recourse

Key Documentation as a Risk Mitigant ■ Transport documents ■ MMTD & BoL’s ■ Documents representing goods ■ Title, negotiability, endorsement ■ Incoterms

■ Charter-party contracts and contracts of af-freightment

■ Voyage time and trip transfers ■ Shipper/charterer and vessel owner obliga-

tions ■ Loading & discharge of cargo

Financing Commodities ■ Commodity contracts ■ Risk analysis of commodity flows ■ Risk analysis of key parties ■ The importance of document control – “follow

the doggy!” ■ Logistics & the value chain

Structures ■ Pre-export finance ■ L/C, SBLC and other structures ■ Tolling ■ Inventory finance & CMA’s ■ Asset backed finance ■ Countertrade structures

Risk Management ■ Risk mitigation ■ Exchange traded commodities ■ Links between cash & futures markets ■ Delivery to and from terminal markets ■ Cash flow acceleration ■ Off balance sheet considerations ■ Countertrade structures ■ Problems with MMTD transactions

Warehousing ■ Asset backed structures ■ The business case for warehousing ■ Warehouse receipts ■ WRF structures ■ Raising finance against warehouse backed

securities ■ Problems with pledges over inventory, physi-

cal dispossession ■ Legal requirements ■ Fraud, misrepresentation and similar issues ■ WH receipts – a document of title, or just a

receipt ■ Risk mitigation

Collateral Management ■ Liability of collateral managers ■ Collateral Management Agreement (CMA) ■ Negotiating CMA documents ■ Reviewing components of the CMA ■ Tolling finance ■ Performance and country risks ■ Non-delivery issues/problems ■ Financiers priorities ■ Insurance solutions

Insurance ■ Marine insurance





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Course Overview


Structured Trade & Commodity FinanceContinued

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Course Content

■ ICC/A/B/C contingency cover ■ Security – assignment v loss payee ■ Political and country risk ■ Contract frustration ■ Asset confiscation ■ Credit insurance ■ Legal problems ■ Breach of warranty ■ Failure to act appropriately to mitigate in-

sured losses (acting as if uninsured)

Price Risks ■ Chinese influence ■ Price risk management ■ Price discovery exchange ■ Traded versus OTC ■ Cash and futures markets ■ Contracts to hedge ■ Bank v customer requirements/benefits

Mining Finance ■ Concept of the business ■ The cost to bring to market semi-finished

material ■ Inhospitable locations ■ Financing new mines ■ The lead/lag time for production ■ Technical developments and reworking older

mines ■ The issue of current and future price projec-

tions ■ Trading issues, hedging ■ Borrowing and Lending

Oil & Gas Finance ■ The energy complexes ■ Crude oil market ■ Buying oil on Wall Street ■ The role of the .majors ■ The supply demand equation ■ State intervention ■ The exploration and extraction of oil ■ Trading in crude oil. ■ Heating oil and gasoline ■ Gas market

LNG – Liquified Natural Gas ■ The energy complexes ■ The growth of the LNG debt market ■ LNG liquefaction finance: ■ LNG regas finance ■ LNG ship finance ■ Recent trends:

• Financing of integrated LNG chains• Changing downstream markets and trading

patterns• Increasing flexibility in LNG sales and fi-

nancing contracts






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Course Content

The Advanced Trade Finance CourseDate: 14-15 Nov 2018

Location: London Standard Price: £1,050+VATMembership: £840 + VAT

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Course Overview

Day One:The Current Market Place ■ Recent evolution and current develop-

ments ■ The challenge of emerging markets ■ The challenge of China ■ Brexit ■ President Trump ■ New products ■ The traditional three bands of clients:

Global and Large Corporate, MME’s, the rest!

■ Understanding trade finance at a funda-mental level.’

■ Typical users of Trade Finance products and services

Financial Crime Compliance & Sanctions ■ Understanding the risk based approach ■ Impact on Trade Finance ■ TI, CPI and its impact ■ FATF ■ DDD and the need to obtain a clear line

of sight across the value chain ■ Money laundering methodologies ■ Ghost payments and variations

Trade Finance has been “re-discovered” yet remains a little mysterious. It is a product that has always generated strong revenues- often non funds based – and traditionally has exceptionally low credit losses (on a portfolio basis). Most global banks are able to apply very low probability of default ratios and usually lose as much to fraud as to actual credit losses.

The major general challenge to trade finance in recent times has been the impact of Financial Crime Compliance and Sanctions. Whilst credit losses and hence credit risk is low, FCC risk is very high because of the increasing tendency for global trade to pass through more than one country, use different modes of transport, use different currencies and transit through some regions where money laundering controls are not as strong as in others. This makes the audit trail very challenging. This is not a course about FCC but as trade finance is reckoned to be the main driver for money laundering, it needs to be understood.

To compound matters, many global banks have reduced their correspondent banking networks by up to two thirds – often based on the Transparency International CPI. This means it is becoming increasingly likely that more than two banks are involved in a transaction, causing delays in processing and frustration for the client. Sight LC’s can take 10-15 working days to be processed when there are two to three advising banks. Of course this has created opportunities for confirmation activities – provided FCC clearance is obtained.

Another challenge of trade finance is the tendency for banks to re-invent the wheel by using impressive sounding and not always easy to define marketing names to describe “new” products which are not actually new. “Buyer centric supply chain solution” actually is the sexier name for reverse factoring.

This practical two day advanced level course will concentrate on what is happening in the market right now leaving delegates with a clear and working knowledge of how trade finance is undertaken in the real world, what actually happens and what are the implications for all parties concerned.

A good working knowledge and familiarity with International Trade finance is required to derive the maximum benefit from this course.

■ Under/over invoicing and variations ■ Documentary fraud ■ PEPS ■ Sanctions ■ Risk mitigation, management and trans-

fer

Case Study/Exercise

Traditional Risks – The Critical Issues ■ Understanding, identifying and manag-

ing risk ■ Credit risk, Market risk & Operational

risk ■ Sovereign, Political / Country risk ■ Institutional risk / Bank risk ■ Corporate and other critical risks ■ Importer and Exporter’s risk ■ Other risks in the transaction and how to

mitigate them (transport risk, warehous-ing, force majeure, etc.)

■ Risk mitigation, management and trans-fer

Case Study/Exercise


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The Advanced Trade Finance CourseContinued

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Course Content

Review of Key Products ■ How does the customer analyse his risk? ■ Which products does he use and why? ■ Payment in Advance ■ Open Account ■ Collections – Outward & Inward / Clean

& Documentary ■ Letters of Credit (covered in more detail

below) ■ Risks and opportunities ■ Control possibilities

Case Study/Exercise Supply Chain Management & Finance ■ The origins of SCM and what does it

mean in practice ■ Understanding the issues in SCM – “the

tug of war” between supplier & buyer ■ Bringing about a “balance” between par-

ties for effective processing ■ Understanding about movement of ‘in-

formation’ ,’goods’ and ‘cash’ ■ Supply Chain Finance Main SCF models:

accounts payable - centric, accounts receivable, BPO

■ Review the risk aspects of SCF Case Study/Exercise

Letters of Credit (L/Cs) ■ Traditional L/C’s ■ The four contract concept ■ Confirmations ■ Red Clause ■ Green clause ■ Revolving L/Cs ■ Evergreen ■ Transferable L/Cs ■ Back to Back L/C structures

Case Study/Exercise

Standby Letters of Credit ■ History and origin ■ The dominant trade finance product ■ Uses ■ Risk management ■ Issue and assessment ■ Pricing ■ Understanding the applicability of ISP98

and UCP 600 for standbys ■ Fraud and unfair calling

Case Study/Exercise

Export Finance issues ■ Looking at the big picture ■ Understanding the purpose of borrowing ■ Country risk issues ■ The reality of title and control

■ Negotiation under letters of credit ■ Discounting of deferred payment L/C,

acceptance credits (with or without re-course)

Case Study/Exercise

Controlling Credit Exposure – Formulating a Limit ■ Understanding and explaining the trade

cycle ■ The use of time lines ■ Assessing and appreciating funding gaps

Case Study/Exercise

Day Two:

Structuring Finance for the Trader ■ Analysing the trade flows ■ Assessing facility size and structure ■ Specific lending with identifiable maturity

dates ■ Appreciating and controlling sources of

repaymentCase Study/Exercise

Effective Use of Collections for Short-Term Finance ■ Using collections as financing opportuni-

ties ■ Identifying and mitigating risks ■ Maintaining control

Supporting the Trader ■ Using the goods as collateral ■ Assessing the value of goods ■ The value of pledges and trust receipts ■ The need for structured lending

Case Study/Exercise

Warehousing of Goods ■ Warehouse location ■ Management assessment ■ Legal frameworks ■ Obtaining and retaining title and control ■ Risks and responsibilities of Collateral

Managers ■ Cost versus control

Case Study/Exercise

International Demand and Contract Guarantees / Bonds Scope and Application – an introduction (suretyship v.

demand guarantee)Indemnities versus guaranteesDifferent types - Bid, Performance, Advance payment,

Warranty and Retention bondsRules governing guarantees and bondsLegal jurisdiction and expiry date issuesValue of using URDG 758 – ICC Rules for demand guar-

antees





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The Advanced Trade Finance CourseContinued

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Course Content

Impact of non-bank competitors – COFACE, Euler Hermes

Case Study/Exercise

Receivables Financing ■ Mechanics of Factoring and Invoice Dis-

counting ■ Forfaiting – an important adjunct to the

TF mechanism ■ Role of Credit Insurance ■ Mechanics of Securitisation ■ FCC risks

Case Study/Exercise

The Commodity Sector and its Players ■ History and origins of the commodity in-

dustry ■ Understanding the nature of ’commodi-

ties’ ■ Analysing the players – growers / produc-

ers; traders and end-users ■ Financing of commodities ■ Looking beyond the balance sheet ■ Available documentation – taking and

retaining title ■ Commodity futures, options and deriva-

tives ■ Hedging – a critical process in commodity

finance ■ Role and function of the exchanges ■ Main risks in the commodity trade (mar-

ket, fraudulent practices, legal issues, recent legal cases)

Countertrade

■ Overview – when to use ■ Pitfalls and complications ■ Possible structures and Time manage-

ment Syndications ■ When to syndicate ■ Lead or participant role ■ The completion from capital markets –

high yield bonds ■ Selling down exposure ■ Impact of quasi-governmental agencies ■ Risk/reward analysis

Case Study/Exercise

Course Conclusion and Review / Feedback






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Fundamentals of International Trade FinanceDate: 16 May 2018, 13 Nov 2018

Location: London Standard Price: £625 + VATMembership: £500 + VAT

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Course Objectives

This 1-day course which will assist participants to identify customer needs and recommend appropriate product solutions, as well as assess various risks to both bank and customer in international trade transactions.

Through the use of trainer led sessions and the use of case studies they will be able to explain and identify ways of mitigating the underlying risks associated with trade finance transactions and carry out the processes involved in documentary collections, documentary letters of credit and guarantees.

The purpose and application of the various International Chamber of Commerce (ICC) rules and practices used in international trade will be covered.

Participants will have an introduction to core trade finance products.

The course is highly interactive and centres around the use of a variety of case studies, predominantly based on actual files and ICC opinions.

This is a foundation level course which can be supplemented by our Advanced Trade Finance, Letters of Credit and Trade Based Money Laundering & Sanctions courses.

The trainer is a leading trade finance practitioner and trainer with almost 40 years banking experience. Prior to taking early retirement, he was responsible for the risk management of the UK trade book for a top international bank, with whom he had spent his whole banking career as a Relationship Manager, Credit Risk Approver, Trade Finance Manager and latterly their Trade Portfolio Risk Manager.

He has provided training to banks globally on trade and receivables finance, risk mitigation, AML and sanctions compliance, is ACIB qualified and has completed the ICA Certificate in Trade Based Financial Crime Compliance issued by the University of Manchester Business School.

Background of the Trainer

Introductions ■ Trainer & participants ■ What do you know? ■ Aims and objectives. ■ Course context.

What is Trade Finance? ■ Benefits of trade finance to businesses

and banks ■ Introduction to the trade cycle ■ Incoterms 2010

• Summary of terms• The advantages/disadvantages to Im-

porter/Exporter in the use of Incoterms 2010

• Principal methods of settlement ■ General Risk Considerations

• Trade finance products vs open account• Financial Crime Compliance - AML, CFT

and Sanctions• Know Your Customer (KYC) and Cus-

tomer Due Diligence (CDD)• Correspondent Bank risk• Counterparty risk• Credit risk

Course Content


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Fundamentals of International Trade FinanceContinued

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Course Content

Case Study: Short exercise to check understanding of Incoterms application.

Key characteristics of Commercial Documents used in international trade ■ Invoices (commercial, tax, customs, con-

sular, pro-forma invoice) ■ Marine/Ocean Bills of Lading

• Title, transfer • Control of goods (transferable B/L v.

straight consigneed)• Delivery considerations

■ Other forms of transport document• Multimodal Transport Document• Air Transport Document • Road, Rail or Inland Waterway Trans-

port Documents• Non-negotiable bills of lading

■ Insurance Policy/Certificate ■ Other certificates (Certificate of Origin,

Inspection Certificate, Phytosanitary, etc) ■ Bills of exchange

Exercise - using examples of commercial documents to help participants to understand their technical content, the significance and importance of particular documents.

Core Trade Products ■ Import / Export Documentary Collections ■ Letters of Credit ■ Guarantees

Import / Export Documentary Collections ■ Principal parties (buyer, seller, presenting

bank, remitting / collecting bank) ■ Benefits to importers and exporters of

Documentary Collections ■ Relationship between principal and banks ■ Role of banks (incl. correspondent banks /

agency arrangements) ■ Legal and practical issues re the duties of

the banks involved in handling collections ■ Conditions for release of documents ■ Areas of risk:

• Usance collections• Partial payments • Avalisation (so rare would exclude) • Release of goods on trust

■ Procedures for Protest of Bill of Exchange (B/E) and underlying risks

■ Complexities of the ICC Uniform Rules for Collection (URC 522)

Case Studies

a) to consider the needs of an exporter or importer and suitability of using Documentary Collection in a cross-border transaction and / orb) to check understanding of the collections procedure and the practical application of the URC 522

Documentary Letters of Credit ■ Principal parties (buyer, seller, issuing

bank, advising bank, confirming bank) ■ Benefits to importers and exporters of

Documentary Letters of Credit ■ Relationship between buyer, seller and

banks ■ Advantages / disadvantages of letters of

credit ■ Risk factors re issuing letters of credit ■ The autonomy of letter of credit operations

(Independence Principle) ■ Importance of the application form (legal

issues) ■ Instructions to issue/amend credits ■ Workability of the credit ■ Jurisdiction

Introduction to the International Chamber of Commerce UCP 600 Rules: ■ Structure and obligations under letter of

credit; ■ Availability of credits, expiry date and

place for presentation ■ Availability by payment, deferred payment,

acceptance, deferred payment standard for examination of documents; dealing with discrepant documents, waiver and notice of refusal;

Examination of documents ■ Key elements of the main articles of UCP

600 ■ The standard for examination of docu-

ments: “no conflict” rule – article 14 ■ Processing non-compliant documents as

Nominated/Confirming Bank ■ Processing non-compliant documents as

Issuing Bank ■ Risks arising from non-adherence to UCP

600 ■ Legal cases and ICC Banking Commission

opinions ■ DOCDEX – dispute settlement mechanism

of ICC for trade finance ■ Analysing irregularities in documents

International Standard Banking Practice ISBP 745 (2013 Rev)





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Fundamentals of International Trade FinanceContinued

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Course Content

■ What constitutes an “alteration” or “ad-dition” to a document, when and how should these be authenticated?

■ How should documents be signed, if this is not explicitly stated in the credit?

■ How should one handle typing errors on documents regarding the name and ad-dress, different addresses of same compa-ny, etc.?

Advising, confirming, reimbursing credits ■ Obligations and Risks associated with the

Advising Bank, Nominated Bank, Confirm-ing Bank

■ The use of the Bill of Exchange in Letters of Credit

■ Application of the Uniform Rules for Bank-to-Bank Reimbursement ICC 725

■ Assignment of procceds

Case Studies a) to consider the needs of an exporter or importer and suitability of using a Letter of Credit in a cross-border transaction and / or

b) to check understanding of the collections procedure and the practical application of the UCP600

Other forms of Letter or CreditA review of the purpose, procedure and risks associated with: ■ Irrevocable / revocable ■ Usance credits ■ Transferable Credits ■ Back-to-Back Credits ■ Red and Green Clause Credits ■ Revolving / Reinstatement Credits ■ Standby Credits ■ Synthetic Credits

Guarantees ■ Types of guarantees:

• Tender/bid bonds • Advance payment guarantees • Performance bonds • Retention money guarantees • Warranty Guarantees (Maintenance

guarantees)• Bail bonds • Payment guarantees • Indemnities/counter guarantees

■ Risk Assessment (including risk weighting) ■ Wording of Guarantees ■ Demand under guarantees: issues

■ Extend or Pay demands ■ Expiry and Cancellation Uniform Rules for

Demand Guarantees 758: main principles, URDG 758 guarantee sample wording, sample clauses

Case Study to review guarantees which caused a loss to the bank. Discuss the practical application of URDG 758 and potential for use in local banking practice and legal jurisdictions.

Financial Crime Compliance ■ Consituent parts (money laundering, ter-

rorist financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compli-

ance risk in cross border transactions ■ Why are international trade transactions

increasingly a target for abuse? ■ The consequences of non-compliance (for

banks, corporates and individuals) ■ Risk assessment from FCC perspective

Case Study: Participants work in groups to consider the needs of various SMEs and to identify the appropriate product solution. ■ ■ Summary of day’s learning ■ Opportunity to refresh clarify key points,

clarify ■ Review main learning points.





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Structuring & Negotiating Mezzanine, PIK, Second Lien And Unitranche

Date: 10 Jul 2018, 27 Nov 2018 Location: London Standard Price: £725 + VAT

Membership Price: £580 + VAT BOOK NOW

Course Overview

Credit markets continue to provide copious amounts of liquidity across the funding spectrum from senior debt through second lien, mezzanine and PIK-style instruments driven by traditional funding sources and a significant increase in capital formation from alternative lenders. Although unitranche continues to comprise the most popular offering from alternative lenders, these funds adopt an eclectic approach to credit and are willing to provide established junior products such as mezzanine and PIK either in conjunction with senior debt or to complement their unitranche offering.

The Second Lien market experienced a resurrection in July 2014 (after a nascent period post 2007) but, according to S&P, is expected to experience a renaissance in 2017, for a number of reasons. The appeal to borrowers is first, the ability to increase leverage from 2L to fund higher purchase price multiples; second, reduced public disclosure and need for credit ratings; third, lower pricing than senior/ mezzanine structures and finally, is easier to restructure in distress than high yield bonds. Lenders are keen to take the product as it provides higher margins than senior debt, includes some level of call protection, provides additional investment opportunities (given the relative dearth of senior paper) and is structured differently to first generation deals, so providing greater protection in distress.

Mezzanine continues to face pressure from other cheaper products (2L in larger deals and unitranche in smaller deals), Despite this, global mezzanine funds have raised very large amounts of capital over the last year (GSO, Highbridge, Prudential and Crescent together raised nearly $20 billion). Competition from competing forms of capital means it is less likely these funds will be deployed in entirely conventional structures so these lenders have had to evolve new strategies to deploy their funds although there remains demand for the traditional senior / mezzanine structure. Despite the decline in mezzanine issuance, mezzanine continues to exert a strong influence on other junior debt products as many direct lenders had their roots in mezzanine and have been willing to apply the practices in that market to direct lending (e.g. the use of PIK and warrants)

PIK itself continues to find a place in the sun for a wide range of purposes including LBOs and the €3.6 billion Schaeffler multi-tranche PIK in late 2016 (up-scaled from €2.5 billion) evidenced strong demand for that product notwithstanding the miserly pricing (275bps on the 5 year Euro). Many of these deals now tend to be issued in note, rather than loan, form. In current market conditions, PIK is expected to remain popular as lenders chase returns up the risk/reward curve.

European direct lending funds reportedly have c $17 billion of capital to deploy. Unitranche continues to be the most dynamic product in that market however the offering has splintered from the original-classical structures to more structured bespoke products embracing a wider range of more complex structures including dual unitranche, first-in/ first-out. Banks, unwilling to be left on the sidelines, have also proved willing to fund both the bank-led facilities as well as some of the unitranche itself. The recent £475 million unitranche financing Bridgepoint’s acquisition of Zenith illustrates that direct lending can compete with head-on high yield bonds whilst the recent redemption of Soho Houses’ high yield bonds, with a £275 million unitranche, reinforces that notion. The large amounts of dry powder available to funds coupled with stiff competition from the traditional senior/junior loans has compressed pricing so lenders have had to find innovative/alternative ways of deploying their funds. Despite this, the recent ECB leverage guidance is expected to hamper banks and boost direct lending in general.

Whilst junior debt offers attractive returns, this is not without risk and the lesson from the credit crisis is that these providers invariably ended up receiving little or nothing in distress (e.g. Imo Carwash, Stabilus). Against this background, junior lenders have sought ways to mitigate these risks and have been assisted by an updated LMA Intercreditor (2012). However, many, more sophisticated providers have sought other ways to improve their position, for example through the appointment of their own Facility and even Security Agents, although this is not without controversy.

This programme examines the range of junior debt loan products available in the market, their use and application, the typical terms and conditions, market pricing and returns. The program also considers the various techniques junior lenders can adopt to structure their credit ab initio (via Intercreditor issues), how they can monitor their credit thereafter (and have advanced warning of impending distress) and finally how they can maximise recovery in distress. The course is highly practical and interactive and will include case studies which will first, require participants to devise appropriate junior debt structures and second, to consider the various Intercreditor and other matters which can protect their position in distress.

The programme will review the impact of the draft ECB guidance on leveraged transactions.

A model will be provided in advance of the programme and participants will be required to bring a laptop to the course with that model loaded.


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Course Content



Course Content

Introduction to the junior debt spectrum ■ Overview of the market ■ The role of direct lenders ■ Review of the various products

• Mezzanine• PIK, PIYC & Toggles• Second Lien• Unitranche

Structuring parameters – how much senior and how much junior debt ■ Typical approaches to gauging debt capacity

/ capital structure ■ What are the key criteria to consider

• Multiples vs Capital approach • Key ratios (covenants where relevant)

used to right-size the debt ■ How Jurisdiction can affect debt capacity

(and how to mitigate)

Types of Mezzanine: use and key issues ■ Main features of the mezzanine ■ European vs US vs Asian mezzanine ■ Warrantless mezzanine – return structure

• Fixed vs floating rate• Cash pay• PIK• Redemption premia – stepped vs linear

■ Other tools for achieving the target IRR• OID to enhance returns• Using Libor/Euribor floors• Fees• Call protection - hard vs soft call protec-

tion ■ Key issues for warranted mezzanine

• Key issues & pitfalls for warrantless mezz• Dealing with recaps & refinancing• The order of priority vis-a-vis PE loan

notes ■ Other variants of mezzanine

• Senior mezzanine• Junior mezzanine• Hybrid mezzanine

Second Lien ■ Use and application ■ Market trends / recent deals ■ Documenting the 2nd Lien - composite or

separate facility agreement ■ “Typical” terms, leverage, pricing and call

protection ■ Pros and cons of 2L vs unitranche, high yield

bonds ■ Other tools for achieving the target IRR

PIK (PIYC, PIYW, Toggles) ■ Pay-in-Kind (PIK) generally ■ Different types PIK

• PIYW• Toggle • PIYC

■ “Typical” terms, leverage and pricing ■ Call protection - hard vs soft call protection ■ Market trends / recent deals

Unitranche & direct lending products

■ The onward march of direct lenders in Europe • Market trends• Recent developments

■ Where and how its used ■ Review of different “unitranche” structures

• Classic product• Clubbed • Dual tranche • Structured • First out / last out

■ Interaction with bank led finance & impact on bank lenders

■ “Typical” terms & leverage ■ “Typical” pricing

• Cash coupon• PIK• Warrants

■ Other tools for achieving the target IRR ■ Leverage – how much and impact on returns ■ Call protection

• Why it matters to lenders• Hard vs soft call protection

■ Pros & cons vs other types of products• Senior / junior (mezz/2L)• High Yield Bonds

Intercreditor issues & Agreement Among Lenders (“AAL”) ■ Typical inter-creditor issues for junior debt

• Enforcement standstills• Turnover – why and where this matters• Option to purchase - Practical issues

■ Key issues in distress• Information rights• Why going on the Board may not help• Costs in distress• Valuation in distress (q.v. IMO Carwash)• Release of collateral (q.v. European Directo-

ries) ■ The role of the Agents - how and why it mat-

ters in distress• Appointing a separate Facility Agent• Appointing a separate Security Agent – key

issues to consider

Draft ECB Guidance on Leveraged Transactions ■ Which lenders are affected ■ Which deals are affected ■ EBITDA calculation ■ Ramifications for market players

Structuring & Negotiating Mezzanine, PIK, Second Lien And Unitranche


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Regulation & Compliance for UK Financial ServicesDate: 12 Oct 2018


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Course Overview

This introductory/intermediate workshop style course is suitable for both beginners as well as those wishing to hone up or refresh existing skills. The scale of regulation can seem both bewildering and confusing. This one day interactive workshop is designed to explain the process in clear and easy to follow steps. It starts with an overview of UK financial services regulation and compliance. It reviews the central pieces of UK legislation,including important secondary legislation. It also examines how the EU has influenced development, especially regulation & compliance and will continue to do so whilst Brexit discussions remain at what still seems to be a very early stage.

We will also discuss the role of the FCA in detail including the changes introduced by the Senior Managers Regime which is now live in the banking sector and will be extended to all regulated firms by 2019.

There will be an explanation of the workings of the FCA’s Handbook and regulatory processes. We will understand how to use the FCA website to research and analyse areas of the rules and their application in respect of UK regulation and compliance issues. We will also look at several important and topical areas of the regulatory framework and how these are being treated under current regulation & compliance requirements.

Background to UK financial services regulation & compliance ■ Overview - The evolving scope of regulat-

ed activities and the regulator ■ FPC, PRA & FCA – all change on April 1

2013 ■ Role of compliance ■ The handbook - FCA & Rulebook - PRA ■ Types of regulated firms ■ Types of regulation

Core elements of the present regulation and compliance framework ■ The Financial Services and Markets Act

2000 (FSMA) ■ The Financial Services Act 2012 ■ The regulatory structure ■ The role of the Financial Conduct Author-

ity (FCA) ■ The role of the Prudential Regulatory Au-

thority (PRA)

Money Laundering Regulations 2017 ■ Changes ■ General risk assessment ■ Risk mitigation policies ■ Level of due diligence ■ Reliance on third parties ■ PEPs ■ New Criminal Offence ■ Office for Professional Body Anti-Money

Laundering Supervision (OPBAS).

European and international influence on regulation & compliance ■ Brexit ■ The European regulatory structure ■ The implementation and impact of EU Direc-

tives ■ Passporting ■ Significant EU directives ■ Global regulatory influences

Overview of FCA’s Handbook and regulatory and compliance approach ■ High level standards ■ Principles for businesses / The Fundamental

Rules ■ Statements of principle for approved persons ■ Senior management arrangements systems

and controls ■ Training and Competence Sourcebook ■ Business standards ■ Conduct of Business Sourcebook (COBS)

Structure of handbook ■ Topical issues

The Approved Persons Regime ■ Definition of Approved Person ■ FCA procedure ■ Statements of Principle for Approved Persons ■ Code of Practice ■ Approved Persons & the Remuneration Code


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Regulation & Compliance for UK Financial Services

Continued...

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Senior Manager Regime ■ Overview ■ Key changes ■ Risk Maps ■ Accountability Statements ■ Certified Persons ■ Systems & control functions

Financial products – regulation & compliance ■ Accepting customers ■ Financial promotions ■ Advising and selling ■ Product disclosure ■ Dealing and managing ■ Customer reporting ■ Prudential standard ■ Capital Requirements Directives (CRD) –

overview only Client Assets Sourcebook ■ Custody ■ Client money

Redress ■ Dispute resolution (complaints)

Compensation Financial Crime ■ Insider dealing (CJA 1993) ■ Market manipulation (S 89-91 FSA 2012) ■ Market abuse (S 118 FSMA) ■ Market Abuse Directive II / Regulation ■ Money laundering ■ Proceeds of Crime Act 2002 (as amended) ■ Money Laundering Regulations 2007 ■ SYSC rules on financial crime ■ JMLSG guidance

Future ? ■


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Unitranche & Alternative / Direct LendingDate: 19 June 2018, 09 Nov 2018

Location: London Standard Price: £725 +VAT Membership Price: £580 + VAT

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Course Overview

Direct lending in general, and unitranche in particular, continues to make significant inroads across Europe. The offering has received a further boost from the relaxation on direct lending in France, Germany and Italy whilst the ECB guidance on leveraged transactions, which is expected to come into effect mid 2017, will hamper bank lending providing further impetus to direct lenders.

Initially unitranche structures competed mainly with traditional senior/junior structures; however, the ability and willingness of direct lenders to lend increasingly larger amounts means the offering now competes with the high yield bond market as evidenced by the recent £475m unitranche backing Bridgepoint’s acquisition of Zenith. At the smaller end, direct lenders are providing increasingly smaller tranches with Beechbrook’s €7.1m unitranche and equity co-invest indicating that all but the smallest deals are now within reach.

Geographically, direct lending continues its advance inside the three main markets (UK, France and Germany) while Scandanavia, Italy, Spain and Ireland are all seeing strong growth and demand for the product. Unitranche recently appeared on the radar in Asia in the shape of the $480m unitranche backing Carlyle’s bid for Australian based pharma company, iNova, so the product seems set to grow in those markets too.

Unitranche continues to evolve as a highly bespoke product offered in a wide variety of forms including; clubbed, bifurcated, “dual-tranche” and even junior unitranche, all of which seem to beg the question of whether the term ‘unitranche’ adequately describes these various structures. Direct lenders are being forced to develop a wider range of strategies and products in an effort to differentiate their offering from other providers and some are increasingly willing to offer undrawn facilities as part of the financing (q.v. the £50 million undrawn capex line provided by Goldmans as part of unitranche financing for Zenith).

Some funds have elected to ride the risk curve in search of higher yields whilst others have gone back to their roots in the mezz market and are using equity to enhance returns; a few are creating mezz funds through the back door. Traditional bank lenders, initially slow to recognise the challenge from thise new providers, have developed various strategies to partner up with direct lenders and are willing and able to provide the “first out” portion of unitranche.

Documentation continues to adapt to the myriad of structures in the market but liquidity in high yield bond market and the syndicated loan market is also having an impact on terms in the mid-to-larger unitranche-style deals.

The complex nature of these structures means that Intercreditor issues have become a key negotiating area for lenders and borrowers, however, the evolution of US-style clubbed (and syndicated?) deals has introduced a further complication via the introduction of the Agreement Amongst Lenders between the parties in some deals although some practitioners question whether these AALs are necessary.

Last, direct lender’s hurdle rates have prevented them from targetting more traditional, unleverage credits leaving a funding gap in the 400–550 bps space. With this in mind, capital formation is taking place to address this, hitherto, neglected sector of the market although providers are having to find other, traditional ways of meeting their target returns; such as warrants.

On the restructuring front, Unitranche has avoided the landmines so far. However the volume of issuance over the past few years means that defaults have occurred with ICG’s investment in Courtepaille the most high-profile restructuring to date but market chatter suggests other deals are already experiencing distress. The course considers how the market has and will address these issues.

Participants will receive various models (including a professionally designed LBO model which measures debt capacity and exit returns) along with a market report from Debt Explained on trends in the loan market.

The programme will review the impact of the draft ECB guidance on leveraged transactions and its potential impact on direct lending

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Unitranche & Alternative / Direct LendingContinued

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Course Content

Direct Lending – review of lenders and the market ■ Introduction to direct lending & unitranche ■ Overview of the basic unitranche product ■ The direct lending market in Europe – where

does it fit in? ■ Reviw of direct lending fundraising ■ The changing landscape of direct lending

providers ■ Review of market trends and developments

in direct lending ■ Impact of the ECB guidance on leveraged

transactions

Direct lending vs other forms of financing ■ Direct lenders approach to the unitranche

• Are all lenders the same• What do they want• General approach pricing & terms

■ The borrower’s perspective ■ Direct lending vs traditional bank-led finance ■ Unitranche vs Senior / junior structures

(mezz/2L)• Pros and cons

■ Direct lending vs High Yield Bonds ■ Pros and cons ■ Review of Zenith

How are traditional bank lenders respond-ing? ■ Can traditional bank lenders work with funds ■ Banks and direct lenders – creating a symbi-

otic relationship ■ Three ways banks can stuucture their rela-

tionships with direct lenders• Formal JV - pros and cons• Framework agreements - - pros and cons• Ad-hoc - - pros and cons

■ Other stratagies banks can adopt to retain market share

Review of Unitranche and direct lending structures – past, present, future? ■ Overview of direct lending spectrum ■ “Original” Unitranche – the US product ■ European Unitranche - The “classic” struc-

ture ■ “Structured” unitranche

• Review of recent deal structures• Bifurcated unitranche• “Dual” tranche unitranche • Parallel unitranche• “Junior” unitranche• JV structures• Syndicated unitranche

■ Bilateral vs. Clubbed unitranche ■ Unitranche vs Senior+Mezz/2L vs SSHYB ■ Bond structure

• Rationale, use and application in other EU jurisdictions

■ Interaction with the bank-led facilities - RCF, Acquisition, Capex

Facility size and leverage ■ Facility size and application – how small or

large can it go? ■ Leverage ratios

• Is there a typical range?• Comparison with separate senior/junior

facilities - senior/mezz and senior /2L ■ Tenor – what’s market ■ Bullets vs amortising – impact on the deal

Role play: Traditional senior / mezz vs Uni-tranche structure

Margins & Call protection ■ Where’s the market now - current trends ■ Approach to margin ratchets - ■ Other margin protection measure – OID and

floors ■ Structuring the coupon

• Cash vs PIK & Warrants ■ Warrants – which investors want these and

why?• Why these matter to investors• Key issues for lenders (information, rep-

resentation)• Issues for borrowers

■ Hard vs. soft call-protection • Why it matters• “Typical” terms

Terms where unitranche differs from “standard” LMA terms ■ Permitted actions

• M&A• Additional borrowing, security & guaran-

tees• Permitted payments (to equity)

■ Cash sweeps • Approach of the funds• What about the banks

■ Covenants generally• Guarantor coverage

■ Financial maintenance covenants• Standard LMA?• Cov-lite vs cov-loose• Springing covenants• Aggressive borrower-friendly terms -

EBITDA add-backs




Unitranche & Alternative / Direct LendingContinued

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Course Content

Use and application for non-sponsored corporate deals ■ Review of the US market examples ■ European examples – deals we have seen ■ A viable option for corporate deals – what’s

changed ■ Pros and cons of using unitranche in corpo-

rate deals ■ “Typical” use and application for European

corporates

Documentation ■ Overview of the loan structure ■ MA precedents as a point of departure ■ Documenting bifurcated deals: who is the

lender of record? – various approaches ■ Hedging facilities

• Who provides this• Ranking (always first?)• Handling large RCFs

■ Voting issues & thresholds• The traditional LMA approach • Will it work in clubbed or dual tranche

deals• Is it time for a change?

Collateral & Security ■ Collateral in the UK & Europe ■ Financial assistance ■ Separate Facility agents – are they neces-

sary? ■ Separate Security Agents – why and how

Transferability, Assignment and Portabil-ity ■ Transferring / selling post completion

• Who is the Lender of Record – does it matter

■ Methods of selling down - impact• Assignment• Sub-participation• Other structure methods

■ What borrower controls might apply Role play: Borrower vs lenders – negotiat-ing selected aspects in the term sheet

Inter-creditor issues and Agreements Among Lenders (“AAL”) ■ Who are the Lenders of Record – pre and

post sell-down? ■ Who are the parties to the ICA ■ Who are the key parties to the AAL

• Should the Borrower be a party to the AAL - Pros and cons

■ What is the “typical” ranking ■ Hedge facilities – are they always super

senior? ■ Deciding which aspects go in the ICA or the

AAL ■ Amendments and Waivers

• What is controlled and by whom• Dual consent structures – a viable solu-

tion? ■ Enforcement and Standstill issues

• Who is the “Instructing Group” – what happens in dispute

• Reconciling the unitranche and the RCF tensions

• Reconciling tensions in split unitranche • Standstill periods

■ The concept and application of “Material Events of Default” • What does it cover• When does it matter• Are there other solutions

■ Problems when things go wrong• How will dual or bifurcated structures af-

fect Schemes of Arrangement• Potential problems with “class” where

lenders are in both RCF and unitranche• When unanimous consent is no longer

unanimous




Course Content

Latest Basel IV Regulatory RequirementsDate: 27 Apr 2018

Location: London Price: 695+VAT

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Course Overview

Basel III is a global regulatory framework on bank capital adequacy, stress testing, and market liquidity risk. It was developed in response to the deficiencies in financial regulation revealed by the global financial crisis of 2007–08. Basel III, which is currently implemented until 2019, is intended to strengthen bank capital requirements across the world and avoid another systemic banking crisis. Basel IV is a contested term describing the latest 2016 to 2017 changes made to the Basel accords. Regulators simply consider it as an extension to the Basel III reforms. This session provides participants with a detailed tour and review of the Basel accords issued by the Bank for International Settlement (BIS) and the ever-evolving regulation stemming from Basel II and Basel III proposals and the Capital Requirements Directive IV (CRD IV) in Europe. Through a mix of lecture and case studies, the workshop will equip participants to achieve a detailed understanding of Basel guidelines, specifically on the following technical topics:

■ Components of Tier I and Tier II instruments; ■ Computation of Risk Weighted Assets (credit risk, market and operational risk); ■ The ever-evolving minimum capital ratios; ■ The impact of TLAC and MREL; ■ Leverage, LCR and NSFR ratios.

Participants will be required to bring a laptop to the course.

Session 1 - Introduction ■ Overview of the regulatory banking frame-

work ■ Global rules for local implementation ■ From Basel I to Basel IV ■ Capital Requirements Directive IV (CRD

IV) ■ The 3 Pillar approach ■ Stress testing of European banks ■ Vickers' report in the UK

Session 2 – Available Capital ■ From accounting equity to common equity

Tier 1 ■ Overview of key accounting adjustments

• Goodwill and intangibles • Non-controlling interests • Deferred taxes

■ Hybrid securities: preference shares, sub-ordinated debt, mandatory and contingent convertibles

■ Tier 1 classification: impact of Basel III on the design of qualifying hybrids

■ Tier II instruments Case Study: participants will reconcile an IFRS book equity of a European

bank to compute Tier I and Tier II capi-tal

Session 3 – Required Capital and Risk Weighted Assets ■ Overview of credit, market, counterparty and

operational risks ■ Definition of Risk Weighted Assets (RWAs) ■ Credit risk weighted assets

• Basel I / II approaches • Basel III - standardised to foundation and

advanced approach • Understanding PD, EAD, and LGD

■ Counterparty risk weighted assets• Expected Positive Exposure (EPE) • Credit valuation adjustment (CVA)

■ Market risk weighted assets• Normal distribution and Value at Risk (VaR) • Basel 2.5 and stressed VaR

■ Operational risk weighted assets • Standardised to advanced approach

Case Study: participants will calculate the unexpected losses of a simple portfolio of a European bank Case Study: participants will assess the VaR


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Latest Basel IV Regulatory RequirementsContinued...

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Course Content

of a single and two-assets portfolio Case Study: participants will reconcile the operational RWAs to its historical net banking income

Session 4 – Minimum Capital Ratios ■ Minimum capital ratios: from Basel II to

Basel III ■ Tier 1 and total capital ratios ■ Minimum and buffers above minimum: con-

servation and countercyclical buffers and buffer for systemically important banks

■ Impact of Basel III: phasing in of Basel III requirements

■ Global/Domestic Systemically Important Banks (G-SIBs and D-SIBs)

■ Total Loss Absorbency Capital (TLAC) ■ Minimum Requirement for own funds and

Eligible Liabilities (MREL) Session 5 – Leverage and Liquidity Ratios ■ Back-stop leverage ratio ■ Liquidity coverage ratios (LCR) ■ Net stable funding ratios (NSFR)

Case Study: participants will calculate and comment on those 3 ratios for a European bank Session 6 – Basel IV Latest ■ A standardised floor of 72.5% of the re-

quirement based on Standardized approach ■ A simultaneous reduction in Standardised

risk weights for low risk mortgage loans ■ Simplication of internal-based models ■ Higher leverage ratio for G-SIBs


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CryptocurrenciesDate: 09 April 2018, 07 Sep 2018

Location: London Price: 675+VAT

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Course Overview

Crypto currencies are very high profile at present – mainly for the wrong reasons. The founding currency, Bitcoin – which started it all - was conceived by the mysterious Satoshi Nakamoto following the banking crisis. His/her/their vision was the creation of an alternative global currency, free of governmental and other controls, independent of all financial institutions, traded on a global peer to peer basis in the Cloud. Its settlement system used an established ledger technology called Blockchain which was enhanced considerably by a fiendishly complex mathematical algorithm requiring proof of work and community consensus to achieve crypto resilience. As originally conceived, Satoshi’s mission has been largely accomplished. The challenge Satoshi could not avoid is that all the features that make a crypto currency highly attractive to the intended user are also very appealing to criminals. This has prompted more unwelcome regulatory interventions than the system intended. In addition the popularity of crypto-currencies has powered a huge increase in values in the last few months and by any sensible measure of investment performance it is hard not to see this as a potential bubble based on the flawed and highly risky greater-fool theory of investment.

Session 1- What is a Crypto - currency ■ A brief history ■ How do crypto-currencies work ■ What platforms are used ■ The importance of miners ■ Proof of work & Consensus ■ Different crypto-currencies available

Case Study – simple example of how a crypto currency works

Session 2: The Mechanics of Bitcoin and Other Crypto-currencies ■ How do they work ■ Mining syndicates ■ Coin rewards versus transaction fees ■ Forks to overcome limitations ■ Decentralisation ■ Examples of different crypto-currencies

Session 3- How to Store and Use Crypto-currencies ■ Wallets ■ Personal and Wallet codes ■ Intermediaries ■ Using Crypto currencies ■ The smallest division – the Satoshi ■ High profile wallet providers ■ Crypto currency acceptance – the hype ■ Crypto currency acceptance – the reality

Case Study – examples of what is claimed and what is happening

Session 4- Crypto currencies and Anonymity ■ How does this work ■ Identifying a user

■ Where does it work well ■ Where has it gone wrong ■ Capital flight ■ Money laundering ■ Other Criminal activity ■ Wallet hacking

Case Study – Examples of what has happened so far Session 5- What are the obstacles to Crypto-currencies ■ Key constraints ■ Existing processes ■ Market resistance ■ Client resistance ■ Regulatory resistance

Case Study – Examples of obstacles Session 6 –Community Acceptance & The Regulation of Crypto Currencies ■ A “wait and see approach” for now ■ Who has regulated ■ Bit-license ■ ICO’s ■ The strengths and weaknesses of regulation

Case Study: Simple examples of what has happened to date. Session 7 - Putting It All Together ■ What has happened so far ■ Why has it not been implemented en-masse

yet ■ What will the next stage be ■ What should we all be doing right now ■ The future?


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Letters of CreditDate: 11 Jun 2018, 15 Oct 2018

Location: London Standard Price: £625 +VAT Membership Price: £500 +VAT

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Course Overview

Despite increasing movement to unstructured open account trading, there is still a place for Trade Finance, and, in particular, Letters of Credit which are widely used by small and medium sized enterprises, in the import and export of goods and services. This 1-day course will provide a firm foundation to participants new to the workings of Letters of Credit, as well as reinforcing and consolidating the knowledge of those participants who already have some general Trade Finance experience. Through a better understanding of the nature and mechanics of Letters of Credit, participants will be better placed to identify customer needs and recommend appropriate solutions. Included in the course are practical sections covering documentation, the regulatory environment and the implications of Financial Crime Compliance. These include the various International Chamber of Commerce (ICC) rules and practices and a high-level oversight into anti-money laundering (AML), Countering the Financing of Terrorism (CFT) and Sanctions considerations. The course will use case studies and interactive class discussions, encourage delegates to question and test their knowledge at each stage of the course.

Course Content


What is Trade Finance? ■ Benefits of trade finance to businesses and

banks ■ Introduction to the trade cycle ■ Incoterms 2010

• Summary of terms • The advantages/disadvantages to Import-

er/Exporter in the use of Incoterms 2010 • Principal methods of settlement

■ General Risk Considerations• Trade finance products vs open account • Financial Crime Compliance - AML, CFT

and Sanctions • Know Your Customer (KYC) and Customer

Due Diligence (CDD) • Correspondent Bank risk • Counterparty risk • Sanctions clausing • Operational risk • Credit risk

Case Study: Short exercise to check understanding of Incoterms application. Core Trade Products

■ Import / export Documentary Collections ■ Letters of Credit ■ Guarantees

Documentary Letters of Credit ■ Principal parties (buyer, seller, issuing bank,

advising bank, confirming bank) ■ Benefits to importers and exporters of Docu-

mentary Letters of Credit ■ Relationship between buyer, seller and banks ■ Advantages / disadvantages of letter of credit ■ Risk factors re issuing letters of credit ■ The autonomy of letter of credit operations

(Independence Principle) ■ Importance of the application form (legal

issues) ■ Instructions to issue/amend credits ■ Workability of the credit ■ Jurisdiction

Introduction to the International Chamber of Commerce UCP 600 Rules: ■ Structure and obligations under letter of cred-

it; ■ Availability of credits, expiry date and place

for presentation ■ Availability by payment, deferred payment,

acceptance, deferred payment standard for examination of documents; dealing with discrepant documents, waiver and notice of refusal;

■ Key legal decisions (Santander v Paribas, CIC v CMB)

Key characteristics of Commercial Documents used in international trade ■ Invoices (commercial, tax, customs, consular,

pro-forma invoice)


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Course Overview


Letters of CreditContinued

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■ Marine/Ocean Bills of Lading • Title, transfer • Control of goods (transferable B/L v.

straight consigneed) • Delivery considerations

■ Other forms of transport document • Multimodal transport document • Air transport document • Road, Rail or Inland Waterway transport

documents • Non-negotiable / draft bill of lading

■ Insurance Policy/Certificate ■ Other certificates (Certificate of Origin,

Inspection Certificate, Phytosanitary, etc) ■ Bills of Exchange

Exercise - using examples of commercial documents to help participants to understand their technical content, the significance and importance of documents.

Examination of documents ■ Key elements of the main articles of UCP

600 ■ The standard for examination of docu-

ments: “no conflict” rule – article 14 Processing non-compliant documents as Nominated/Confirming Bank

■ Processing non-compliant documents as Issuing Bank

■ Risks arising from non-adherence to UCP 600

■ Legal cases and ICC Banking Commission opinions

■ DOCDEX – dispute settlement mechanism of ICC for trade finance

■ Analysing irregularities in documents International Standard Banking Practice ISBP 745 (2013 Rev) ■ What constitutes an “alteration” or “addi-

tion” to a document, when and how should these be authenticated?


■ How should one handle typing errors on documents regarding the name and ad-dress, different addresses of same compa-ny, etc.?

■ Detailed practices when working with different trade documentation (e.g. doc-uments not covered by UCP, packing lists, weight lists, beneficiary certificate, non-negotiable sea waybill, analysis in-spection, health, phytosanitary, quantity & quality certificates)


Advising Bank, Nominated Bank, Confirming Bank



■ Assignment of proceeds

Case Studies a) to consider the needs of an exporter or importer and suitability of using a Letter of Credit in a cross-border transaction and / or b) to check understanding of the collections procedure and the practical application of the UCP600

Other forms of Letter or Credit A review of the purpose, procedure and risks associated with: ■ Usance credits ■ Transferable Credits ■ Back-to-Back Credits ■ Red and Green Clause Credits ■ Revolving Credits ■ Standby Credits (vs Guarantess) ■ Synthetic Credits

Other considerations ■ Acceptance ■ Discounting ■ Aval ■ Factoring ■ Forfaiting

Financial Crime Compliance ■ Consituent parts (money laundering, terrorist

financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compliance

risk in cross border transactions ■ Why are international trade transactions in-

creasingly a target for abuse? ■ The consequences of non-compliance (for


Case Study: Participants work in groups to consider the needs of a business and to identify the appropriate product solution. ■ Summary of day’s learning ■ Opportunity to refresh clarify key points, clar-

ify ■ Review main learning points.


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Trade Based Money Laundering (TBML) and Sanctions Compli-ance

Date: 24-25 May 2018 , 09-10 Oct 2018

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Location: London Standard Price: £1,350 +VAT Membership Price: £1,080 +VAT

Whilst trade and commodity finance is low in credit risk it exposes banks to high compliance risks. Banks who have failed to implement adequate Financial Crime Compliance programmes and training have incurred fines, reputational damage and faced the potential loss or suspension of their ability to operate in certain currency markets or jurisdictions. This 2-day course for personnel who are involved in Trade Finance, including bank auditors, compliance officers, operations managers and relationship directors, provides an explanation of the operation of the methods of payment and financing used in international trade and commodity transactions and the nature of associated compliance risks. The course covers all aspects of Financial Crime Compliance (including the regulatory framework) with particular regard to Trade & Commodity Finance (principles and products), Correspondent Banking, International Payments, Global Cash Management, their associated compliance risks and the suspicious money laundering / sanctions violation activity red flag indicators of each. Through attending this course participants will be able to identify compliance risk features in core product areas and key aspects from an audit and compliance risk perspective. The course uses a range of typologies, exercises and case studies to enable the participants to consider transactions and identify the key risk compliance features, areas of due diligence and further information required to make a risk-based assessment

Day 1 Introductions ■ Trainer & participants ■ What do you know? ■ Aims and objectives. ■ Course context.

Financial Crime Compliance ■ Consituent parts (money laundering, ter-

rorist financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compli-

ance risk in cross border transactions ■ Why are international trade transactions

increasingly a target for abuse? ■ The consequences of non-compliance (for

banks, corporates and individuals) Anti-Money Laundering (“AML”) ■ What is money laundering? ■ Why is money laundered? ■ How is money laundered? ■ The key stages of money laundering;

placement, layering, integration ■ Customer Due Diligence (CDD) ■ The risk-based approach to anti-money

laundering ■ Money laundering and terrorist financing

Case study concerning the involvement of, and consequences for, an international bank which transferred money arising from drug smuggling across three continents.

Countering the Financing of Terrorism (CFT) ■ Key differences between CFT and AML ■ The importance of due diligence and fo-

cussed screening Case study concerning the involvement of, and consequences for, an international bank which was identified as having processed funds used to finance terrorism. Sanctions ■ What are sanctions? ■ Why are they imposed and what is their

intended impact? ■ Who imposes them and on whom are they

imposed? ■ What is the difference between a trade em-

bargo and financial sanctions? ■ Examples of sanctions imposed in recent



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■ years ■ The relevance of due diligence and screen-

ing Case study on sanctions breaches concerning a major UK corporate.

Financial crime also relates to:- ■ Bribery & corruption ■ Tax evasion ■ Proliferation

Facilitation of money laundering ■ Complexity ■ Three stages of money laundering ■ Financial products vs open account ■ Co-mingling ■ Cash ■ Fraud ■ Smuggling ■ Transfer pricing, etc. ■ Capital Flight ■ Foreign Exchange

Examples of legitimising the movement of illicit monies. a) the use of over-inflated invoicing representing “management charges b) misrepresentation of invoice value, multiple invoicing and false description of goods

Correspondent banking ■ What is the role of a correspondent bank? ■ Why is correspondent banking fundamental

to cross border money flows? ■ The counterparty compliance risk of using

Correspondent Banks ■ The use and operation of Nostro, Vostro

and Loro accounts ■ Correspondent banking infrastructure;

• Message authentication; • Provision of payment, trade and treasury

services; • Cash management

■ Risk profile of remitting, receiving and re-imbursement parties in cross border trans-actions

■ Know your customer; the impact of ”KYCC” ■ Key compliance risk zones:

• Ownership and control • Jurisdiction • Quality of jurisdictional regulatory and

supervisory framework

• Adequacy of AML and sanctions compliance procedures

• Nature of respondent’s business • Client base • Shell banks • Direct access accounts • Downstream correspondents • Correspondent network rationalisation

Exercise; due diligence and risk considerations

Financial Institutions - as customers: ■ Compliance risk assessment framework; key

components ■ Due diligence and risk assessment ■ Unacceptable customers ■ Monitoring activity – warning signals, red

flags, Financial Action Taskforce (FATF) recom-mendations.

International Payments / SWIFT Messaging ■ The mechanics of cross border funds transfers

and nature of the payment instruction ■ Parties; remitter, originator bank, receiving

bank, beneficiary, cover/reimbursing bank ■ What is SWIFT? ■ What is the function and operation; ■ Understanding the use and role of SWIFT “MT”

message types in payments and trade trans-actions

■ Compliance risk;• Correspondent bank • Message abuse • Inappropriate use of message types

■ Message stripping ■ Methods of international bank transfer:

• Direct and serial processing method (the use of SWIFT MT 103)

• Cover method (the use of SWIFT MT103 plus SWIFT MT202 COV)

• The compliance risk implications of SWIFT MT202

■ Value dating ■ Key compliance risk zones:

• Message information • Originator; ownership, jurisdiction • Beneficiary; ownership, jurisdiction • Nature and value of payment – ordinary

course of business? • Screening – designated persons – sanc-

tioned countries? ■ The compliance risk exposure of US dollar

transfers


continued...





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■ High risk customers requiring payment services

■ Red flag suspicious activity indicators

Global Cash Management ■ Examples of global cash management

(concentration/pooling, zero and target balancing)

■ Parties; corporate structures, pool partici-pants and banks

■ Key compliance risk: • Pool participants; ownership, jurisdic-

tion• Nature of business • Correspondent/partner banks • Origin and nature of funds • Co-mingling of legitimate and illicit

monies ■ Monitoring activity – warning signals ■ Compliance risk profile

Case study re corporate group cross border cash concentration arrangement used to disguise illicit funds (from a subsidiary) and recirculation through apparent trade purposes Managing Risk ■ Risk Assessment and due diligence ■ Know your customer (KYC) ■ Red Flags and responsibilities ■ Identifying suspicious activity ■ Regulatory environment ■ Counterfeiting

Video / discussion on CDD, KYC, etc. Case study on the cost of non-compliance re AML and sanctions violation

■ Summary of day’s learning ■ Opportunity to refresh clarify key points,


Preparation for day 2 Day 2

■ Review of principal considerations re Fi-nancial Crime Compliance

■ Key learning points form Day1 ■ Any questions / thoughts which have arise ■ Introduction to Day 2

Trade Finance

Trade Transactions ■ Principal parties and associated risks ■ Objectives of principal parties ■ Understanding the trade cycle ■ Additional risks of trading internationally

Description, function and operation: ■ The nature and purpose trade finance ■ What trade finance is and why it is required

Why trade finance carries high compliance risk

■ High risk components (e.g.) ■ Trade finance compliance risk characteristics;

• Counterparties – “know your customer’s customer”

• Parties; different roles of banks; fragment-ed bank involvement

• Transactions; complexity & banks deal in documents – validation?

• Negotiable instruments • Involvement of third parties (agents, carri-

ers, etc) • Jurisdictions / role of finance in cross bor-

der abuse

Comparison between international payments and documentary trade finance in the compliance risk environment: ■ Automated screening ■ Message stripping ■ Manual based due diligence

Trade based money laundering (TBML) ■ Definition ■ FCA Thematic Review ■ Increasing focus of criminal activity ■ Compliance considerations ■ Risk mitigation (KYC; KYCC; information

screening; document checking; red flags; etc.)

■ Common methods of trade based money laundering

Core Trade Finance Products ■ Open Account Trading ■ Trade cycle ■ Incoterms ■ Risk considerations (counterparty, credit,

FCC) ■ Products overview ■ Compliance risk assessment (bank controlled

payment/reimbursement)


continued...





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Case study; the assessment of a business transaction, requiring identification of potential risk issues Documentary collections ■ What is a documentary collection? ■ What is the purpose of a documentary

collection? ■ Principal parties and roles ■ Document requirements and purpose ■ Types; sight (DP), usance (DA) ■ URC522 ■ Compliance risk assessment;

• Remitting bank due diligence • Collecting bank due diligence

Case study on the assessment of a potential AML / CFT / sanctions breach documentary credit transaction, requiring identification of key compliance risk issues and the need for further information to make a risk-based assessment

Documentary Letters of credit ■ What is a letter of credit? ■ What is the purpose of a letter of credit? ■ Principal parties and roles ■ Other considerations:-

• The independence principle • Application process • Workability

■ Different types of letter of credit (overview) • Irrevocable / revocable • Unconfirmed / confirmed • Transferable (parties and operation,

compliance risk) • Standby • Revolving • Back to back • Synthetic

■ Trade documentation; vulnerability to abuse and compliance risk

■ UCP 600 ■ Compliance risk assessment; issuance,

presentation of documents, payment; Issuing / advising / negotiating bank; the importance of LC availability

■ Red clause / sanctions clausing ■ Payment terms ■ LC confirmation; financial engagement and

responsibility; discounting

Case study to identify unusual features of a letter of credit request and identify the red flag suspicious activity characteristics

Bank Guarantees ■ What are bank guarantees? ■ Principal parties ■ The characteristics of “on demand” uncondi-

tional guarantees ■ Autonomy and the independence principle ■ Types and use of guarantees in trade (bid, APG,

performance) ■ Direct, indirect and counter guarantees ■ Transferable guarantees; key compliance risks

aspects ■ Foreign laws and usage ■ General compliance risk and vulnerability to

criminal abuse ■ Structuring guarantees to reduce compliance

risk exposure ■ URDG 758

Case study to consider the compliance risk aspects of a request for a transferable letter of guarantee and the further information required to undertake due diligence; use of additional information to identify unusual features and consider an appropriate course of action

Non-core Trade Products and processes

Forfaiting ■ What is forfaiting? ■ Principal parties ■ Primary and secondary forfaiting transactions ■ How to establish debt instrument authenticity ■ The importance of due diligence; is there an

underlying trade transaction?

Commodity Finance ■ Characteristics of commodity finance ■ Key compliance risk zones :

• Emerging markets/high risk jurisdictions • Commodity traders (nature and vulnerability

to compliance risk) • Value and existence of goods

■ Syndicated facilities (due diligence on other lenders/participants)

■ Pre-export & pre-payment finance (high risk environment) • Key compliance risk aspects/deployment of

risk mitigation ■ Warehouse financing

• Parties


continued...





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• Key compliance risk aspects/deployment of risk mitigation techniques

• The use and vulnerability of warehouse receipts & role of collateral managers

■ Tolling ■ Key compliance risk considerations

Case study re the use of commodity based pre-payments to disguise the movement of laundered funds

Receivables finance ■ What is receivables finance? ■ Compliance risk vulnerabilities of financing

open account transactions ■ Forms of receivables finance:

• Full factoring • Confidential invoice discounting• Specific insured receivables finance • Reverse factoring

■ The use of receivables finance in the con-text of trade finance

Payables finance / Supply Chain Finance ■ What is payables finance and when is it

used? ■ Principal parties ■ Types of payables finance; description, op-

eration and parties: • Pre-shipment payables finance (suppli-

er-led) • Approved payables finance (buyer-led)

COMPLIANCE CONSIDERATIONS ■ Trade based money laundering character-

istics ■ Vulnerability of cross border transactions to

fraud ■ Information screening ■ Document checking ■ Red flags

Mitigating Risk ■ Know your customer and your customer’s

customer ■ Understand the trade cycle and what is

‘ordinary business’ ■ Compare and contrast ■ Is the complexity of the transaction neces-

sary? ■ Follow the money ■ Apply common sense ■ Ask the right questions ■ The importance of first line of defence

■ Red flags ■ Fraud

■ Summary of day’s learning ■ Opportunity to refresh clarify key points,


Conclusion & next steps for action






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International Trade Finance MasterclassDate: 13 – 15 November 2018

Location: London Standard Price: £1,595 +VAT Membership Price: 1,276+ VAT

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Day One Despite increasing movement to unstructured open account trading there is still a place for Trade Finance particularly for small and medium sized enterprises. Day one will provide a firm foundation to participants new to the concepts of trade finance, as well as reinforcing and consolidating the knowledge of those participants who already have experience. In learning how to identify customer needs participants will be better placed to recommend appropriate product solutions. In addition, the course will help participants to identify and assess various risks to both bank and customer in international trade transactions, as well as being able to explain and identify ways of mitigating the underlying risks associated with trade finance transactions. Included in the course are practical sections covering documentation, core products, documentary collections, documentary letters of credit and contract guarantees, as well as the importance of the various International Chamber of Commerce (ICC) rules and practices and a high-level oversight into Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Sanctions considerations. Days Two and Three Trade Finance has been “re-discovered” yet remains a little mysterious. It is a product that has always generated strong revenues- often non funds based – and traditionally has exceptionally low credit losses (on a portfolio basis). Most global banks are able to apply very low probability of default ratios and usually lose as much to fraud as to actual credit losses. The major general challenge to trade finance in recent times has been the impact of Financial Crime Compliance and Sanctions. Whilst credit losses and hence credit risk is low, FCC risk is very high because of the increasing tendency for global trade to pass through more than one country, use different modes of transport, use different currencies and transit through some regions where money laundering controls are not as strong as in others. This makes the audit trail very challenging. This is not a course about FCC but as trade finance is reckoned to be the main driver for money laundering, it needs to be understood. To compound matters, many global banks have reduced their correspondent banking networks by up to two thirds – often based on the Transparency International CPI. This means it is becoming increasingly likely that more than two banks are involved in a transaction, causing delays in processing and frustration for the client. Sight LC’s can take 10-15 working days to be processed when there are two to three advising banks. Of course this has created opportunities for confirmation activities – provided FCC clearance is obtained. Another challenge of trade finance is the tendency for banks to re-invent the wheel by using impressive sounding and not always easy to define marketing names to describe “new” products which are not actually new. “Buyer centric supply chain solution” actually is the sexier name for reverse factoring. This practical two day advanced level course will concentrate on what is happening in the market right now leaving delegates with a clear and working knowledge of how trade finance is undertaken in the real world, what actually happens and what are the implications for all parties concerned. A good working knowledge and familiarity with International Trade finance is required to derive the maximum benefit from this course.



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International Trade Finance Masterclass

Day One


What is Trade Finance? ■ Benefits of trade finance to businesses and

banks ■ Introduction to the trade cycle ■ Incoterms 2010

• Summary of terms • The advantages/disadvantages to Importer/

Exporter in the use of Incoterms 2010 • Principal methods of settlement

■ General Risk Considerations • Trade finance products vs open account • Financial Crime Compliance - AML, CFT and

Sanctions • Know Your Customer (KYC) and Customer

Due Diligence (CDD) • Correspondent Bank risk • Counterparty risk • Credit risk

Case Study: Short exercise to check understanding of Incoterms application. Key characteristics of Commercial Documents used in international trade ■ Invoices (commercial, tax, customs, consular,

pro-forma invoice) ■ Marine/Ocean Bills of Lading

• Title, transfer • Control of goods (transferable B/L v.

straight consigneed) • Delivery considerations

■ Other forms of transport document • Multimodal Transport Document • Air Transport Document • Road, Rail or Inland Waterway Transport

Documents • Non-negotiable bills of lading

■ Insurance Policy/Certificate ■ Other certificates (Certificate of Origin, In-

spection Certificate, Phytosanitary, etc) ■ Bills of exchange

Exercise - using examples of commercial documents to help participants to understand their technical content, the significance and importance of particular documents.

Core Trade Products ■ Import / Export Documentary Collections ■ Letters of Credit ■ Guarantees

Import / Export Documentary Collections ■ Principal parties (buyer, seller, presenting bank,

remitting / collecting bank) ■ Benefits to importers and exporters of Docu-

mentary Collections ■ Relationship between principal and banks ■ Role of banks (incl. correspondent banks /

agency arrangements) ■ Legal and practical issues re the duties of the

banks involved in handling collections ■ Conditions for release of documents ■ Areas of risk:

• Usance collections • Partial payments • Avalisation (so rare would exclude) • Release of goods on trust

■ Procedures for Protest of Bill of Exchange (B/E) and underlying risks

■ Complexities of the ICC Uniform Rules for Col-lection (URC 522)

Case Studies a) to consider the needs of an exporter or importer and suitability of using Documentary Collection in a cross-border transaction and / or b) to check understanding of the collections procedure and the practical application of the URC 522

Documentary Letters of Credit ■ Principal parties (buyer, seller, issuing bank,

advising bank, confirming bank) ■ Benefits to importers and exporters of Docu-

mentary Letters of Credit ■ Relationship between buyer, seller and banks ■ Advantages / disadvantages of letters of credit ■ Risk factors re issuing letters of credit ■ The autonomy of letter of credit operations (In-

dependence Principle) ■ Importance of the application form (legal is-

sues) ■ Instructions to issue/amend credits ■ Workability of the credit ■ Jurisdiction

Introduction to the International Chamber of Commerce UCP 600 Rules: ■ Structure and obligations under letter of credit; ■ Availability of credits, expiry date and place for

presentation ■ Availability by payment, deferred payment, ac





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■ ceptance, deferred payment standard for ex-amination of documents; dealing with discrep-ant documents, waiver and notice of refusal;

Examination of documents ■ Key elements of the main articles of UCP 600 ■ The standard for examination of documents:

“no conflict” rule – article 14 ■ Processing non-compliant documents as Nomi-

nated/Confirming Bank ■ Processing non-compliant documents as Issu-

ing Bank ■ Risks arising from non-adherence to UCP 600 ■ Legal cases and ICC Banking Commission

opinions ■ DOCDEX – dispute settlement mechanism of

ICC for trade finance ■ Analysing irregularities in documents

International Standard Banking Practice ISBP 745 (2013 Rev) ■ What constitutes an “alteration” or “addition”

to a document, when and how should these be authenticated?


■ How should one handle typing errors on documents regarding the name and address, different addresses of same company, etc.?


Advising Bank, Nominated Bank, Confirming Bank



■ Assignment of procceds

Case Studies a) to consider the needs of an exporter or importer and suitability of using a Letter of Credit in a cross-border transaction and / or

b) to check understanding of the collections procedure and the practical application of the UCP600

Other forms of Letter or Credit A review of the purpose, procedure and risks associated with: ■ Irrevocable / revocable ■ Usance credits ■ Transferable Credits

■ Back-to-Back Credits ■ Red and Green Clause Credits ■ Revolving / Reinstatement Credits ■ Standby Credits ■ Synthetic Credits

Guarantees ■ Types of guarantees:

• Tender/bid bonds • Advance payment guarantees • Performance bonds • Retention money guarantees • Warranty Guarantees (Maintenance guaran-

tees) • Bail bonds • Payment guarantees • Indemnities/counter guarantees

■ Risk Assessment (including risk weighting) ■ Wording of Guarantees ■ Demand under guarantees: issues ■ Extend or Pay demands ■ Expiry and Cancellation Uniform Rules for De-

mand Guarantees 758: main principles, URDG 758 guarantee sample wording, sample claus-es

Case Study to review guarantees which caused a loss to the bank. Discuss the practical application of URDG 758 and potential for use in local banking practice and legal jurisdictions.

Financial Crime Compliance ■ Consituent parts (money laundering, terrorist

financing, sanctions breaches) ■ Current examples ■ An introduction to the nature of compliance

risk in cross border transactions ■ Why are international trade transactions in-

creasingly a target for abuse? ■ The consequences of non-compliance (for


Case Study: Participants work in groups to consider the needs of various SMEs and to identify the appropriate product solution. ■ Summary of day’s learning ■ Opportunity to refresh clarify key points, clar-

ify ■ Review main learning points.





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Day Two The Current Market Place ■ Recent evolution and current developments ■ The challenge of emerging markets ■ The challenge of China ■ Brexit ■ President Trump ■ New products ■ The traditional three bands of clients: Global

and Large Corporate, MME’s, the rest! ■ Understanding trade finance at a fundamental

level.’ ■ Typical users of Trade Finance products and

services

Financial Crime Compliance & Sanctions ■ Understanding the risk based approach ■ Impact on Trade Finance ■ TI, CPI and its impact ■ FATF ■ DDD and the need to obtain a clear line of

sight across the value chain ■ Money laundering methodologies ■ Ghost payments and variations ■ Under/over invoicing and variations ■ Documentary fraud ■ PEPS ■ Sanctions ■ Risk mitigation, management and transfer

Case Study: Delegates will be asked to consider a real case to identify FCC risks and suggest how they may have been managed and mitigated

Traditional Risks – The Critical Issues ■ Understanding, identifying and managing risk ■ Credit risk, Market risk & Operational risk ■ Sovereign, Political / Country risk ■ Institutional risk / Bank risk ■ Corporate and other critical risks ■ Importer and Exporter’s risk ■ Other risks in the transaction and how to mit-

igate them (transport risk, warehousing, force majeure, etc.)

■ Risk mitigation, management and transfer Case Study: An example using three different payment methods. Delegates will be asked to identify and explain what type of client would choose one in preference to the other two and why, to illustrate risks in reality.

Review of Key Products ■ How does the customer analyse his risk? ■ Which products does he use and why? ■ Payment in Advance ■ Open Account ■ Collections – Outward & Inward / Clean & Doc-

umentary ■ Letters of Credit (covered in more detail below) ■ Risks and opportunities ■ Control possibilities

Case Study: Showing how clients sometimes see the world of risk in a different way to bankers.

Supply Chain Management & Finance ■ The origins of SCM and what does it mean in

practice ■ Understanding the issues in SCM – “the tug of

war” between supplier & buyer ■ Bringing about a “balance” between parties for

effective processing ■ Understanding about movement of ‘information’

,’goods’ and ‘cash’ ■ Supply Chain Finance Main SCF models: ac-

counts payable - centric, accounts receivable, BPO

■ Review the risk aspects of SCF Case Study: Showing how Reverse Factoring works and how both Buyer Centric and Seller Centric models are being employed.

Letters of Credit (L/Cs) ■ Traditional L/C’sThe four contract concept ■ Confirmations ■ Red Clause ■ Green clause ■ Revolving L/Cs ■ Evergreen ■ Transferable L/Cs ■ Back to Back L/C structures

Case Study: Showing how different types of LC’s are used, why this is the case and what difference it makes to the risk profile.

Standby Letters of Credit ■ History and origin ■ The dominant trade finance product ■ Uses ■ Risk management ■ Issue and assessment ■ Pricing ■ Understanding the applicability of ISP98 and

UCP 600 for standbys ■ Fraud and unfair calling

Case Study: Using a standby in practice





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Export Finance issues ■ Looking at the big picture ■ Understanding the purpose of borrowing ■ Country risk issues ■ The reality of title and control ■ Negotiation under letters of credit ■ Discounting of deferred payment L/C, accept-

ance credits (with or without recourse) Case Study: Delegates are asked to consider how to fund an export order using different types of contract arrangements.

Controlling Credit Exposure – Formulating a Limit ■ Understanding and explaining the trade cycle ■ The use of time lines ■ Assessing and appreciating funding gaps

Case Study: Using time lines and facility plotting to spot double finance and identify the actual funding gaps and customer needs.

Day Three Structuring Finance for the Trader ■ Analysing the trade flows ■ Assessing facility size and structure ■ Specific lending with identifiable maturity

dates ■ Appreciating and controlling sources of repay-

ment Case Study: An example of a medium size business using structured finance. Effective Use of Collections for Short-Term Finance ■ Using collections as financing opportunities ■ Identifying and mitigating risks ■ Maintaining control

Supporting the Trader ■ Using the goods as collateral ■ Assessing the value of goods ■ The value of pledges and trust receipts ■ The need for structured lending

Case Study: How to use goods as security for a trade deal. Warehousing of Goods ■ Warehouse location ■ Management assessment ■ Legal frameworks ■ Obtaining and retaining title and control ■ Risks and responsibilities of Collateral Manag-

ers

■ Cost versus control Case Study: Warehousing in practice using a real example. International Demand and Contract Guarantees / Bonds ■ Scope and Application – an introduction

(suretyship v. demand guarantee) ■ Indemnities versus guarantees ■ Different types - Bid, Performance, Advance

payment, Warranty and Retention bonds ■ Rules governing guarantees and bonds ■ Legal jurisdiction and expiry date issues ■ Value of using URDG 758 – ICC Rules for de-

mand guarantees ■ Impact of non bank competitors – COFACE,

Euler Hermes Case Study: Using these in practice.

Receivables Financing ■ Mechanics of Factoring and Invoice Discount-

ing ■ Forfaiting – an important adjunct to the TF

mechanism ■ Role of Credit Insurance ■ Mechanics of Securitisation ■ FCC risks

Case Study: A real example showing how this makes a huge difference to working capital. The Commodity Sector and its Players ■ History and origins of the commodity industry ■ Understanding the nature of ’commodities’ ■ Analysing the players – growers / producers;

traders and end-users ■ Financing of commodities ■ Looking beyond the balance sheet ■ Available documentation – taking and retain-

ing title ■ Commodity futures, options and derivatives ■ Hedging – a critical process in commodity

finance ■ Role and function of the exchanges ■ Main risks in the commodity trade (market,

fraudulent practices, legal issues, recent legal cases)

Case study: A large scale commodity deal and how it can be funded at an acceptable level of risk

Countertrade ■ Overview – when to use ■ Pitfalls and complications ■ Possible structures and Time management





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Syndications ■ When to syndicate ■ Lead or participant role ■ The completion from capital markets – high

yield bonds ■ Selling down exposure ■ Impact of quasi-governmental agencies ■ Risk/reward analysis

Case Study: A syndicated deal.






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Initial Coin Offerings – An IntroductionDate: 20 June 2018


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Developments in FinTech are transforming financial services with blockchain and distributed ledger technology at the forefront. Both The Wall Street Journal and The Economist have described it as technology that could change the world. However, the application of the underlying technology goes well beyond financial services. Blockchain allows the creation of bespoke digital currencies to support commercial transactions which can be linked to smart contracts. It also creates the facility to raise capital, operating in similar fashion to crowd sourcing, debt and equity capital raising events. The nature of the technology also permits the creation of novel relationships between the coins themselves, their utility, and the funds raised. The ICO could herald a new era of ‘Digital’ Corporate Finance. The underlying blockchains and cryptography supporting the coins provide technical solutions that are novel and clever, and are very different to the way the current capital raising markets operate. They offer new frameworks to define the relationship between suppliers, customers, stakeholders and potentially the regulators. Starting from first principles, the course firstly establishes a basic understanding of blockchain and digital currency technology, which is vital for any project contemplating an ICO. Building on this knowledge, the course systematically works through the different components required for a successful ICO from First Concept, Whitepaper, Coin Economics, through to Regulatory, Legal and Marketing aspects. This course is a one day introduction to the basic principles of an ICO project, starting with the foundations associated with bitcoin and blockchain. It will provide delegates with a first understanding of the steps required to execute a successful coin offering.

Background and Introductions Overview ■ Bitcoin, Blockchain and ICOs

THE EMERGENCE OF DIGITAL CURRENCIES AND BLOCKCHAIN History of Blockchain and Digital Currencies ■ The first digital currency

• Bitcoin and why study it? • The emergence of blockchain from Bitcoin • Digital currencies - Bitcoin, Ether, Ripple,

Dash, Litecoin, Zcash, Monero etc

How Blockchains and Digital Currencies work? ■ Cryptographic primitives

• The hash function • Public and private keys

■ Transactions and Consensus Protocols • Blockchain, transactions and consensus;

proof of work, proof of stake

Market Overview ■ Currency Segmentation

• An overview of digital currencies • Market trends

■ Cryptocurrency Trading • Introduction to digital currency trading • Digital Currency exchanges

The Initial Coin Offering ■ Overview

• Origin and history of Initial Coin Offerings • What good looks like - Examples • Market Review

■ Coin Concept • Why are ICO’s different? • The Offering: Capital Raising vs. Utility • Security vs. Coin • Token Definition, Utility, Rights and Design • Blockchain Protocol • Market Review

■ The Whitepaper • Authorship • Sections • Review • Design and Branding

■ Legal and Regulatory Compliance ■ Planning

• Marketing Strategy and Branding



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Initial Coin Offerings - An IntroductionContinued...

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• The Project Team • Budget• Management • Governance • What happens Post Sale? • Cyber Security • KYC, AML, Privacy, Confidentiality and Pol-

icies • Contingency Planning - What can go

wrong? ■ Stakeholder Mapping and Advisory Team

• Incentive Structures • Disclosure • Governance

■ Token Economics, Pricing and Use of Proceeds • Number of Coins and Rationale • Pricing Models • Budgets and Use of Proceeds

■ Communications Strategies and Channels • Community Management • Policies

■ Financial Governance, Accounting and Digital Asset Custody

■ Pre-Sale and ICO Execution

Example ICOs The Future: Where next for ICOs? ■ Vision and Opportunities ■ Barriers

Recap and Close



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The Roles and Responsibilities of the Money Laundering Reporting Officer (MLRO)

In-house or via Live Webina

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Course Overview

A

Background As far as AML is concerned, the buck stops with the MLRO. This is a key position within any financial services firm. When it comes to the identification, detection, escalation, reporting, managing and training of staff on Anti Money Laundering procedures it is the personal responsibility of the MLRO to ensure this all happens as effectively and efficiently as possible. In most jurisdictions it is a mandatory role. The MLRO should have a degree of seniority and authority within the business to drive policy decisions and actions. He/she should have undergone sufficient level of training and hold suitable qualifications and experience. Arrangements should be in place for when the MLRO is absent.

This one day workshop is designed to explain fully the roles and responsibilities of an MLRO. The workshop will be highly interactive and discussion, debate plus the swapping of “war stories” will be actively encouraged.

Course Length Case Study In addition to numerous case studies and examples, there will be a a course long case study, involving investigations and escalations to illustrate the learning points fully.

Who Should Attend: MLRO’s and all staff working within a compliance function especially those charged with AML escalations/investigations. Members of the internal audit function. Senior managers and top management would also derive considerable benefit from attending as they are the ultimate risk owners.

The Role of the MLRO: ■ CDD and ongoing monitoring ■ Reporting processes ■ Keeping records ■ Internal controls ■ AML/CTF risk assessment ■ Training of staff ■ Communication of AML/CTF policy and is-

sues within the business

Case Study/Example The Initial Risk Assessment and Identifying and Evaluating Key Risks ■ Country risk Assessment ■ Institution’s risk assessment ■ Adopting the Risk Based Approach ■ How the MLRO, Compliance Officer, Chief

Risk Officer, Internal Audit and the Board should co-ordinate

■ What makes an effective Compliance Of-ficer?

■ Accountability of the Compliance Officer ■ Interdependencies with other control func-

tions

■ Primary, secondary and on-demand compli-ance

■ The Compliance Officer’s Activities – and the support required

Case Study/Example

Internal Systems & Policies Including Implementing an Effective Compliance Framework and a Monitoring Programme ■ Analysing legal and regulatory rules ■ Identifying risks ■ Creating an internal AML/CTF policy ■ Designing control and procedures ■ Generating management information ■ Creating an effective compliance culture ■ Monitoring

Case Study/Example

Compliance and Corporate Governance ■ How does the MLRO contribute to Corporate

Governance and help manage risk ■ Reporting to the Board and Board oversight ■ Creating an effective reporting/escalation pro-


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cess ■ Working with all levels of management to

ensure training provided is suitable for the business on a risk based basis

■ Dealing with Regulators ■ Dealing with the NCA ■ Submitting regular (minimum annual)

MLRO reports to the Board

Case Study/Example

Keeping up with “The Rules” and the ever changing risks Surrounding Compliance and Financial Crime Prevention ■ Issues in Compliance ■ Issues in Anti-Money Laundering (AML)

and Combating Terrorist Financing (CTF) ■ Issues in Fraud ■ Issues in Identity Theft ■ Issues in Phishing

Case Study/Example

Managing the Risk of Money Laundering ■ Offshore Issues, PEPs and EPs ■ Know Your Client (KYC) and Identification

& Verification (ID&V) ■ Annual reviews ■ High risk clients ■ Monitoring systems ■ Testing procedures

Case Study/Example

Evaluation of Internal Reports ■ Disclosure & Escalation ■ Whistleblowing process ■ Requesting consent ■ Reminding staff about tipping off ■ Escalating to the NCA ■ Obtaining further information ■ Identifying the reasons for suspicion ■ Documenting decisions not to report ex-

ternally ■ Submitting/Escalating SAR’s ■ Policing the process ■ Reporting past practices which recent re-

ports indicate could now me money laun-dering

■ Policing the notice period following an SAR ■ Policing moratorium periods imposed by

the NCA Case Study/Example

The Roles and Responsibilities of the Money Laundering Reporting Officer (MLRO)

Other Regulatory Risks ■ Information Security and Data Protection ■ Market Abuse and Insider Dealing ■ Bribery and Corruption ■ Sanctions ■ …and other types and Risks in on-shore and

off-shore Banking Case Study/Example

Accounting for People Risks in Risk Management ■ Understanding the importance of human

error in procedures-driven environments ■ Common human factor problems

• Steep authority gradients • Reliance vacuums• Dominant individuals

■ Identifying and addressing human factor issues

■ Developing an effective compliance culture

Case Study/Example

Potential Criminal Abuse of Private Banking Services, Trusts and Corporate Services companies ■ Offshore companies and corporate services

analysed ■ Offshore trusts and trustee services ana-

lysed ■ The criticality of fiduciary duty ■ Understanding commercial rationale ■ AML trust and company vulnerabilities ■ Examples of abuse Course

Conclusion – Open Forum and Wrap Up


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Course Content

AML InvestigationsIn-house or via Live Webinar

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Bank analysts and anti-money laundering (AML) investigators reviewing customer transactions have an important, but often overwhelming, job. Banking professionals tasked with alert resolution, performing periodic reviews on high-risk accounts, and conducting investigations during a look-back transaction analysis consider myriad variables. Increasing budget constraints, deadlines, and volumes of information make it challenging for analysts to address all factors for each investigation. But failure to consider key factors could result in incomplete analyses, regulatory criticism, or other enforcement actions. In the current regulatory landscape, financial institutions are facing a new wave of regulatory scrutiny with no signs of slowing down; in fact, numerous recent government inquiries (especially OFAC) have uncovered anti-money laundering (AML) and sanctions violations at several financial institutions and have resulted in billions of dollars in fines and look-backs for breaches in AML and sanctions programs. All financial institutions can be required to perform extensive reviews of transactions and communicate any suspicious activities to their regulators with accuracy and speed. This course considers the challenge of AML investigations and how to meet them. It is based around two large case studies which will enhance the learning experience. Who Should AttendRisk Managers, Internal Auditors, Compliance Officers, External Auditors, Consultants and suppliers and all financial personnel involved with the risk and compliance function. Knowledge Pre-RequisitesSome knowledge of AML processes and investigations would be helpful.

Session 1: Introduction ■ AML Basics the role of the investigation team ■ Investigations structures ■ Investigation practices ■ STR’s and the escalation process ■ Sanctions ■ Tax evasion ■ Bribery & Corruption

Other financial crimes Session 2: Typical Requirements of the AML Investigation Function ■ Conducting historical transaction reviews in

response to regulatory inquiries ■ Supplementing Know Your Customer (KYC)

due diligence ■ Performing data and trend analysis ■ Data mapping around transactions and ac-

count activities ■ Recovering and extracting forensic data ■ Conducting substantiation checks of investi-

gation procedures and SAR procedures ■ Implementing post-regulatory action re-

quirements Session 3: PIOUS – Streamlining the Investigation Process ■ What patterns, if any, do you notice in the

transaction activity? (PATTERNS) ■ What is the ultimate source of the funds? (IN) ■ What is the ultimate destination of the

funds?(OUT) ■ Are there any unusual transactions? (UNUSU-

AL) ■ Does the activity rise to the level of suspi-

cious? (SUSPICIOUS) ■ Putting this together in practice ■

Session 4: Two major case studies to illustrate the learning points. Session 5: Course Wrap Up and Open Forum

END


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Course Overview


Course Content

AML & KYC: The Crime Prevention Compliance CourseIn-house or via Live Webinar

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Financial Crime Compliance and Regulatory Compliance are probably at the top of nearly every Financial Institution’s risk review process and have become the key strategic imperatives for all board members. The reputational damage and not to mention the fines imposed for non-compliance are huge concerns.

It is fair to say that banks are being micro-managed by regulators in this area and are being set exceptionally high standards for compliance.

Financial institutions are required to focus increasingly on Financial Crime Prevention measures and must have robust systems in place to combat them.

This includes detailed policies, clear lines of defence, robust CDD processes, a risk based approach, clear accountabilities and above all effective staff training and awareness throughout the organisation.

None of this is difficult but it is costly, time consuming and involves putting in place procedures and systems to deter, detect and protect the institution from being used by criminals.

This course has been designed to deliver best practice guidelines for any institution by drawing on cutting edge experience of what the world’s leading financial institutions are doing, have done and must still do. It covers the minimum requirements, the ideal requirements and considers the impact of imminent legislative and best practice changes.

Who Should Attend?All staff with client facing responsibilities especially those where financial crime is a real and active risk. Risk and compliance professionals and members of the internal audit function. Senior managers and top management would also derive considerable benefit from attending.

Methodology:Workshop style with participation from delegates actively encouraged.

Course Overview

Introduction: ■ What is Financial Crime ■ Predicate Crimes:

• Money Laundering• Terrorist Financing• Evading Sanctions• Tax Evasion• Bribery & Corruption• Fraud• Proliferation

■ What are financial institutions required to put in place – overview

■ What is CDD, KYC, IDV. ■ Who is responsible for FC Compliance? ■ Best Practice/Poor practice ■ Lessons from recent scandals, including

Standard Chartered, BNP Paribas, Lebanese

Canadian Bank & HSBC

The Money Laundering Cycle ■ Placement, Layering, Integration ■ How does this work in practice ■ Transaction profile ■ Important KYC framework ■ Operating guidelines

Who sets the rules and who publishes best practice guidelines? ■ FCA ■ UN ■ EEC ■ USA ■ BIS – Basel ■ UK Treasury


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Course Content


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■ Local Jurisdictions ■ Best Practice Guidelines

• FATF• Wolfsberg Group• Tranparency International• JMLSG• Egmont Group

What must Institutions have in place? ■ The regulatory landscape ■ Rules and Instructions ■ Three lines of defence ■ Escalation process ■ Consent and Tipping Off ■ Risk based due diligence

Sanctions – Brief Overview ■ Who sets them & why are they set ■ Who is impacted ■ What are they ■ OFAC ■ How should an institution screen for them

Risk Based Approach ■ What does this mean ■ How should it work ■ What are the key differences ■ Enhanced Due diligence – what does this

mean

Customer due diligence ■ KYC – getting to know the customer ■ IDV – checking what they say ■ Ultimate Beneficial Ownership ■ PEP’s ■ Source of Wealth ■ Review process ■ Remediation process

Essential Elements of KYC Standards ■ Customer acceptance policy ■ Customer identification ■ General identification requirements ■ The role of supervisors ■ Guidelines for opening accounts ■ Qualitative data ■ Joint accounts ■ Minor accounts ■ KYC for existing accounts

Politically Exposed Persons ■ Definition – formal ■ Definition in practice ■ Why are they a special case ■ Mandatory high risk

■ UBO issues ■ Source of Wealth issues ■ Annual Review issues ■ Imminent changes

Specific Identification & Verification Issues ■ Trust nominee and fiduciary accounts ■ Corporate vehicles ■ Introduced business ■ Client accounts opened by professional inter-

mediaries ■ Non face to face customers ■ Correspondent banking ■ Introduced business ■ Non face to face customers

Trade Finance & Wealth Management - Overview ■ High risk Areas ■ Specific Issues ■ Typologies ■ KYCC, KYCCB & KYCCBC

Constructing the FCC Framework ■ Policies ■ Roles and Responsibilities ■ Senior Management and M.I. requirements ■ The MLRO (or equivalent) challenge! ■ Risk Assessments and Procedures ■ Suspicious transactions ■ Suspicion & Escalation ■ What must banks have in place ■ An effective escalation process ■ Concern ■ Suspicion ■ Access & Process ■ Communication lines ■ Suspicious Activity Reports ■ The importance of a direct link ■ Whistle blowing

Implementing and Managing the Total FCC framework ■ Due diligence (on-going) ■ Annual Review ■ Record keeping ■ Training ■ Monitoring ■ Reporting ■ Questions/Feedback/Discussion

The Future ■ The FCA Style ■ The impact of FATCA ■ 4th EU Money Laundering Directive


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Advanced Credit Derivatives In-House or Live Webinar

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Credit Derivatives attracted strong interest from the investment and banking community over the past 20 years and has been used extensively by banks, mutual and hedge funds, as well as by individual investors. The credit derivatives ability to easily mitigate, transfer or disseminate credit risk has had an essential role in its development, generating considerably growth over the past decade from an estimated $4.5 trillion notional amount in 2004 to an estimated $12 trillion notional amount in June 2016.

Whether it is for arbitraging or for hedging purposes, or for managing economic or regulatory capital, credit derivatives, in their different instrument types and in combinations, have been used successfully both to reduce credit risk and to enhance yield by gaining credit exposure.

This course gives participants the opportunity to gain a comprehensive insight into the credit derivatives market and expand their knowledge on all aspects of structuring, pricing, risk management and trading credit derivatives instruments. The course will enable attendees to find out how experts price and hedge credit derivative instruments to enhance portfolio returns, and understand how to maximize investment or risk mitigation opportunities offered by credit derivatives.

Participants will be provided with the skills and techniques necessary to work with different credit derivatives and get acquainted with the pricing and risk management of credit derivatives.

ObjectivesBy the end of this course, participants will be able to: ■ Define the key credit derivative products, including some of the more complex products such as

Single Tranche Synthetic CDOs, Credit Spread Options etc. ■ State the key issues regarding the processing of credit derivative products and their applications ■ Analyse the risks and rewards of different structures and transactions ■ Determine the advantages and disadvantages of a number of more complex transactions ■ Understand the legal aspects and the documentation ■ Have a thorough understanding of the pricing ■ Measure market risk in credit default swaps

MethodologyTeaching methodology will include discussions, casework and exercises. Participants will participate fully in activities which will ensure understanding and learning.

Participant profilePersons working or having worked in the field of the derived credits and possessing robust bases on credit products. Ideally the participant should have 24 months experience in Treasury and/or Capital Markets.

Course Overview

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Course ContentDay 1

Introduction and recap of basic products and applications ■ Overview of market

• Basic products descriptions• Q&A session

■ Current market developments• Market size and growth• Instruments used• Central Counterparty use

■ Structural changes in the Credit Deriva-tives market • Impact of new regulations• Risk issues

■ Discussion of product range and appli-cations

■ Single name • The mechanics• Concept of credit event• Payout computation

■ Correlation trading• The impact of correlation• Practical computation aspects

■ Current challenges facing the market

Exercises, multiple choice Q&A – recap on basics

Complex Credit Derivatives ■ Beyond single name products ■ Credit Linked Notes - CLNs

• The use of SPVs - Special Purpose Vehicles

• The mechanics of the structure• Legal issues

■ Nth Loss and Nth Default• Correlation impact• Pricing advantages

■ Complex products structuring• Adding more credit-linked underly-

ings• Increasing the number of reference

entities• Re-allocating the risk into different

tranches ■ CDOs and Synthetic CDOs ■ Single Tranche Synthetic CDOs. ■ Credit Spread Options ■ Capital Structure Arbitrage ■ Index Products

• Link with ETFs - Exchange Traded Options

• I-Traxx and other indices ■ Risk Considerations

• Correlation volatility• Jump risk

User Application ■ Risk management ■ Trading applications ■ Investment practicalities ■ User rationale:

• Line and limits management• Risk management• Capital and balance sheet• Trading strategies • Investor benefits

■ Transactions for different user groups:• Bank, • Insurance company, • Corporates • Funds and hedge funds

Case Studies: Putting it all together : worked examples by participants

Day 2

Legal and Documentation ■ Legal environment and documentation in

the credit derivatives market ■ Recent developments ■ ISDA CDS Standard model ■ Standardisation of termination dates ■ Analysis of actual Credit Events ■ Mechanics of the fixed coupon and upfront

payment model ■ Detailed analysis of 2014 Definitions ■ Key differences with the 2003 Definitions ■ Matrix supplement ■ General standardized coupons pricing

approach ■ The use of Master Confirmations ■ Settlement and valuation procedures ■ Novation protocols ■ Outstanding issues ■ Necessary changes for tailor-made trans-

actions

Case study: analyzing and correcting a single name CDS term sheet

Pricing single obligor credit derivatives ■ Examination of the pricing of single oblig-

or credit derivatives ■ Pricing links with credit spreads. ■ Relationship with asset swaps and Float-

ing Rate Notes - FRNs ■ 2 main theoretical approaches ■ The firm value approach ■ The reduced form approach ■ Calibration of model to market prices ■ Worked example – valuing a credit default

swap

Case study: valuing a credit linked note – discussion of the correct solution

■ Pricing basket credit derivatives ■ Pricing of multi-obligor credit derivatives ■ A firm’s value basket model ■ A reduced form (copula) basket model ■ Case study: valuing a first to default bas-

ket swap ■ Discussion of the correct solution ■ Documentation issues ■ Valuation of a Collateralised debt Obliga-

tion - CDO ■ The key role of the equity piece ■ Mezzanine, senior tranches and risk issues ■ Pricing issues for CDO tranche ■ The correlation cascade

Case studies: important considerations for running a credit derivatives business





Advanced Credit Risk TrainingIn-House or via Live Webinar

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Course Overview

Methodology:

The training will be run as a highly interactive workshop session, with detailed examples and case studies. Delegates are free to bring their own cases/examples to the sessions. Delegate participation will be actively encouraged.

Knowledge Pre-requisites:

Ideally, at least a working knowledge of credit risk in a banking environment

Course Content

Day 1: Basel III and its Impact on Credit Risk

Most major banks are now compliant with the capital requirements of Base IIII and are preparing – some better than others – for the full impact of the liquidity, leverage and long term funding source provisions. In addition the impact on credit risk management has been very significant. Almost all banks find their regulators are refusing to allow them to model credit risk at an advanced level for regulatory capital allocation purposes and the regulatory preference is shifting towards a more broad based standardised approach and quantitative leverage measures. This is unsurprising given that during the Banking Crisis the once mighty Royal Bank of Scotland Group managed to generate $2trillion of assets on a capital base of only $50bn despite having a CAR of circa 8%. 40 times the capital base was not what regulators expected! As a consequence, we are in danger of moving back towards Basel 1. This one day session examines the impact of current regulatory thinking on credit risk. Session 1: Introduction

■ Basel and its evolution ■ Vickers – the separation of retail from other

banking ■ The Senior Managers Regime ■ GSIFI’s/GSIBS and domestic SIBS

Session 2: The Basel II/III agreements

■ Improving risk & asset management ■ Aligning regulation and economic realities ■ The technical challenges from a bank/regula-

tors’ point of view ■ How much capital is sufficient capital ■ The 3 pillar regulatory structure

Case Study/ Practical Example

Session 3: Basel III in more depth

■ An overview of the new requirements ■ The new minimum capital requirement ■ Model Generated DDF & CCF ■ Capital conservation buffer ■ Countercyclical buffer ■ Counterparty credit risk ■ Liquidity risk management – LCR and NSFR ■ Timeline and transitional arrangements ■ Leverage Ratio

Case Study/ Practical Example Session 4: Basel & Credit Risk

■ The Basel approaches to credit risk ■ The risk management of credit risk ■ The role of the credit committee ■ The use of rating agencies ■ Default risk using historic information ■ Corporate credit assessment ■ Company risk assessment ■ Basel & model risk ■ Stress testing



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Course Content

Session 5: Risk Adjusted Performance Measurement (RAPM)

■ Optimising the management of financial re-sources

■ Economic Profit and Economic Value Added (EVA)

■ Return on Capital – RAROC, RORAC and RA-RORAC

■ The challenges of enterprise-wide implemen-tation


Session 6: The Revised Standardised Ap-proach to Credit Risk

■ What is it, when will it impact banks? ■ Exposures to Banks ■ Exposures to Corporates ■ External Credit Risk Assessment Approach

(ECRA) ■ Risk weight table for bank exposures under

the SCRA ■ Exposures secured by real estate ■ Other Retail ■ Investments in equity or regulatory capital

instruments issued by banks or securities firms

■ Risk weight add-on for exposures with cur-rency mismatch

■ Defaulted exposures ■ Credit Risk Mitigation

Case Study/ Practical Example Session 7: Instead of Basel IV – What Changes are Likely

■ Senior Manager Responsibility ■ Bond Bail In ■ More Ring Fencing ■ Leverage/Gearing ■ Hybrids as Capital

Practical Examples

Session 8: Wrap Up and Open Forum

Day 2: Advanced Credit Analysis – including IFRS 9

This session will enable delegates to manage and employ the tools used in credit risk & credit analysis to assess individual, sector and portfolio credit risks. It develops the understanding, implementation and employment of a comprehensive framework to assess the critical risk factors affecting corporate borrowers.

There is a detailed description of credit risk analysis, showing how it can be managed by an organisation and explores the key components underlying the process. Some challenging case studies and exercises are used widely to ensure the training is interactive and practical.

Introduction to Analysis

■ What is Credit Analysis ■ Managing credit analysis ■ Setting the objectives and goals of the credit

analyst team ■ Detailed approach to credit analysis, including

individual, sector and portfolio risk ■ Predicting, managing and trading through

Credit Cycles ■ Understanding and employing data derived

from probability of default, loss given default and expected loss data

■ Setting the parameters for system analysisCase Study/ Practical Example Session 1: Advanced Credit Analysis

■ The SLOP Approach ■ Balance Sheet Analysis ■ Connected/Counterparty/Group/Systemic/Cor-

related Exposures ■ P & L Analysis ■ Cash flow analysis ■ Budgets, projections, forecasts ■ Ratio analysis ■ More sophisticated credit tools ■ DCF & PDV

Case study/ Example to illustrate the above Session 2: Assessing Refinancing Risk

■ When should we refinance ■ Forfaiting ■ Securitisation ■ The cash flow waterfall ■ Warranties, terms, conditions ■ EBITDA & other key ratios ■ Security ■ Pricing

Case study/ Example to illustrate the above Session 3: Credit Enhancement Methods

■ Due diligence process and enhanced credit appraisal techniques

■ Credit Scoring models ■ Collateral – the various forms ■ Asset Backed Lending ■ Insurance Options ■ Securitisation





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Course Content

Case study/ Example to illustrate the above

Session 4: Creating Cash Flow Ring-Fenc-ing Structures

■ What do we mean by ring fencing ■ What structures work best ■ Documentation requirements ■ Notice of assignment ■ The challenge of multi banking ■ Policing the process – regular reviews are

essential ■ Escrow Accounts, Pool Accounts, Designated

accounts Session 5: Parent & Subsidiary Rating Link-age

■ Ratings generally ■ Parent company ratings ■ Group ratings ■ Subsidiary ratings ■ How to link the two ■ Best or worst case approach ■ Cross, upstream and downstream guaran-

tees ■ Letters of comfort

Case study/ Example to illustrate the above Session 6: Sovereign Risk & Sovereign Debt

■ How do we measure Sovereign debt ■ External ratings agencies ■ Building an internal model ■ International sources ■ Types of sovereign debt ■ Unusual treatment of Treasury Bills by Basel

III Case study/ Example to illustrate the above Session 7: Company Valuation for Acquisi-tion Finance & Distressed Debt Situations

■ How do we value a company ■ Cash flow methods ■ Profitability methods ■ Balance sheet methods ■ Price earnings methods ■ Valuing distressed debt

Case study/ Example to illustrate the above Session 8: NPLs & IFRS 9

■ Existing definition of an NPL ■ Provisions and interest suspense ■ The impact of IFRS 9 ■ Whole of loan life provisioning ■ Complying with IFRS 9 ■ The impact of IFRS9

Case study/ Example to illustrate the above Session 9: Wrap Up and Open Forum

Day 3: Syndicated Lending

A syndicated loan is usually a large loan offered by a small syndicate or club of banks – often relationship banks. There are normally two primary drivers. First the banks concerned feel the exposure is too big for them to accommodate alone, secondly the client wants to spread the business around its relationship bankers so as not to treat one or more of them unfairly.

This session considers the importance of this type of lending to usually larger clients and the mechanics and techniques involved.

Introduction

■ Overview of market definitions, market statis-tics and transaction timetable

■ Offer documents – the term sheets and intro-duction to documentation

■ The debt market in the context of the capital markets spectrum with case study

■ Rating process and clarification

Session 1: Primary market Dynamics from Pre-Mandate to Mandate Award including Pricing

■ Yield and average life calculations for the loan market

■ Term sheets – assessment from borrower’s viewpoint

■ Evaluating alternative debt solutions with case study

■ Pricing a new transaction: sources of informa-tion

■ Yield calculations using case studiesCase study/ Example to illustrate the above

Session 2: Credit analysis

■ Assessing prime mandates ■ Assessing participating mandates ■ Senior versus junior participations ■ Credit assessment – the theory ■ Credit assessment – the practice ■ Risk Reward Considerations







Course Content

Session 3: Portfolio Management, Market Players, Secondary Markets

■ Portfolio management ■ Capital constraints – commentary and defini-

tions relating to Basel ■ Types of investors in the primary and sec-

ondary loan markets ■ Market makers and characteristics of the

secondary loan market ■ Structures and secondary pricing ■ Comparative pricing, restrictions on trading

and structural complications ■ Secondary pricing case study ■ The documentary process – confirmations,

transfers and completion of a trade ■ Regulations and codes of conduct


Session 4: Evaluation Techniques to Posi-tion the Syndicated Loan Market in Debt Capital Markets

■ Basic principles ■ How to evaluate a specific loan ■ The debt capital markets ■ The banks position in that market ■ Using global or international bank partners ■ Pricing considerations


Session 5: The Importance of Syndicated Loans to Clients

■ Why syndicate ■ Who to syndicate with ■ The importance of syndicate partners ■ Disclosed versus non disclosed syndication ■ Securitisation/Selling down – when is this

possible.Case study/ Example to illustrate the above

Session 6: Other Key Issues

■ Bidding alternatives in preparing the man-date

■ To dissect a term sheet from a borrower’s perspective

■ To review market-clearing pricing trends ■ The latest legal/documentation issues for

syndicated loans ■ To develop a syndicated loan transaction

strategy and present a personalized syndica-tion analysis

■ To mitigate syndication risks


Day 4: Project Finance

A text book definition of Project Finance reads: “The raising of finance on a Limited Recourse basis, for the purposes of developing a large capital- intensive infrastructure project, where the borrower is a special purpose vehicle and repayment of the financing by the borrower will be dependent on the internally generated cashflows of the project” This session examines the role and availability of project finance in the current market place. This is not a mathematical course although we must consider projections, cash-flows and balance sheet analysis to an appropriate level. Instead, we will concentrate on the main principles including a thorough review of the roles of the different parties in the transaction, an examination of the four different phases of the project, the risks in all their various guises, the methodology behind the construction of the cashflows and the techniques deployed in their evaluation. We also examine the structure of the transaction, the legal and documentation aspects, the essential due diligence procedures and most importantly the source of repayment

Session: Project Finance Overview

■ Bidding alternatives in preparing the mandate ■ Contrast with other forms of limited recourse

financing ■ The rationale for using project finance and

trends ■ Who is involved ■ Syndication or sole sources ■ Third party interests ■ Government interests ■ PPI schemes


Session 1: Project Finance Refresher

■ Definitions & Principles ■ Suitable Lending policies ■ Suitable projects ■ Syndication & Participation ■ Risk/reward ■ Credit Implications


Session 2: Project Costs

■ Quality & Accuracy of estimates

Advanced Credit Risk Training




Course Content


■ What is a cost plan; preparation and limita-tions

■ Provisional sums, allowances & contingen-cies

■ Dealing with exclusions ■ Value engineering ■ When to walk away


Session 3: Funding

■ Cashflows before after and during comple-tion

■ Equity or quasi equity investment ■ Debt versus equity ■ Co-funding & contingent agreements ■ Covering funding shortfalls ■ Appropriate debt structure and terms ■ Managing exposure and maximising secu-

rity ■ Dealing with problems

Session 4: Ownership Structures

■ What type of structure ■ Considerations in selecting a structure ■ Project finance structures ■ Special Purpose Vehicle (“SPV”) ■ General and limited partnerships ■ Joint Ventures

Session 5: Sources of Funding

■ Options ■ Types of equity and debt ■ Methods of obtaining finance ■ Structure of capital markets ■ International issues

Session 6: Other Key Topics

■ Funding sources & credit criteria ■ Case studies, risk profiles and structuring

protocols ■ Simulate, arrange and document project

financings ■ Construct a project finance cash flow model ■ Capitalise on the new horizons for projects

and funding sources

Session 7: Wrap Up and Open Forum

Day 5: Problem Loans & Distressed Debt Restructuring

This session is designed to hone the skills required to manage and operate a credit and

loan portfolio and restructuring system that identifies winners from losers and delivers real prospects of higher recoveries. The emphasis is on the practical as well as the theoretical with numerous examples and case studies throughout the course as well as in depth discussions so that delegates can pool their experiences and learn from both mistakes and successes

Introduction: What goes wrong and how to spot and prevent it

■ The “big five” causes of debt servicing difficul-ties

■ The importance of initial data gathering ■ Early signs and how to spot them ■ Systems/strategies for monitoring potential

problems ■ Risk/reward considerations ■ Security and when to call/enforce it

Example using archive case, followed by debrief and discussion.

Session 1: Introduction to loan workout, pol-icy & restructuring

■ Loan Grading ■ Loan Review – Assessing survival ■ Bankruptcy/Insolvency option ■ Work out strategies ■ Planning the process ■ Setting up procedures ■ Responsibilities ■ The case for legal action and how to manage

itExample using FGB archive case, followed by debrief and discussion.

Session 2: Reaction To Default or Imminent Default

■ When is it worth intervening ■ Facing up to the situation, both bank and bor-

rower ■ Syndicated Loans ■ Multi banked clients ■ Multi layered relationships – several services

provided ■ Proportionality ■ The danger of “personalising” collections ■ Taking a commercial, non-emotive view ■ WIIFM?


Session 3: Initial Steps

■ Immediate action ■ Liquidation versus non liquidation




Course Content


■ Ditto Bank Receiver versus client as Receiver ■ Syndicated and multi banked loans ■ Excel work out models ■ Options for lender & borrower ■ Cost benefit analysis and risk reward consider-

ations ■ Systemic considerations ■ Strategic, national , political or reputational

issuesExample using archive case, followed by debrief and discussion.

Session 4: Assessing the Prospects of Suc-cess

■ Will restructuring help/work ■ Creating a repayment model ■ Stress testing the models ■ Sensitivity analysis ■ Valuation of distressed assets including secu-

rity ■ Going versus gone concern analysis ■ Making provisions ■ Setting benchmarks ■ Developing a bankers cash flow


Session 5: Remedial Management

■ Systems, process, control, monitoring & imple-mentation

■ Evaluation, strategies, alternatives. ■ Dealing with the terminally ill ■ Valuing security, current, on-going and future ■ Making provisions ■ Interest suspense

Example using archive case, followed by debrief and discussion

Session 6: When to give up

■ Basic considerations ■ Risk/reward ■ The dangers of personalising the process ■ Signs that it is hopeless ■ Public/moral duty versus cost ■ Recording write offs ■ Managing write offs ■ The role of external agencies

Example using archive case, followed by debrief and discussion

Session 7: Other Key Topics

■ Identify what is causing borrowers problems and provide the most appropriate and cost effective solution

■ To provide solutions unique to the sector in

which the company operates ■ Initial analysis: the use of liquidation models

to assess each stakeholder’s economic interest ■ To restructure the balance sheet of a highly

leveraged company ■ How the bank’s collateral performs when the

borrower is in distress

Workshop Conclusion, Wrap Up & Open Fo-rum



Course Content

Advanced Equity DerivativesIn-House or via Live Webinar

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Course Overview

This programme has been designed to provide a thorough overview of equity derivatives products, pricing, risk management and applications. We will use real life case study examples to illustrate the techniques and strategies that are used by both “buy side” and “sell side”.

Participants will require laptops with MS Excel for the exercises and case studies.

The broad objectives of the programme are:

■ To provide a complete understanding of the properties and risk profiles of equity derivative products.

■ To provide participants with a thorough understanding of the applications of equity derivatives so that they have the ability to advise their clients on strategies that may be used to meet spe-cific investor requirements.

■ To provide participants with a thorough understanding of pricing techniques used in equity de-rivatives. This will give participants a good understanding of whether prices quoted are fair.

■ To provide participants with a thorough understanding of the risk management processes and techniques used in equity derivatives. This will allow participants to explain risk reward expecta-tions to investors and better manage risks in their own portfolios.

■ To provide participants with a thorough understanding of the trading and investment strategies and techniques used in equity derivatives. This will allow participants to match products to their market expectations and risk profiles.

■ To explain to participants how collateral management works through the process of VaR, mark-ing positions to market and margin management. This will give prime brokers a better under-standing of the role of collateral in risk reduction. It will also allow fund managers to plan for future cash flow movements in their funds and keep liquidity requirements to a minimum.

Content A short recap of the properties and risk/reward profiles of equity derivative products?

■ Derivative Products• Futures

ӹStock Index Futures ӹSingle Stock Futures

• Options ӹSingle Name Stock Options ӹStock Index Options ӹPath Dependent Options ӹWarrants

• Swaps ӹEquity Swaps ӹVariance Swaps

Exercise for Module 1

Participants will be asked to explain the properties and risk reward profiles of a series of equity derivative products.

Who might use equity derivatives and why? This module examines the uses of the products by both traditional fund managers and hedge funds.

■ Derivative Products• Stock index futures

ӹUsed by traditional fund managers to hedge portfolio risk and change asset allocation ӹUsed by macro hedge funds to speculate on future value of the stock market

• Single Name Equity Options ӹUsed by both traditional fund managers, equity long shorts and hedge funds for: ӹDirectional trading ӹHedging of risk ӹPlacing risk into a collar ӹYield enhancement

• Stock Index Options ӹUsed by both traditional fund managers and hedge funds for:

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Course Content

ӹDirectional trading ӹPortfolio hedging ӹVolatility trading

• Equity swaps ӹUsed by both traditional fund managers and hedge funds for: ӹDirectional trading ӹPortfolio hedging ӹEquity pairs trading


Participants will be provided with a series of market expectations and trade criteria and be asked to choose an equity derivative product to use, giving their reasons and expected outcomes over a range of asset prices at maturity.

How are equity derivatives priced? This module examines pricing of the products.

■ Futures contracts by a combination of • Buying the underlying asset • Financing the purchase of the underlying

assets• Receiving dividends on the underlying

asset ■ Options using a variant of Black-Scholes

Pricing model which requires inputs for:• Stock price• Interest and dividend returns• Stock price volatility

■ Equity Swaps, by calculating the present value of the future cash flows from the underlying equity and the interest funding costs


Participants will be provided with a set of market asset prices, interest rates, volatilities and dividend expectations and will be asked to price various products. For this exercise participants will be given a pricing model for options but will be expected to build their own pricing model for the Delta 1 products.

Day 2

How are equity derivatives risk managed? ■ Equity Delta 1 instruments

• VaR ■ Options

• Delta and gamma silos for underlying

stock price risk• Vega ladders for volatility risk• Phi and rho for interest rate and dividend

risk• Theta for the impact of time decay


Participants will be provided with a set of market asset prices, interest rates, volatilities and dividend expectations and will be asked to project the expected profit or loss (risk) for various products as a result of changes in market conditions. For this exercise participants will be given a risk analytics programme for options. For Delta 1 products they will expand the model that they built in Module 3 to incorporate “what if” scenario analysis.

Trading Strategies. This module discusses how to choose a strategy to fit a market expectation.

■ Equity delta 1 products• Directional strategies• Pairs trading – long short

■ Options• Directional trading• Volatility trading• Spread trading• Income enhancement


Participants will be provided with a series of market expectations and trade criteria and be asked to choose a strategy to use, giving their reasons and expected outcomes over a range of asset prices at maturity.

Life cycle of a trade and collateral management including examples of mark to market. This module provides an in-depth analysis of risk and collateral management to ensure that participants understand how risk is reduced.

■ Trade execution• Request for quote from the buy-side• Price construction from the sell-side

■ Mark to market for single stock and indices• Changes in stock price• Dividend income and financing cost (carry)

■ Mark to market for futures and equity swaps





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Course Content• Changes in stock price• Dividend income and financing cost

(carry)• Changes in interest rates• Passage of time

■ Options• Change in stock price• Changes in volatility• Changes in interest rates and dividend• The passage of time


Participants will choose one of the strategies from Module 5 and calculate the VaR and initial collateral requirement and haircut and then execute the strategy. They will then mark the strategy to market and manage the collateral over these two marks. One of the marks will be for a profitable market movement and the other for a losing market movement. They will then close the trade out and calculate the final profit or loss and manage the close out of the strategy and the return of the collateral.





Course Content

Advanced Financial Analysis TrainingIn-House or via Live Webinar

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Course Overview

Understanding financial statements and forecasts used to analyse and value businesses is fundamental to the role of any analyst or investor. Unfortunately companies at times have incentives to manipulate their reported results (for better or worse) that are not aligned with investors in the business.

This course helps the participants to understand firstly, the main types of manipulation that take place in practice (including recent public company examples), then looks at how these types of manipulation can be identified and an assessment of the quality of a company’s financial reporting arrived at through the use of analytical techniques.

The course deals with numerous accounting issues and provides the latest state of accounting under IFRS and US GAAP. This course is run in an interactive, participative format, where participants learn by doing. The key concepts covered in the main teaching sessions are punctuated and illustrated by detailed case and modelling work.

The approach has been designed to equip participants to put key concepts into practical use immediately.

By the end of this course participants will understand:

■ The key methods used to manipulate financial statement and forecasts ■ How to analyse historic financial statements using advanced ratio analysis to assess the quality

of the financial reporting and the financial health of the business ■ How to analyse and assess financial forecasts using different accounting issues

Much of the course work involves Excel modelling and analysis, equipping participants with the tools to analyse financial models:

■ Building up from partially-complete models ■ Working with integrated financial statements ■ Running scenarios, iterating and optimising

Each participant should bring a lap top with USB port to the course to facilitate modelling work

Day 1Accounting overview – where manipulation and fraud commonly take place

■ Conditions that may result in accounting manipulation• Incentives and pressures to manipulate• Opportunity• Attitude of management

Case study – Analysing the conditions for fraud – Enron

Common forms of manipulation and fraud – income statement

■ Revenue recognition issues• When is a sale not a sale• Accounting rules governing revenues• Earning revenue – principal or agent?• The problems with long term contracts

■ Abnormal sales growth, the Symbol effect ■ Revenue recognition red flags

Case study – The participants analyse a case company’s accounting for revenue and suggest adjustments to correct manipulation


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Course Content

Case study – Symbol Inc

■ From revenue to EBIT• Increasing income from one off events• Misleading classifications• Capitalising interest

■ Manipulation of cost of goods sold• Cost deferral and impairments

■ Inventories, growth vs sales and valuation issues

■ EBIT manipulation red flags

Case study – Enron red flags

■ Other income statement issues ■ Shifting current expenses to a later period

• Identifying capitalisation issues

Case study – Thomson Research

■ Techniques to hide expenses or losses ■ Shifting current income to a later period ■ Shifting future expenses to an earlier period

Case study – Xerox

Day 2

Evaluating the quality of financial reporting – ratio analysis

■ Quantitative tools used to assess financial reporting quality

■ Dupont analysis• ROE and ROCE analysis• Extended Dupont analysis

■ Further ratio analysis• Working capital and asset based analysis• Assessing divisional performance• Credit based analysis • Altman z scores• Accruals based analysis

Case study – The participants analyse the case study company and produce the first set of ratios to assess the quality of the financial reporting to identify where the accounts may have been manipulated

Case study – The participants analyse a case company’s accounting for further income statement issues and suggest adjustments to produce a “clean” set of historic numbers

Common forms of manipulation and fraud – balance sheet

■ Long life assets• What does an asset cost?

■ Amortisation and depreciation issues• Asset lives and depreciation rates

Case study – The participants analyse a case company’s accounting for PPE and Intangibles for manipulation

■ Off balance sheet financing• Accounting for leases – the operating lease

disappears• Treatment of leases for valuation purposes• Liability calculation• Balance sheet adjustments• Treatment effects on financial ratios

■ Pension accounting – income statement and balance sheet issues• Accounting for pensions• Correct allocation of costs – EBIT or not• Which liability and effect on valuation• Treatment effects on financial ratios

Day 3

Common forms of manipulation and fraud – balance sheet (continued)

■ Financial instruments – recognition and valu-ation• The after effects of the financial crisis – new

accounting rules for financial instruments• Fair vs historic cost – assessment and ef-

fects on valuation• Treatment effects on financial ratios

Case study – The participants analyse a case company’s accounting for various balance sheet items and suggest adjustments to correct manipulation

■ Foreign currency issues – translation and transaction effects• Which currency to use• Calculation of translation effect• Implications for valuation• Treatment effects on financial ratios

Case study – The participants analyse a case company’s accounting for various balance sheet items and suggest adjustments to correct manipulation





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Course Content

Common forms of manipulation and fraud – cash flow

■ Picking up the trail – earnings vs cash ■ Operating vs other cash flows – improving

cash conversion ■ Manipulating working capital for cash flow

• Receivables• Payables

■ Accounting for cash and the quality of cash holdings• Does the cash exist?• Polly Peck and Cyprus

Case study – The participants analyse a case company’s accounting for various cash flow statement items and suggest adjustments to correct manipulation





Course Content

Advanced Foreign Exchange Derivatives TrainingIn-House or via Live Webinar

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Course Overview

This programme has been designed to provide a thorough overview of FX derivatives products, pricing, risk management and applications. We will use real life case study examples to illustrate the techniques and strategies that are used by both “buy side” and “sell side”.



■ To provide a complete understanding of the properties and risk profiles of FX derivative prod-ucts.

■ To provide participants with a thorough understanding of the applications of FX derivatives so that they have the ability to advise their clients on strategies that may be used to meet specific hedging, trading and structuring requirements.

■ To provide participants with a thorough understanding of pricing techniques used in FX deriva-tives. This will give participants a good understanding of whether prices quoted are fair.

■ To provide participants with a thorough understanding of the risk management processes and techniques used in FX derivatives. This will allow participants to explain risk reward expectations to investors and users and better manage risks in their own portfolios.

■ To provide participants with a thorough understanding of the trading, hedging and investment strategies and techniques used in FX derivatives. This will allow participants to match products to their market expectations and risk profiles.

■ To explain to participants how collateral management works through the process of VaR, mark-ing positions to market and margin management. This will give prime brokers a better under-standing of the role of collateral in risk reduction. It will also allow fund managers to plan for future cash flow movements in their funds and keep liquidity requirements to a minimum.

Day 1

A short recap of the properties and risk/reward profiles of FX derivative products?

■ Derivative Products• Futures

ӹOutright Forward Contracts ӹNon Deliverable Forwards ӹCurrency Futures

• Options ӹConventional Currency Options ӹBarrier Options ӹWarrants

• Swaps ӹFX Swaps ӹCurrency Swaps


Participants will be asked to explain the properties and risk reward profiles of a series of FX derivative products.

Who might use FX derivatives and why? This module examines the uses of the products by both corporations, traditional fund managers and hedge funds and high net worth individuals.

■ Derivative Products• Currency Futures and Outright Forwards

ӹUsed by corporations to hedge translation and transaction FX exposure ӹUsed by traditional fund managers to


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Course Content

hedge FX risk in portfolios and change currency asset allocation ӹUsed by macro hedge funds to spec-ulate on future value of the currency pairs

• Currency Options and Barrier Options ӹUsed by corporations, traditional fund managers, and hedge funds for: ӹDirectional trading ӹHedging of risk ӹPlacing risk into a collar ӹYield enhancement ӹVolatility trading

• FX swaps ӹUsed by banks and corporations for: ӹAsset allocation ӹFinancing mismatched loan and deposit books

• Currency swaps ӹUsed by high grade issuers in a bond and swap structure


Participants will be provided with a series of market expectations and trade criteria and be asked to choose an FX derivative product to use, giving their reasons and expected outcomes over a range of spot prices at maturity.

How are FX derivatives priced? This module examines pricing of the products.

■ Futures and Outright Forward contracts by a combination of • Buying the base/pricing currency and

selling the pricing/base currency • Financing the position with currency repo• Deriving the fair forward price by the

maturity cash flows (interest rate parity)• By using swap points that are traded

in the market as a product in their own right

■ Options using a variant of Black-Scholes Pricing model which requires inputs for:• FX spot rate• Two sets of interest rates• Implied volatility

■ Currency Swaps by decomposing into:• An exchange of principal• Two interest rate swaps• A basis swap


Participants will be provided with a set of spot prices, interest rates, volatilities and will be asked to price various products. For this exercise participants will be given a pricing model for options but will be expected to build their own pricing model for the Delta 1 products.

Day 2

How are FX derivatives risk managed?

■ FX Delta 1 instruments• VaR

■ Options• Delta and gamma silos for underlying FX

price risk• Vega ladders for volatility risk• Phi and rho for interest rate risk• Theta for the impact of time decay• Second order Greeks for portfolio manage-

ment ӹVanna, vomma, charm, vera and DvegaD-time

• Special risks associated with barrier options ӹ Inverting volatility ӹPin risk


Participants will be provided with a set of spot prices, interest rates, volatilities and market expectations and will be asked to project the expected profit or loss (risk) for various products as a result of changes in market conditions. For this exercise participants will be given a risk analytics programme for options. For Delta 1 products they will expand the model that they built in Module 3 to incorporate “what if” scenario analysis.

Trading Strategies. This module discusses how to choose a strategy to fit a market expectation.

■ FX delta 1 products• Directional strategies

■ Options• Directional trading• Volatility trading• Spread trading• Income enhancement





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Course Content


Participants will be provided with a series of market expectations and trade criteria and be asked to choose a strategy to use, giving their reasons and expected outcomes over a range of spot prices at maturity.



■ Mark to market for futures, outrights and FX swaps• Changes in spot price• Financing cost (carry)• Changes in interest rates• Passage of time

■ Options• Change in spot price• Changes in volatility• Changes in interest rates • The passage of time

Exercise for Module 6arket and manage the collateral over these two marks. One of the marks will be for a profitable market movement and the other for a losing market movement. They will then close the trade out and calculate the final profit or loss and manage the close out of the strategy and the return of the collateral.





Course Content

Advanced Interest Rate DerivativesIn-House or via Live Webinar

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Course Overview

This programme has been designed to provide a thorough overview of interest rate derivatives products, pricing, risk management and applications. We will use real life case study examples to illustrate the techniques and strategies that are used by both “buy side” and “sell side”.



■ To provide a complete understanding of the properties and risk profiles of interest rate deriva-tive products.

■ To provide participants with a thorough understanding of the applications of interest rate deriva-tives so that they have the ability to advise their clients on strategies that may be used to meet specific hedging and trading requirements.

■ To provide participants with a thorough understanding of pricing techniques used in interest rate derivatives. This will give participants a good understanding of whether prices quoted are fair.

■ To provide participants with a thorough understanding of the risk management processes and techniques used in interest rate derivatives. This will allow participants to explain risk reward expectations to investors and traders and better manage risks in their own portfolios.

■ To provide participants with a thorough understanding of the trading and hedging strategies and techniques used in interest rate derivatives. This will allow participants to match products to their market expectations and risk profiles.

■ To explain to participants how collateral management works through the process of VaR, mark-ing positions to market and margin management. This will give prime brokers a better under-standing of the role of collateral in risk reduction.

Day 1

A short recap of the properties and risk/reward profiles of interest rate derivative products?

■ Derivative Products• Futures and Forwards

ӹSTIR Futures ӹBond Futures ӹForward Rate Agreements (FRAs)

■ Options• Interest Rate Options on:

ӹSwaps – Swaptions ӹShort Term Interest Rates ӹCaps and Floors ӹOptions on STIR and Bond Futures

■ Swaps• Interest Rate Swaps• Currency Swaps• Overnight Index Average Swaps• Basis Swaps• Inflation Swaps

Exercise for Module 1Participants will be asked to explain the properties and risk reward profiles of a series of interest rate derivative products. Who might use interest rate derivatives and why? This module examines the uses of the products by both traditional fund managers and hedge funds.

■ Derivative Products


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Course Content

■ STIR futures and FRAs ӹUsed by hedgers to change short term interest rate risk from fixed to floating or vice versa ӹUsed by macro hedge funds to specu-late on the future direction and level of short term interest rates

■ Bond futures ӹUsed by fund managers to manage duration risk and hedge against future changes in the shape of the government yield curve ӹUsed by macro hedge funds to specu-late on future direction and level of long term interest rates and the shape of the yield curve

■ Interest Rate Options• Used by companies, traditional fund

managers, banks and hedge funds for: ӹHedging of interest rate risk ӹDirectional trading ӹPortfolio hedging ӹVolatility trading ӹ Income enhancement ӹ Interest Rate Swaps

• Used by companies, traditional fund managers and hedge funds for: ӹHedging of interest rate risk ӹDirectional trading ӹPortfolio hedging ӹCurve trades ӹAsset and liability management

■ Inflation swaps• Used by companies to hedge against

future inflation risk• To trade future expected levels of infla-

tion ■ Asset swaps

• Used by investors to access floating rate returns from fixed rate securities


Participants will be provided with a series of market expectations and trade criteria and be asked to choose an interest rate derivative product to use, giving their reasons and expected outcomes over a range of interest rates at maturity.

How are interest rate derivatives priced? This module examines pricing of the products.

■ Futures contracts by a combination of • Supply and demand in the market• Theoretical arbitrage pricing by buying

the long interest rate• Selling the short interest rate•

• Amortizing the surplus or deficit cash flows over the contract period

• By deriving forward rates from the interest rate swaps curve

■ Options using an option pricing model which requires inputs for:• Long and short term yield curves• Interest rate price volatility• Time to maturity


Participants will be provided with a set of interest rates and volatilities and will be asked to price various products. For this exercise participants will be given a pricing model for options but will be expected to build their own pricing model for the Delta 1 products. Day 2

How are interest rate derivatives risk managed?

■ Delta 1 products• VaR• Duration, convexity and DV01• Default risk, recovery rates, credit spreads

and CS01 ■ Options

• Delta and gamma silos for underlying inter-est rate risk

• Vega ladders for volatility risk• Theta for the impact of time decay


Participants will be provided with a set of interest rates, credit spreads and volatilities and will be asked to project the expected profit or loss (risk) for various products as a result of changes in market conditions. For this exercise participants will be given a risk analytics programme for options. For Delta 1 products they will expand the model that they built in Module 3 to incorporate “what if” scenario analysis.

Trading and hedging strategies. This module discusses how to choose a strategy to fit a market expectation.

■ Interest rate swaps• Interest rate directional trades• Carry trades• Steepeners and flatteners





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Course Content• Butterflies• Hedging interest rate risk• Converting assets and liabilities from

fixed rate to floating rate ■ Options

• Directional trading• Volatility trading• Spread trading• Income enhancement


Participants will be provided with a series of market expectations and trade or hedge criteria and be asked to choose a strategy to use, giving their reasons and expected outcomes over a range of interest rates at maturity.



■ Mark to market for futures and interest rate swaps• Changes in interest rates• Passage of time

■ Options• Change in interest rates• Changes in volatility• The passage of time


Participants will choose one of the strategies from Module 5 and calculate the VaR and initial collateral requirement and haircut and then execute the strategy. They will then mark the strategy to market and manage the collateral over these two marks. One of the marks will be for a profitable market movement and the other for a losing market movement. They will then close the trade out and calculate the final profit or loss and manage the close out of the strategy and the return of the collateral.





Course Content

Advanced Risk Management Training for Private BankersIn-House or via Live Webinar

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Course Overview

This course aims to cover the portfolio levels issues in the various divisions of the Banks. Primary focus will be on the corporate lending arena and in the private bank leading on to the credit risk management relating to industry, and country risks.

Participants will cover credit risk management techniques as department heads of syndication teams, sector-heads etc. Emphasis will be on practical issues relating to arriving at credit policies in a bank. The concepts and methodologies developed in advanced IRB ( Internal risk Rating Based-approach) capital requirements of Basel 2 will be covered.

The course seeks to cover the credit risk management in various stages of growth of the Bank, the different approaches taken in the corporate, consumer and private bank, the techniques involved in managing a merger between banks and the steps taken in managing the recovery situation when there are significant bad debts.

Day One

Introduction

■ Convergence of Capital Measurement and Capital Standards

■ Banking Securities and financial Subsidiaries ■ Insurance Entities ■ Commercial Entities - big industrial Groups

Minimum Capital Requirements

■ Regulatory Capital ■ Risk-Weighted Assets ■ Constituents of Capital- Tier 1, Tier 2 and

Tier 3 ■ Detailed Analysis for the various products

Credit Risk

■ Standardised Approach ■ Treatment of off balance Sheet items ■ Advanced Credit Mitigation Techniques ■ Dealing with the principles behind the math-

ematics ■ Guarantees and Derivatives

Portfolio credit risk

■ Syndicated deals ■ Managing the credit risk ■ Stress Testing ■ Valuing the portfolio ■ Securitised deal

Day Two

Corporate, Sovereign and Bank Exposures

■ Derivation of Probability of Default (PD), Loss Given Default (LGD), Exposure at Default (EAD)

■ Correlation ■ Maturity Adjustments ■ Risk Weights for Specialised Lending ■ High Volatility Commercial Real EstateCap-

ital Requirement for Hedged and Unhedged Exposure

Ratings Approach

■ IRB Model ■ External Rating Model ■ Product and Facility rating ■ Efficiency vs Risk ■ Group Study: Example of defining the rating

model for housing loans, credit cards, SME loans, property development loans. Use of Excel and Power Point necessary for pres-entation


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Advanced Risk Management Training for Private Bankers


Course Content

Preparation of Credit policy

■ Participants are expected to bring their banks credit policies for discussion

■ Organisation Structure ■ Delegation of Authority ■ Checks and Balances ■ Flow of Credit request ■ Real strength of collective decision making ■ Main constituents in arriving at a Credit

Policy of a Bank ■ Dynamic monitoring

Restructuring Assets

■ Provisioning ■ Estimate of Hair-cuts ■ Determinants ■ Value of distressed asset ■ Managing debt equity swaps, credit deriva-

tives etc ■ Investigative auditing


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Course Content

Advanced SWAPS CourseIn-House or via Live Webinar

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Course Overview

This course, aimed as it is at those dealers, sales, middle office and support staff who already have a good basic knowledge of swaps, will enhance and deepen the understanding of this successful group of products. Participants will leave having a level of comfort that they can cope with these products on a day-to-day basis and that they understand their pricing and usage.

In addition, delegates will understand the market environment and product limitations and liquidity issues.

Review of Swap Pricing

■ Relationship between swaps, Government yields, and the “Libor” concept.

■ Issues in cross-currency swaps vs IRSs. ■ Documentation issues.

The Zero-Coupon Curve

■ Creation of the zero-coupon curve and its uses in pricing swaps

■ Isolation of forward yield curves ■ Use in pricing forward start swaps and

swaptions

Marking to Market

■ Prudent marking to market. ■ Liquidity issues. ■ Uses of the zero-coupon curve. ■ Unwinding swaps, “tear-ups, and assign-

ments

Traditional Swap Variations

■ Construction and pricing of swap variations ■ Forward start swaps ■ Amortising and accreting swaps (and roller

coasters) ■ Currency swaps without exchange of princi-

pal ■ Marking these products to market and li-

quidity.

Short-Date Swaps

■ SONIAs, EONIAs ■ Pricing mathematics

Asset Swap Packages

■ Using swaps to create enhanced-return in-vestment vehicles

■ Tax efficiency aspects

Advanced Swap Constructions

■ Quanto (differential) swaps ■ Total return swaps ■ Other exotic swaps

Caps, Floors & Collars

■ Basic option pricing concepts ■ Application to the long-term yield curve and

thus to swaps ■ Relationship of caps, floors and collars to

swaps

Trading Strategies in Swaps

■ The risk/reward profile ■ The concept of the efficient frontier. ■ Arbitraging the market; traditional and model

based.


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Course Content

Aircraft Financing: Leasing & Financial EvaluationIn-House or via Live Webinar

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Course Overview

The course is designed to support middle- and senior-level employees dealing with financial models from different sources, to enable them to assess risk, profile debt and sensitise modelled data for use in aircraft finance evaluations.

AimsThe principal aim of the course is enable participants to assess the cash flow profile, returns and risks in a financing proposal, and use these skills to support credit approvals, documentation and reviews. This will be done by reviewing the principles behind the buy vs lease decision, and using tools to highlight areas of risk and to perform sensitivity analysis.

MethodologyThe learning methods used are a combination of the didactic and practical; the principles will be discussed with the aid of examples and new learning cemented effectively through practical exercises. Suggested solutions to each exercise will be provided and discussed, and participants will be encouraged to review their work independently. As the time available is very limited, each section will not be covered in depth, but supporting materials will be available for further in-depth learning and post-training refreshing. Participants will:

■ Briefly revise financial mathematics ■ Learn about the lease against buy decision ■ Learn about maintenance reserve accounts ■ Work through advantages and disadvantages of lease vs buy ■ Understand risk profiles ■ Gain an appreciation of leveraged leasing ■ Gain an understanding about evaluating options in aircraft finance

Participants will require a laptop with a USB port.

Session 1 - Introduction & Course Objectives ■ Brief review of aircraft financial evaluations

and their objectives

Session 2 – Brief Revision of Financial Mathematics ■ Principles of time value of money ■ Opportunity cost ■ NPV & IRR - what do they mean? ■ Use of residual values ■ Impact of tax on financial calculations

Exercise – from a given set of cash flows,

calculate NPV, IRR; then add the effect of a residual value and a given tax rate

Session 3 – The Lease vs Buy Decision for Aircraft Finance ■ Cash flow ■ Tax issues ■ Certainty of cost ■ Weak vs strong balance sheets ■ Alternative investments ■ Strategic reasons

Session 4 – The Lease vs Buy Analysis for Aircraft Finance ■ How to work out the cost of finance

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Course Content

■ Calculating cash flows ■ Tax–deductibility of payments ■ Capital allowances for taxation ■ Applying financial maths to calculate and

analyse the cash flows

Exercise – from a given set of criteria, perform a lease vs buy analysis

Session 5 – Maintenance Reserve Accounts in Aircraft Finance ■ Principle underlying concept of MRAs ■ Cash flow impact of MRAs ■ Timing of payments

Exercise – from the previous calculations, add an MRA into the calculation and re-calculate the results

Session 6 – Evaluation of Aircraft Finance Proposals ■ Sensitivity analysis ■ Set up and tools that make the analysis eas-

ier ■ Cash available for debt service (“CFADS”)

and free cash flow (“FCF”) ■ Ratios used by banks:

• Debt service coverage reserve ratio (“DSCR”)

• Interest cover ratio (“ICR”)• Lease payment cover ratio• Debt to EBITDA

■ Exposure vs value calculations

Exercise – from a pair of given cash flows and debt profiles, calculate the above ratios and contrast the two deals

Session 7 – Leveraged Leasing in Aircraft Finance ■ Use of debt and 3rd-party participation ■ Transfer of capital allowances to 3rd parties

Example - review an example of a leveraged lease

Session 8 – Risk Analysis in Aircraft Finance ■ Identifying critical risks ■ Using probabilities to assess risk ■ Quantifying risk ■ Calculating weighted average risk values ■ Example of a risk model ■ Statistical techniques – eg Monte Carlo anal-

ysis

Exercise – from previous exercises, perform a risk analysis using the above format Session 9 - Wrap-Up ■ Overall review ■ Key points to re-iterate ■ Final questions and issues to discuss


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Course Content

Bank Card BusinessIn-House or Live Webinar

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Course Overview

Objectives

In Retail Banking, the bank card business is very important in Europe.

Reducing use of cash and cheques, improving security using the chip technology, developing new payment methods (card based or network money) everything is changing at a very high speed. The card business, be it debit or credit card, is also a commercial matter for improving client services and client satisfaction, an excellent technique in order to improve commissions charged and so the ROI.

This seminar aims at highlighting important issues in retail banking about the existing and new payment methods, with a main stress on bank cards.

Factual cases will be studied and discussed.

MethodologyThe seminar is interactive including presentations and transfer of information, exchange of views, practical cases and experience.

Who Should AttendAll bank executives; Central Bankers, Bank and finance Supervision Departments, Financial Markets Authorities, Other Financial Regulatory authorities, Audit firms and departments; Bank Association and other professional bodies related to the financial markets. Executives of financial departments of companies linked to the banking world.

Day 1

Introduction ATM

■ Atm’s offering a lot of new banking services POS

■ existing and new cards

Strategic choices and new trends Powering multibrand cards

■ protect the image of the bank with distinc-tive branding

■E-money: New payment methods? (Possibilities, Services, costs, demo)

■ Card based payments ■ Network money Mobile payments ■ Peer to peer payments ■ Friends to family payments ■ Social networks and their payments

The value chain in electronic payments

■ description of components of the chain ■ optimisation of the components ■ new developments

Discussion

Prudential approach in bank card business

■ Risk management ■ Cross border aspects ■ Risk policy ■ Laws and legislation ■


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Course Content

Day 2

The client and the marketplace

Marketing and commercial trends

■ what will the future bring us ■ what new services are to be expected Action

in developing countries ■ what is happening in Africa? ■ what developments do we find in India ? ■ how does Brazil do mobile banking ? New

model of competition ■ who are the new competitors ■ what exceptional services do they offer

Hold back the invisible enemy Threads

■ types of dangers ■ identify the loopholes ■ phishing, spoofing and whaling Safeguards ■ for every thread there is a safeguard ■ Security policy ■ define a security policy ■ examples of models of security policies

Case study and Hand over

Training (needs , organisation and content) Management

■ Technical staff Commercial staff ■ Staff in Auditing and Controlling ■ Back Office staff Clients

Discussion

Operations (overview, description and examples)

■ Transactions Cost of operation

General summary

■ Sources of information ■ Conclusion


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Bankers’ Challenges in Electronic Banking,Management Perspectives

In-House or via Live Webinar

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Course Overview

Objective

Banking on the Internet and on mobile devices (electronic banking) is nowadays already an everyday tool for millions of persons. Operating direct on the stock exchanges is no more limited to experts. Even wallets are turning out to be used more electronically.

Banking over the mobile phone (mobile banking) starts to be nowadays a usual tool for many persons. Getting your account balance via alerts, making micro-payments in shops or to friends, creating savings for the unbanked customers, … A lot is moving fast for financial (e.g. banks) and nonfinancial agents (e.g. telecoms) in these new channels.

This can generate a lot of questions:

■ What are the risks of these new developments and how to tackle them? ■ What type of new legislation do regulators create? ■ Who are these online banking clients? ■ What are the commercial and technical challenges for the future? ■ What about the security of electronic banking?

This seminar aims at highlighting important issues in banking on the Internet. Factual cases will be studied and discussed.

Methodology

The seminar is interactive including presentations and transfer of information, exchange of views and experience, working on practical cases.

Target Group

All bank executives; Central Bankers, Bank and finance Supervision Departments, Financial Markets Authorities, other Financial Regulatory authorities, Audit firms and departments; Bank Association and other professional bodies related to the financial markets. Executives of financial departments of companies linked to the banking world.


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Bankers’ Challenges in Electronic Banking, Management Perspectives


Course Content

Day 1

Introduction

■ What is electronic banking about? ■ The IT role in the banking industry

Examples and demo cases

Channels in turmoil

■ From web 2.0 to web 3.0 internet banking ■ From ebanking to social media (payments

and banking)• Possibilities• Services• Costs

■ Web 3.0 without banking intervention• Disintermediation• Challenges• Benefits and dangers

■ Upgraded ATM’s • Possibilities • Services

■ Payment tools in shops (Point of Sales)• Existing and new cards• No cash anymore?

Challenges and pitfalls

■ How to challenge and handle the technical limits• evolution of the technology• acceptance by the end users

■ The internet community helping to develop services• social media offering financial services• scale effect and viral evolution

Multichannel optimization

■ Advice in branches ■ Operations and brokerage in web banking ■ Information in m-banking ■ Synchronisation between the channels

New payment methods

■ Card based payments ■ Network money ■ Mobile payments

• Possibilities • Services

• Costs• Demo

■ Peer to peer payments • Possibilities • Services• Costs • Demo

■ Friends to family payments

Day 2

Compliance and risk management in e-banking

■ Risk management• typical internet risk• influence on the global banking risk

■ Fourteen principles for a sound risk manage-ment• examples from the BIS

■ Risk policy• how to establish a risk policy• international examples and cases

■ Laws and legislation• in Europe and USA• worldwide legislation• legislation or self-regulation?

■ Balance between risk and user-friendliness• acceptable risk• the Y generation Compliance• E-banking• Integration into global bank approach

The client and the marketplace

■ New model of competition• who are the new competitors• what exceptional services do they offer

■ New clients: convert members into clients• from visitors to members• from members to clients

■ New Products: buying all types of insurances on the Internet• aggregators to present information• offers through the internet channel through

banks ■ New Promotion/ Communication:

• Using SMS as promotional tools ■ combine transactions and promotions

• The screens network as communication channel

■ revolutionary communication tools in branches and on hot spots





Bankers’ Challenges in Electronic Banking, Management Perspectives


Course Content

Day 3

Hold back the invisible enemy

■ Threads• types of dangers• identify the loopholes• phishing, spoofing and whaling Safeguards• for every thread there is a safeguard Se-

curity policy• define a security policy• examples of models of security policies

Case study and Hand over

From banking back office towards back office 2.0

■ Transactions ■ Cost of operation ■ Corporate ebanking (marketplaces)

Electronic banking, IT and mainframe

■ Interfacing ■ Release management ■ New mobile tools ■ Sharing/specialising content

The future: mobile banking

■ Which services to specialise in?• step 1: getting information• step 2: transactions execution• step 3: savings and investments• new services

■ Interaction with the other banking channels ■ Macro and micro payments ■ Smartphone or Tablet?

General summary

■ Sources of information ■ Conclusion





Course Content

Banks Financial Statement Analysis - BasicIn-House or via Live Webinar

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Course Overview

This training allows participants to develop an initial understanding of banks’ financial statements. Specifically, through a mix of lecture, case studies and Excel modelling, the workshop will equip participants to:

■ Review the accounting of banks’ financial statements; ■ Understand the banking book and introduce the new IFRS 9 loan loss impairment methodology; ■ Analyse the accounting treatment of financial instruments including amortised costs, FVTPL (Fair

Value though Profit & Loss) and FVTOCI (Fair Value through Other Comprehensive Income); ■ Review IFRS shareholders’ equity and the reconciliation to CET1 (Common Equity Tier I), Tier I

and Total Capital; ■ Analyse the key banking ratio including growth, performance, asset quality, liquidity and capital

ratios.

Session 1 Introduction to Financial Statement Analysis for Banks ■ Balance sheet ■ Income statement ■ Cash flow statement ■ Statement of change in shareholders equi-

ty/comprehensive income

Case Study #1: participants will review Barclays’ financial statements

Session 2

The Banking Book

■ Types of banking books• Mortgages• Credit cards• Personal loans• SME loans• Corporate loans• Syndicated loans

■ On balance sheet or securitised ■ Amortised cost methodology ■ Credit Issues and collateral ■ Non-performing loans ■ Introduction to loan loss impairment under

IFRS 9 and the three stages

Session 3

Financial Instruments

■ Amortised Costs ■ Fair value through Profit & Loss (FVTPL) ■ Fair value through Other Comprehensive In-

come (FVTOCI) ■ Accounting treatment determined by (i) busi-

ness model (ii) nature of cash flows ■ Decision tree to decide on classification of

financial instruments


■ Balance sheet and P&L calculation of a bond at amortized cost• Based on the Internal Rate of Return (IRR)

of future cash flows• Treatment of fees in the IRR calculation

■ Balance sheet and P&L calculation of a bond at FVTPL and FVTOCI• Effective interest rate method for interests

(same as amortised costs)• Unrealised gain based on NPV at current

yield of future cash flows

Case Study #3: participants will compute on Excel the impact on balance sheet and P&L of a bond under amortised costs and FVTPL


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Banks Financial Statement Analysis - Basic


Course Content

Session 4 Shareholders’ Equity

■ IFRS shareholders’ equity and treasury shares

■ Common Equity Tier 1 (CET1), Tier 1, Tier 2 and Total capital• Key reconciliation items from IFRS Book

Equity to CET1: minority interests, de-ferred tax, changes to investment portfo-lio, etc.

Case study #4: Review Barclays’ Shareholders Equity to Tier I reconciliation

Session 5 Bank Ratios

■ Growth ratios• Loans and deposits• Assets and RWAs• Revenues and costs

■ Performance ratios• Net interest income, net interest expense

and net interest spread• Cost to income ratio• Return on equity, return on assets, return

on RWAs ■ Asset quality

• NPL ratio• NPL coverage

■ Liquidity ratios• Loan to deposit• Liquid asset to short-term wholesale fund-

ing ■ Capital ratios

• CET1 ratio• Total capital ratio

Case study #5: Compute all ratios on Barclays’ latest financial statements


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Course Content

Banks Financial Statement Analysis - AdvancedIn-House or via Live Webinar

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Course Overview

This training allows participants to build a structured approach to the analysis of banks’ financial statements. Specifically, through a mix of lecture, case studies and Excel modelling, the workshop will equip participants to:

■ Review the accounting and valuation of banks’ financial statements; ■ Understand the banking book and the new IFRS 9 treatment for loan loss impairment using the

expected loss methodology; ■ Analyse the accounting treatment of financial instruments including amortised costs, FVTPL (Fair

Value though Profit & Loss) and FVTOCI (Fair Value through Other Comprehensive Income); ■ Review trading and hedging of derivatives under the new IFRS 9 rules; ■ Analyse financial liabilities at amortised cost and FVTPL including fair value for own credit; ■ Understand IFRS shareholders’ equity and the reconciliation to CET 1 (Common Equity Tier I),

Tier I and Total Capital.

Session 1 Introduction to Financial Statement Analysis for Banks ■ Balance sheet ■ Income statement ■ Cash flow statement ■ Statement of change in shareholders equi-

ty/comprehensive income

Case Study #1: participants will review Barclays’ financial statements

Session 2

The Banking Book

■ Types of banking books• Mortgages• Credit cards• Personal loans• SME loans• Corporate loans• Syndicated loans

■ On balance sheet or securitised ■ Amortised cost methodology ■ Credit Issues and collateral ■ Non-performing loans

Session 3

Loan Loss Impairment

■ Incurred losses (IAS 39) has been replaced by expected losses (IFRS 9)

■ Three stages process to determine impair-ments• Stage 1: “12-month expected credit loss-

es” with effective interest rate on gross on gross carrying amount

• Stage 2: “life-time expected credit losses” with effective interest rate on gross on gross carrying amount

• Stage 3: “life-time expected credit losses” with effective interest rate on gross on amortised costs

Case Study #2: participants will assess the credit deterioration of a loan

Session 4

Financial Instruments

■ Amortised Costs ■ Fair value through Profit & Loss (FVTPL) ■ Fair value through Other Comprehensive In-

come (FVTOCI) ■ Accounting treatment determined by (i) busi-

ness model (ii) nature of cash flows ■ Decision tree to decide on classification of

financial instruments


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Banks Financial Statement Analysis - Advanced


Course Content


■ Balance sheet and P&L calculation of a bond at amortized cost• Based on the Internal Rate of Return (IRR)

of future cash flows• Treatment of fees in the IRR calculation

■ Balance sheet and P&L calculation of a bond at FVTPL and FVTOCI• Effective interest rate method for interests

(same as amortised costs)• Unrealised gain based on NPV at current

yield of future cash flows ■ Fair value assessment

• Level 1 based on unadjusted quoted price• Level 2 based on quoted price in inactive

markets or observable model input• Level 3 based on unobservable but signifi-

cant inputs to the overall value

Case Study #4: participants will compute on Excel the impact on balance sheet and P&L of a bond under amortised costs and FVTPL

Session 5

Derivatives

■ Trading and hedging ■ Hedge accounting: fair value, cash flow and

net investment ■ Netting derivative assets and liabilities ■ Qualification for hedge accounting

• Cash flow hedge• Fair value hedge• Net investment hedge for foreign subsidi-

aries

Case Study #5: participants will classify a few hedging transactions in their relevant categories

Case Study #6: participants will value an interest rate swap accounted for as a cash flow hedge

■ IFRS 9 hedge accounting more closely aligned to risk management policy• Removal of hedge effectiveness criteria

(80% to 125%)• Extends eligibility of risk component to

include non-financial items • Permits aggregate exposure that includes

a derivative to be eligible hedged item

• Group of items and a net position (e.g. as-sets & liabilities or forecast sales & purchas-es) hedged collectively as group

■ Accounting treatment for time value of money for options: a two-step process through OCI

■ Accounting treatment for foreign currency for-ward points in OCI

Case Study #7: participants will review and assess different hedge scenarios including risk component hedging, aggregate exposures and net position

Session 6 Financing: Debt and Equity

■ Financial liabilities at amortised cost or FVTPL• Own credit deterioration reduces institu-

tions’ liabilities• Liability reduction due to rating downgrade

to be now classified in OCI ■ IFRS shareholders’ equity and treasury shares ■ Common Equity Tier 1 (CET1), Tier 1, Tier 2

and Total capital• Key reconciliation items from IFRS Book

Equity to CET1: minority interests, deferred tax, changes to investment portfolio, etc.

■ Overview of calculating risk weighted assets (RWAs): credit risk RWA, counterparty risk, market risk and operating risk

Case study #8: Review Barclays’ Shareholders Equity to Tier I reconciliation


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Course Content

Bond DerivativesIn-House or via Live Webinar

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Course Overview

The aim of this course is to provide participants with an understanding of bond derivatives, their applications, who uses them and why. It addresses products that hedge interest rate risk, currency risk and credit default and credit spread risk.

By the end of this course, participants will be able to understand the key concepts of interest rate, currency, credit default and spread risk.

They will also gain an appreciation of which derivative contract is used to hedge which risk and under which circumstances it is used. Additionally, participants will learn about the issuer and/or investor motivations and risk profiles of a variety of structures.

Risk and the need for bond derivatives

■ Bonds and risk profile issues ■ The usefulness of bond derivatives and how

they address risk ■ Interest rate risk ■ Currency risk. ■ Credit default and spread risk

Types of Bond Derivatives

■ Interest rate derivatives• Government bond futures and options on

bond futures• Government bond options• Calls and puts on yields and prices• Yield and price collars• Interest rate swaps• Options on interest rate swaps• Payers and receivers swaptions • Swaption collars

■ Currency derivatives• Cross currency swaps• Basis swaps

■ Credit risk derivatives• Credit default swaps • Total return swaps

Who uses the markets and why?This module explores the market participants and their objectives

■ Issuers who need to raise cash and may issue• Fixed coupon bonds but want to raise

floating rate debt – a traditional bond and swap

• Debt in a currency that they do not need but swap into a currency they do need

using either a currency swap or a basis swap – a traditional bond and currency swap

■ Investors who have cash to invest and:• Want to make a floating rate investment

linked to LIBOR but find that only fixed coupon bonds are available – a traditional asset swap

• See that the credit spread on the cash bond is trading higher than the corre-sponding credit default swap – a negative basis package

■ Investors that do not need to own the asset but want to take a leveraged view on:• Default risk implied by the market by buy-

ing or selling a CDS• Credit spreads widening or narrowing rel-

ative to current market spreads by buying or selling the CDS

• The return available for assuming the credit risk on a non-publicly traded asset – a total return swap

■ Traders and hedge funds that want to take a view on the interest rate or credit spread curve by transacting one of the following strategies:• A carry trade by buying long term risk and

financing short term.• A steepening of the curve by paying fixed

at the longer end of the curve and receiv-ing fixed at the shorter end of the curve – a curve steepener

• A flattening of the curve by receiving fixed at the longer end of the curve and paying fixed at the shorter end of the curve – a curve flattener

Risk metrics and management

This module examines and explains the risk metrics that are used to quantify and manage risk of bond derivatives


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Course Content

■ Delta 1 products• Interest rate sensitivity• Duration • Convexity• DV01 and maturity ladders• Credit risk management• Default probability• Spread sensitivity and CS01• Time decay and theta• Interest rate sensitivity of mark to market

on positions• Collateral management• Central counterparties or bi-lateral risk?• Acceptable collateral and haircuts• Mark to market and margin calls• The impact of fails

■ Option products• Delta and Gamma – describe sensitivity to

asset price changes• Vega, skews and maturity ladders for vola-

tility sensitivity• Theta for the passage of time

■ Value at Risk (VaR)• Historical simulation• Monte Carlo simulation• Stress testing


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Course Content

Cashflow Forecasting: A 2 Day CourseIn-House or via Live Webinar

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Course Overview

The implications of Basel III regulations on banks is widely debated, but what is less appreciated is the impact that Basel III is having on companies. In particular, new liquidity standards will change how certain deposits are valued by banks. Specifically, banks must now make assumptions about the stability, as well as acceptable liquidity sources and levels for each deposit type. These changes could impact the rate of return banks are able to offer on a company’s long-term investment cash.

Companies will therefore need to rethink how they invest surplus cash to obtain acceptable yields, while maintaining the liquidity and level of security they require. Additionally, companies must make sure their cash flow management and forecasting moves cash through the company efficiently and predictably in order to facilitate efficient use of surplus cash.

For these reasons corporate bankers are under increasing pressure to ensure that they can assess the impact of risk crystallisation events on their client company’s cash and working capital management and in particular their ability to honour their debt service from future net operating cash flows.

This highly applied and interactive two day course, aimed at corporate bankers, corporate relationship managers and credit risk analysts at lending institutions, provides a holistic approach to cash flow forecasting through the use of financial modelling and sensitivity analysis. Using cash flow forecasts and cash flow statements we will apply risk analysis to assess how companies can manage their cash flows and honour their debts in an increasing volatile business environment. We will also assess how using discounted cash flow forecasts can provide estimates of client companies’ enterprise values.

Participants will be required to bring a laptop with Excel to the course.

Day 1: Importance of cash flow analysis

AM: Strategy as driver of forecasts/purpose of cash flow statements

■ Mission & vision statements, objectives, tactics

■ What is a cash flow forecast ■ Why cash flows matter, to managers and to

debt and equity providers ■ Why cash flow analysis reveals more than

income statement and balance sheet ■ Forms of cash flow statements ■ Distinguishing cash flows from operations,

investing and financing

Exercise: examining sample cash flow statements

Cash flow statement as linking together income statement and balance sheet

■ Profits as starting point ■ Development of fixed assets ■ Management of working capital ■ Funding choices

■ Shareholder remuneration

Exercise: constructing a simple cash flow statement from income statement and balance sheet

How cash flow differs from earnings

■ Non cash items ■ Accruals and funding ■ Cash inflows and outflows (sources and uses) ■ Timing differences

Exercise: contrasting cash flow with earnings using example

PM - Elements of sources and uses

■ Profits (EBITDA, net income) ■ Adjustments to reported profit ■ Asset conversion cycle

• Receivables and inventory• Payables and other

■ Investment and acquisitions ■ Disposals ■ Funding ■ Shareholder remuneration


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Cashflow Forecasting: A 2 Day CourseContinued...

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Course Content

• Dividends• Share buybacks

Exercise: analyzing sources and uses of funds for a corporate

Day 2: Cash flow and funding analysis

AM: Considering funding and return requirements

■ Returns on capital ■ Key financing concepts: risk, return, oppor-

tunity cost ■ Results analysis ■ Financial ratios

Exercise: calculating cash flow based financial ratios

Forecasting cash flows in context

■ Debt capacity (sample exercise) ■ Company valuation (sample exercise) ■ Using discounted cash flow forecasts to as-

sess company values. ■ Investment decision making

• NPV and IRR (sample exercise)

PM – Constructing and interpreting a cash flow forecast in excel using sample corporate

■ Starting from income statement and balance sheet

■ Deriving financial ratios ■ Running scenarios and sensitivities

Exercise: completing cash flow forecast

Identifying cash flow problems

■ Red flags and early warning signals ■ Possible solutions to cash flow problems ■ Forecasting assumptions

Exercise: identifying cash flow problems and evaluating solutions


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Course Content

Credit DerivativesIn-House or via Live Webinar

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Course Overview

Aims:

The Aim of this course is to provide participants with the skills and techniques necessary to understand a variety of Credit Derivatives and the terminology.

Objectives:

By the end of this course, participants will be able to:

■ Define the key credit derivative products ■ State the key issues regarding the processing of credit derivative products ■ Analyse the risks and rewards of different structures and transactions ■ Assess the roles played by the various participants from the Banks, structurers, traders, credit

enhancers, rating agencies and regulators. ■ Determine the advantages and disadvantages of a number of more complex transactions.

Methodology

Teaching methodology will include discussions, casework and exercises. Candidates will participate fully in activities which will ensure understanding and learning.

Day 1

Products, Applications and Documentation

Introduction and recap

Overview of market, basic products

■ Current market developments ■ Structural changes in the Credit Derivatives

market ■ Single name vs. correlation trading ■ Current challenges facing the market ■ FRN market, review of recent transactions,

relationship with CDS ■ Synthetic FRNs ( asset swaps) ■ Review GM / GMAC the downgrading and

subsequent spread movements

This module provides an overview of current market developments focusing on structural changes in the market. The product range and applications are discussed as are current challenges facing the market.

Complex credit derivatives

Beyond single name products

■ Credit Linked Notes ■ Nth Loss and Nth Default ■ CDOs and Synthetic CDOs ■ Credit Spread Options ■ Capital Structure Arbitrage ■ Index Products ■ Risk Considerations

This section of complex products takes the basic Credit Default Swap and shows how complex products can be created by adding in securities, increasing the number of Reference Entities, and re-allocating the risk into different tranches

This leads to a detailed section on Synthetic CDOs and Single Tranche Synthetic CDOs. The section on Index Products looks in some detail at this addition to the credit derivatives market. The last part - Risk Considerations - discusses the risks


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Course Content

inherent in complex credit products.

User applications

Risk management and investor applications

■ Review of user rationale: line, risk, capital and balance sheet management, trading strategies and discussion of investor bene-fits

■ Transaction examples for different user groups (bank, insurance company, corpo-rate, funds)

Day 2

Legal and Documentation

Keeping up with the developments in this complex and evolving area of structuring

■ Analysis of actual Credit Events ■ Detailed analysis of 2003 Definitions ■ The use of Master Confirmations: geograph-

ical variations ■ Outstanding issues

Case Study: Analysing and correcting a single name CDS term sheet

A full understanding of credit derivatives is still very dependent on a good grasp of the legal environment and documentation. This module takes the user beyond familiarity with the Master Short Form Confirmation and looks that the necessary changes for tailor made transactions.

Putting it all together: worked examples by delegates

The Delegates work on the case studies in small teams and then present the results to the whole group.

Pricing and Valuation

Pricing single obligor credit derivatives

Examines the pricing of single obligor credit derivatives.

■ The Ratings Agencies ■ Credit risk and credit spreads

■ Reviewing data and information available ■ Bloomberg, Reuters, the trading platforms ■ Worked example - valuing a credit default

swap

Case Study: Valuing a credit linked note

Introduction to Mathematics of Derivatives

■ The Greeks ■ The volatility trader - how they review their

positions ■ Delta hedging and its dynamics - what are

traders looking for ■ Rho, theta, vega - brief overview of the im-

portance of these measures ■ Delta and gamma

Concluding questions and answers


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Course Content

Credit Risk Training - IntroductionIn-House or via Live Webinar

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Course Overview

A two to three day introductory aimed at bankers, analysts, product and client servicing and support teams wanting to gain an understanding of how credit assessment and management is developed, models created, risks assessed and mitigation techniques implemented. Participants are not expected to be modellers or quantitative analysts but a basic understanding of banking products would be helpful.

Learning ObjectivesParticipants will gain an understanding of how to: ■ Identify the key elements of credit risk ■ Measure, quantify and evaluate the correlation of credit risk exposures within a portfolio ■ Review modelling and sensitisation techniques over the main drivers of credit risk ■ Apply credit portfolio management within the overall internal risk management and external

regulatory environment

MethodologyClassroom style lectures featuring use of relevant case studies. Highly interactive with delegate participation actively encouraged

Session 1: Defining credit risk ■ The Basel Accords ■ What is credit risk? ■ The different types of credit risk

• Sovereign• Corporate• Retail• Systemic• Counterparty

■ Concentration risk ■ The macro environment ■ Expected and unexpected losses


Session 2: Lending Refresher ■ Definitions & basic lending principles ■ Lending policies, lending strategies, lending

systems ■ Data/information collection ■ Approvals, security, draw downs ■ Management & monitoring systems

Case Study/Exercise: Several of each throughout the session

Session 3: The Credit Risk in Financial products ■ Loans and overdrafts ■ Project finance ■ Construction finance ■ Private public partnerships ■ Government and corporate bonds ■ Equity and mezzanine debt ■ Credit derivatives

■ Counterparty exposure from traded products ■ Trade finance ■ Mortgages ■ Credit cards


Session 4: The Basic Principles of Lending ■ Appraisal techniques ■ Credit assessment for personal clients ■ Credit Assessment for retail clients ■ Business clients ■ Corporate Clients ■ Private Wealth Clients ■ Group credit appraisal ■ Development finance ■ Project finance


Session 5: How Banks make money from Lending ■ Price differentials ■ Interest arbitrage ■ Gap and duration management ■ Opportunities ■ Risk ■ Maturity mismatches ■ Key Performance Indicators


Session 6: Introduction to Credit Scoring ■ What does credit scoring measure ■ SWOT analysis ■ Basic principles ■ Data collection, refining and perfection ■ Measuring effectiveness ■ The challenge of “refer”


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Credit Risk Training - IntroductionContinued...

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Course Content

■ Evaluation – back testing ■ Additional data ■ Credit scoring in practice


Session 7: Introduction To Credit Risk Strategy ■ Maximisation v optimisation strategies - en-

hancing risk adjusted returns ■ Portfolio theory and correlation concepts ■ Contagion risks ■ Liquidity assumptions


Session 8: Introduction to Mitigating and Managing Credit Risk ■ The credit time line ■ Migration risk - doubtful debt, default and

bad debt ■ Credit assessments and scoring ■ Corporate credit scoring ■ Retail credit scoring ■ Diversification and portfolio management ■ Securitisation ■ Collateral ■ Credit derivatives ■ Netting ■ Cash flow monitoring ■ Recovery management


Session 9: Introduction to Measuring Portfolio Risk ■ Loss distributions and loss tails ■ Quantifying expected and unexpected losses ■ Credit v market risks ■ Credit risk concepts

• Probability of default• Loss given default• Exposure at default• Time to default


Session 10: Introduction to Credit portfolio Models ■ Modelling approaches ■ Volatility, correlation, VaR and Monte Carlo

simulation ■ Default models ■ Mark to market models etc

■ Accounting asymmetry ■ Advantages and disadvantages of models


Session 11: Introduction to Sensitivity Analysis, Scenario Analysis and Stress Testing ■ The approaches – quantitative and qualitative ■ Why it is necessary ■ Framework for stress testing ■ Benefits of stress testing


Session 12: Introduction to the Credit Regulatory Framework ■ Risk-weights and risk-weighted assets ■ Basel II and rating agencies ■ The approaches for measuring credit risk cap-

ital – Standardised and IRB ■ Different types of capital – economic, market,

shareholder, regulatoryCase study/ Example to illustrate the above

Session 13: Introduction to Credit Portfolio Management ■ Credit portfolio management – location with-

in firm and role (advisory, decision makers, profit centre)

■ Privileged information, price-sensitive infor-mation and Chinese Walls

■ Public private partnershipsCase study/ Example to illustrate the above

Session 14: Lessons to be Learned From the Credit Crunch ■ Reasons for the crunch ■ Over expansion of assets ■ Securitisation ■ Complex loans and structures ■ Liquidity issues



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Course Content

Cybercrime and Financial ServicesIn-House or via Live Webinar

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Course Overview

Participants will:

■ Understand the impact of cybercrime and how it threatens the financial services industry ■ Master the key laws regarding computer misuse and fraud as well as the impact of the USA PA-

TRIOT Act ■ Be aware of how IT, physical and socially engineered methods are used to commit or facilitate

cybercrime ■ Gain a familiarity with the major fraud typologies used by cyber criminals ■ Get to grips with the key security methods used to prevent cybercrime and learn what you can

do to ensure that they are effective

Introduction

■ The annual cost of cybercrime ■ What is cybercrime / cyber-attack?

• Botnets• Denial of service• Device theft• Hacking• Malicious code• Malicious insiders• Phishing, vishing and social engineering• Privilege escalation• Web-based attacks• Zero day vulnerabilities

■ Costs and impacts• Consumer impacts• Impacts on firms

■ Effects on the financial services industry as a whole• Costs to industry• Regulatory impacts

Mini case study: A right royal hack

The legal framework

■ Computer Misuse Act • Section 1 offences (as amended)• Jurisdiction issues

■ Fraud Act 2006• Section 2,3 and 4 offences• Secondary offences

■ USA PATRIOT Act ■ Potential related offences

• Market Abuse• Money Laundering• Terrorist Finances• Theft• Bribery

Case study and team exercise

■ The theft of an identity:• The team will place themselves in the role

of identity fraudster and plan to create a fake identity for use for online fraud.

• What method will the team use to create this identity and to avoid detection?

Criminal behaviours

■ Organised crime ■ Opportunistic crime ■ Internal risks ■ Fraud typologies

• The Levy report• Emerging typologies

■ Scam risks• Accomplice / illicit behaviour scams • Bogus products and services• Business targeted scams• Gambling scams• Identity Frauds• Investment frauds• Money making scams• Technological scams

■ Cyber risks• Cyber attacks• Cyber extortion

Countermeasures

■ Behavioural controls• Social Media Safety• Email Compliance• Hardware and Software Safety • USB Security• Remote Working Compliance• Escalation• Safe Surfing

■ Behavioural economics• Heuristic learning• Biases


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Course Content

Mini case study: Your comedy character name

■ IT Countermeasures• Physical perimeter• Data perimeter• IT perimeter

Mitigation and prevention

■ Data journey• Risk analysis• Risk touch points• Mitigations• Management information• Escalation

■ The role of identity confirmation• DPA process• Weaknesses• The role of due diligence

■ The role of training• Identify• Classify• Escalate

■ Reporting requirements• FCA• ICO• New European requirements

Learning and future mitigation

■ Root cause analysis ■ Governance structures

• Committees• 3 lines of defence• Monitoring and assurance

Case study and team exercise

■ The has been a significant data breach at your firm, discus with the team what steps you would take to determine:• What has occurred?• What offences have been committed?• What controls have been breached?• What further investigations should be con-

sidered?• To whom you may need to report the

breach?

Summary

■ Learning summary ■ Further learning opportunities ■ Summary of case studies


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Derivatives Pricing TrainingIn-House or via Live Webinar

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Course Overview

This course has been available as a public training programme in many countries around the world in particular in London, Frankfurt and Singapore. It has also been available as an in-house programme in emerging markets.

Bond Markets and Swaps are playing ever greater role in capital markets. Questions about how to weather the current turmoil, correctly price a new bond issue and then properly value the positions over time has become an essential requirement.

Financial Derivates have played an increasingly important role since their introduction. In some markets, they actually have become the driving force behind the movements in cash markets.

Overall course aim:

To provide market participants with the necessary building blocks to understand the different products in financial markets leaving them with an excellent foundation and a comprehensive overview in order to understand and develop new structures.

This course starts with a review of the financial markets and the impact that the financial crash has had on markets, banks ability to trade and hedge positions and the pricing of financial instruments. It will also look at current regulatory issues such as Basel III and the Volcker Rule.

No course on pricing of financial instruments could be undertaken without reference to a robust yield curve, this course shows how curves are built using instrument that the institution uses to value and hedge positions. Discussions of the future of riskless interest rates and credit value adjustments will be undertaken.

The afternoon of the first day will be taken up by demonstrating how an interest rate swap is priced in the primary and secondary markets and how the correct use of an ISDA Master Agreement, CSA and collateral can mitigate use of banks own capital for credit risk purposes.

Day two commences with a short summary of the futures markets and their relationship with the interest rate swap markets.

Option pricing can at first seem complex and difficult to understand, the morning of day two will be used to explore how options are priced and risk managed using the Greek letters. This session will use enough mathematics to ensure that solutions are robust, but will also explain concepts in a practical manner so participants can take their newfound knowledge and apply it to their everyday trading and risk management tasks.

Exotic (path dependant) options will be explained, in particular where the pricing and risk management is similar and where it is different to conventional options.

Finally, a small number of structured products will be constructed from their building blocks to show how they are priced and risk managed. The products that will be demonstrated will include capital protected notes and yield enhancing structures.

The trainer for this course has developed a number of Excel Spreadsheet pricing and risk management tools which will be used on the course.

Where appropriate Bloomberg functionality will be referenced and explained.


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Course Content

Day 1

Introduction:

■ Overview over Financial Markets pre and post the financial crisis

■ Cash Flows: the Underlying of any Financial Instrument

■ Risk and Return Characteristics

Banking Regulations:

■ Capital Adequacy Requirement ■ Basel III ■ The need for derivatives ■ Current developments

Basics of Pricing – A refresher ■ Simple interest calculations ■ Single and multiple rate compounding ■ Interest and discount factors ■ Day/count conventions and comparative

returns ■ Curve construction, blending, interpolation

and splining ■ Building a yield curve from ■ Deposits ■ Futures ■ Interest Rate Swaps ■ Deriving zero and forward rates from the

swap curve

Interest Rate and Currency Swaps:

■ The Swaps Mechanism ■ Types of Swaps

The Principle of Swap Pricing:

■ The Need for Forward Rates ■ The Need for Zero-coupon Rates

Generic Swap Pricing:

■ Finding the Forward Amounts ■ Discounting the Floating Leg ■ Equalise the Floating Leg with the Fixed Leg ■ Discounting the Fixed Leg ■ Finding the Swap Rate ■ Creating a Swap Curve

Swap Valuation in the Secondary Market (Mark to Market):

■ Swap Rates ■ Zero-coupon Rates ■ Forward Rates ■ Discount Factors ■ PV of fixed and floating Leg ■ Net Present Value

Short-term Swap Pricing:

■ Pricing and Valuation of EONIA Swaps ■ Understanding and pricing Basis Swaps

Day 2

Introduction to Futures and Options:

■ The History and Development of the Market ■ Definitions ■ Over-the Counter (OTC) versus Exchange

Traded Products ■ The Role of The Clearing House in both listed

and OTC products

Pricing and Valuing Futures:

■ Basic Futures Mechanism ■ Pricing Futures through Cash and Carry Arbi-

trage ■ The Value Basis ■ The Carry Basis ■ The Importance of Credit

Specialities with Futures Contracts:

■ Cash Settlement ■ Physical Delivery

Introduction to Options:

■ Definitions ■ Calls and Puts

A Simple Approach to Option Pricing:

■ Volatility ■ Realised volatility of the underlying asset ■ Implied volatility as quoted by the market ■ The volatility gap range and how to read it ■ The importance of implied volatility smiles

and skews ■ the “90 – 110 skew” in equities ■ 25 delta risk reversals in FX ■ Creating a 3D volatility surface with which to





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Course Content

price options and understand risk ■ The Binomial Model ■ The Black & Scholes Model ■ Incorporating local volatility into the model

Risk Management and Position Control of Options

■ Option Greeks – a must know and under-stand!

■ Delta and Gamma for spot rate risk ■ Gamma needs to be put into silos as Gamma

is greatest at the money and loses its po-tency as the option moves into or out of the money

■ Theta for time decay ■ Vega/Kappa for implied volatility risk catego-

rised as a change of 1% in implied volatility ■ Volatility risk needs to time bucketed as

volatility has different prices for different maturities

■ Phi for base currency interest rate risk cate-gorised as a increase of 1% in the base cur-rency LIBOR applicable to the maturity date of the option or strategy

■ Rho for pricing currency interest rate risk categorised as a increase of 1% in the pric-ing currency LIBOR applicable to the maturi-ty date of the option or strategy

Case Study: Managing the Risks

How to run an options book, three common methods:

■ Delta hedging ■ Gamma hedging ■ Vega hedging ■ Relative advantages, disadvantages and

risks

Exotic Options:

■ Barrier Options – pricing and hedging of: ■ Barriers ■ Reverse Barriers ■ Best of two (Digital) ■ Other types of path dependant options

The principal of Structured Products:

■ Participation and Tracking ■ Guaranteed Return Products ■ Yield enhancement

Course Summary: ■ Putting Financial Instruments Into Context ■ Risk Management





Course Content

Emerging Market Bank Modelling & ValuationIn-House or via Live Webinar

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Course Overview

This course covers the key elements of modelling and valuing the activities of an emerging market commercial bank, including the main elements of retail and commercial banking.

After an overview of the key elements of bank analysis, participants will build an integrated financial statement forecast model, projecting asset and liability balances, interest rates and spreads for key assets and liabilities, using industry best practices.

A real-world emerging market case study and financial filings will be used to extract key information. Participants will learn industry-specific forecast methodologies and apply them in a financial model.

The course will allow participants to understanding how the Basel II, 2.5 and III compliance requirements effect bank regulation, including minimum capital requirements, the supervisory review process and disclosure. The course will allow participants to calculate risk-weighted assets, tier one and tier two capital and to model a bank income statement using the balance sheet as a driver.

Once the participants have built a financial model, they will use this to value the case study bank using cash flow based and multiple based valuation techniques.

The participants will consider the type of cash flow model to be used for each case study bank, the various cash flow models that could be used and how issue such as terminal value should be treated.

The interaction with the regulatory capital requirements and how the upcoming Basel III regulations will affect capital requirements will be considered.

Case Study: The participants will use a variety of case studies and exercises during the three days, based on emerging market case study company.

Participants will be required to bring a laptop and a calculator to the course.

■

The fundamentals of bank analysis

■ Banking in context and corporate structure ■ Examine the components of the balance

sheet • Liquid items – cash and deposits • Trading items, derivatives and other short

term items • Loans and advances • Equity and reserves • Off balance sheet items • Accounting and valuation issues – impact

of different valuation approaches on the capital base and income statement

Case Study I: Participants analyse the liquidity and maturity of a case study balance sheet

Analysing the components of the income statement

• Interest income • Fees and commissions • Income from affiliates

■ Performance analysis - explain the impor-tance of key ratios: profitability, operational, and risk ratios

■ The CAMELs approach to bank analysis

Case Study II: Participants analyse the income statement of a case study company and calculate various key ratios for the business


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Course Content

Building a financial institution forecast model

■ Overview of bank accounting & regulation ■ Key elements of a bank model

• The balance sheet as a driver • Key elements of the income statement • Determining economic drivers for different

types of banks

Case Study III: Participants are introduced to the bank forecasting model and review its structure, linking up the balance sheet and income statement

Modelling different banking activities

■ Overview of the key activities in a commer-cial bank

■ Modelling the core activities: determining the key drivers • Retail banking • Consumer lending and credit cards • Commercial banking • Investment banking • Asset / wealth management

■ Incorporating core activities into the income statement and balance sheet

Case Study IV: Participants build out the case company model incorporating the various core activities into the model

Commercial banks and the regulatory framework

■ Basel II compliance and its effect on bank regulation • Pillar I: minimum capital requirements • Pillar 2: supervisory review process • Pillar 3: market discipline

■ Basel III and the effect on capital ratios ■ Calculating risk-weighted assets ■ Calculating tier one and tier two capital

Case Study V: Participants model risk-weighted assets and tier one and tier capital for a case company

Further issues to consider in a bank model ■ Debt service and income as operating or

financing expense ■ Regulatory constraints on reinvestment and

implications on growth ■ Projecting cash flows ■ Incorporating regulatory constraints into the

model ■ Dealing with regulatory capital ratios ■ Calculating minimum capital adequacy

Case Study VI: Participants complete the case company model incorporating a cash flow forecast and various regulatory ratios

Auditing the model and sensitivity/scenario analysis

■ Balancing the model and checking for accuracy ■ Error-proofing techniques & sensitivity analysis ■ Ratio analysis – the key efficiency, operating

and financial ratios for a bank ■ Building scenarios – the key drivers ■ Sensitivity analysis - flexing financials and

capital structure including the implications of Basel III on capital requirements

Case Study VII: Participants build error proofing techniques and scenario/sensitivity analysis into the case company model and produce efficiency, operating and financial ratios for the case company

Case Study VII: Participants build error proofing techniques and scenario/sensitivity analysis into the case company model and produce efficiency, operating and financial ratios for the case company

Valuing a bank

■ Valuation issues – getting to intrinsic value in a bank valuation• Issues with a bank business model• Key accounting issues in the bank sector• The valuation issues surrounding regulatory

capital ■ Valuation issues – relative valuation tools used

in a bank valuation• The key multiples used• Deriving multiples from fundamentals

■ Valuation approaches for a bank – building a dividend discount model• Determining the number of stages to be

used• Calculating the discount rate• Maturity phase and terminal value assump-

tions





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Course Content

Case study VIII: Participants build a dividend discount valuation for the case company

■ Valuation approaches for a bank – building a residual income model• Determining the number of stages to be

used• Calculating the discount rate• Maturity phase and terminal value as-

sumptions

Case study IX: Participants build a residual income valuation for the case company

■ Valuation approaches for a bank – building a cash flow to equity model• Determining the number of stages to be

used• Calculating the discount rate• Maturity phase and terminal value as-

sumptions• Implication of changing capital require-

ments including Basel II I capital ratios

Case study X: Participants build a cash flow to equity valuation for the case company





Course Content

Emerging Market Debt AnalysisIn-House

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Course Overview

Sales of emerging market debt in hard currencies such as US dollars and euros are expected to reach more than $125 billion in 2016.

The demand for these bonds has been driven by the search for yield by asset managers in an environment of low interest rates. Emerging markets have been historically volatile in terms of performance and the market could change rapidly. The essential ingredients for understanding the risk of these investments concerns country risk analysis, interest rate risk and currency risk.

This programme will equip you with the tools to understand the risks of investing in emerging market debt and the consequences when problems arise and the debt is restructured. We will use examples of various emerging market countries to illustrate the risks and bring the topic to life.

History of emerging market debt and what we can learn

■ Current state of the market; issuance and yields

■ Attraction of the market for fixed income investors• Relative yield strategies

■ Macro-economic slowdown effects ■ Financial and other shocks to the system ■ Balance of payment problems ■ Rising government debt problems ■ The role of the IMF and other agencies ■ Examples from history; Mexican peso crisis,

Thai baht, Argentina before and now ■ China slowdown and impact

Macro-economics – back to basics to understand the risks

■ Circular flow of income ■ Public and private sector debt ■ Government policy impact ■ Monetary policy and the role of the central

bank ■ Role of the commercial banking sector ■ Different foreign exchange regimes ■ Purchasing power parity theory and current

evidence ■ Effect of globalisation of financial markets ■ Key credit risk indicators in emerging econ-

omies

Government policy

■ Fiscal policy and budgetary flexibility ■ Sustainable debt and debt service level ■ Contingent risks: pension and health care,

infrastructure ■ Balance of payments

■ Export and import composition and trends ■ Net external debt burden to GDP and current

account receipts ■ Central bank reserves and liquidity ratio ■ Savings and investment, capital flows ■ Business environment, trade and economic

diversity and stability ■ Political risk ■ International trade and political links ■ Governance and legal system

• Creditor rights

The rating agency approach to emerging market debt risk assessment

■ Rating distribution of emerging market debt ■ Rating agency model approach ■ Capacity and willingness to service debt ■ FX convertibility risk

• US dollar risk versus local currency issu-ance

■ Maturity risk ■ Country rating ceilings ■ CDS, bond and equity indicators

Sovereign default and restructuring solutions

■ What constitutes a default? ■ Default and restructuring events, distressed

debt exchanges ■ Paris club approach, IMF sponsored solutions ■ Export credit agency buyer and supplier cred-

it ■ Transfer risk and country risk insurance ■ A framework for setting country limits

Short case study examples from emerging market countries will be used to illustrate the concepts


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Course Content

Enterprise Risk Management (ERM)In-House or via Live Webinar

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Course Overview

This highly interactive and workshop style course will enable delegates to discuss strategic ERM frameworks, understand the key processes for implementing an effective ERM function and how to put in place the appropriate ERM architecture. It will deal with set up, implementation, operation, management and exceptional issues and will demonstrate how this important corporate governance tool can be used to manage the risk profile across the firm. It will cover economic capital allocation, risk appetite, risk allocation, and risk budgeting and risk reporting.

Participants will:

■ Be introduced to ERM, emergence, scope and purpose. ■ Get an overview of the challenges to implementing and establishing an ERM programme ■ Have explained to them the cultural challenges, including getting the right sponsor, encourag-

ing collaboration and understanding multiple risk types. ■ Gain an understanding of the components of the ERM ■ Be appraised of exception based escalation ■ Be taught about how to establish ERM Systems. ■ Have an overview on portfolio risk management & ERM systems ■ Understand risk management under ERM ■ Be taught about optimising risk and equity allocation ■ Get to grips with new challenges and regulatory considerations

Session 1: ERM; Emergence, scope & purpose ■ Traditional Silo risk management ■ How does ERM differ ■ Definition of risk - types ■ Consequences of failing to manage risk ■ Internal and external drivers of risk to or-

ganisations ■ The role of the risk management function ■ The purpose and key benefits of risk man-

agement ■ Corporate Governance and risk manage-

ment Case Study –Creating a new ERM Discussion – What do you think of your existing ERM process

Session 2: Challenges to implementing and establishing an ERM programme ■ Defining risk, measurement , getting relia-

ble data, confidence level and time frame ■ Chosen measurement approaches, tracking

error, duration etc ■ Aggregation, distinguishing firm risks from

client risks ■ Timescale challenges, amalgamating inte-

grated VaR models

■ Risk variance and co-variance ■ Hidden correlations ■ Complexity, collecting and transforming in-

puts from disparate sources ■ Adding narrative to data so key points can be

understood/identifiedCase Study - Hidden correlationsExercise - Prepare a brief board paper setting out parameters followed by debrief and discussion

Session 3: Cultural challenges ■ Getting the right sponsor ■ Gaining acceptance throughout the firm ■ Establishing a common risk language ■ Overcoming traditional silo mentality/practic-

es ■ Encouraging collaboration ■ Embedding the approach ■ Combining credit and market and operational

risk teams ■ Different skill types, cultures and different

roles ■ Understanding multiple risk types

Role Play – Dealing with objections from a senior colleague, followed by debrief and discussion

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Course ContentSession 4: ERM – the components ■ Definition of equity ■ The three types of equity; regulatory, eco-

nomic and actual ■ VaR explained ■ Procyclicality ■ Assessing the risk maturity of the business ■ Setting parameters ■ Establishing report lines and responsibilities ■ Convincing decision makers that the exer-

cise is more than box tickingCase study –Calculating the three types of equity

Exercise – Consider your department. Are all risk components covered? What improvements would you suggest and what would you leave out. Followed by debrief and discussion.

Session 5: Risk Appetite ■ The key principles ■ Appetite, tolerance and capacity – what do

these thresholds mean? ■ A sample RAS ■ Defining RAS and risk limits ■ Using RAS as a management tool

Case study – Consider a simple RASExercise –What RAS does your firm require? Followed by discussion and debrief

Session 6: Establishing ERM systems ■ The key principles ■ Suggested framework, content and layout ■ Prudence and conservatism ■ Period to be covered ■ Proportionality... how many risks? ■ The ERM process from preparation to Board

approval ■ Challenge and independent review ■ Committees and their roles

Session 7: Portfolio Risk Management & ERM systems ■ Portfolio performance measures ■ Value at risk ■ Stress testing & impacts of stress tests ■ Scenario modelling and its impacts ■ RAROC ■ Embedding ERM in the firm ■ Gaining acceptance

Case study – A sample stress test on the ERM

Session 8: Risk Management under ERM

■ Underwriting process ■ CRA and CRR ■ Transfer pricing ■ Active risk provisioning ■ Risk hedging strategies ■ Risk allocation

Case study – A simple risk allocation process

Session 9: Exception based escalation ■ Periodic reporting of risk and control informa-

tion ■ Immediate escalation of risks as they arise ■ Immediate escalation of controls as they fail ■ Prioritising ■ Setting thresholds and limits ■ Aggregated escalation matrix

Case study – What are the exceptions you need for your department. Are they specific to you or the firm?Role play – Dealing with a fictional exception in your department. Followed by discussion and debrief.

Session 10: Optimising Risk and Equity Allocation ■ Risk portfolio theory ■ Active risk portfolio management ■ Stakeholder perspectives – internal and ex-

ternal ■ Inter-relationships ■ Collaboration ■ Forming an overall picture ■ Multi task forums

Case study – Looking from the shareholders viewpoint

Session 11: Accountability ■ Risk control owners ■ Departmental responsibility ■ Transparent reporting ■ Visibility ■ Fairness ■ Sanctions

Case study - What report lines would you recommend for your department. How will exceptions be handled? Followed by debrief and discussionRole Play – Persuade a colleague who objects, to taking on this role. Followed by debrief and discussion

Session 12: New Challenges ■ Regulatory changes ■ Governance and strategic risks ■ Refreshing the profile ■ Reputational risks





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Course Content

■ Systemic risksCase study– What must be done to ensure the new ERM reacts to real challenges and not just small changes? Followed by debrief and discussion

Session 13: Regulatory Considerations ■ Regulatory issues ■ Auditors requirements ■ Other Regulatory requirements

Exercise – who regulates you? What does each want from an ERM? Will we deliver this? Are we meeting these expectations with our ERM? What changes if any might be made?

Session 14: Course Summary ■ Final Exercise in role play form (as many as

time permits) – convince the course direc-tor, playing a difficult CEO to implement your ERM. Followed by debrief and discus-sion.

END





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Course Overview


Examination Of Documents Under Documentary CreditsIn-House or via Live Webinar

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Course Overview

Advanced practical workshop on examination of documents under documentary credits, i.e. The most demanding task of the documentary credit practice. The workshop has been developed to provide very comprehensive coverage of the subject. It will explain all main aspects of examination of documents in accordance with ICC Rules – UCP 600 as supplemented by ISBP 745. The most significant recent ICC Banking Commission Opinions and DOCDEX cases will be also covered in the lectures.

The workshop is very focused and practical. Participants will learn how to examine documents mainly by examining them themselves, i.e. There will be plenty of various cases studies, examples, debates on the issues.

This workshop has been designed to provide comprehensive and profound knowledge in relation to examination of documents under documentary credits at advanced level, and is, therefore, a must for: ■ Specialists in trade finance with a working experience, back office bank specialists who need to

broaden their knowledge and understanding of examination of documents as per ICC rules; ■ Bankers working in trade finance, particularly in documentary payments, bank guarantees and

export/import finance departments, especially those providing respective advisory services to the customers.

The workshop deals with both the standard and more advanced situations and practical issues in relation to documentary credits in accordance with best practices as reflected in ICC rules and publications. Participants will learn all relevant main UCP 600 and ISBP 745 provisions in practical manner, i.e. By applying them through various case studies and debates on the subject.

Objective of the training: ■ The main purpose of the seminar is to familiarize the participants with all main aspects of examina-

tion process, standard as well as more advanced situations, problematic issues and current topics in the field of documentary credit practice with particular focus on examination of documents.

■ ■ The workshop will be provided in the form of case studies, examples and discussions, i.e. with ac-

tive participation of all participants. ■ ■ Material relevant to the course will be distributed and a certificate of attendance will be delivered to

all those who completed the course. ■ A good working knowledge and familiarity with documentary credits is required to derive the maxi-

mum benefit from this course.

About the Resource PersonYour course lecturer has spent more than 25 years in international trade finance field. He is a leading international trainer and consultant in the field, well established specialist of the ICC Banking Commission. He has been active in various ICC Banking Commission activities (UCP, URDG revisions, creation of URF – rules for forfaiting, URBPO, etc.). He has lectured extensively on the subjects in more than 50 countries of the world, including the UK, Europe, MENA, Africa and Asia. He is an author of the leading best-selling book on “Examination of Documents under Documentary Credits“.

Course Content

Day 1

Examination of documents under Documentary Credits in Practice

■ Main rules regarding examination of docu-ments as per UCP 600 and ISBP 745• Relationship between UCP 600 and ISBP

745• Place and time for presentation as per

UCP 600, article 6• Place and time for presentation as per

L/C terms

• Place for presentation and availability of credits

■ Main standard for examination of documents• No conflict in data, • Illustration of „no conflict in data“principle,

examples, ICC Opinions ■ Main general principles captured in ISBP 745

• Corrections, alternations• Issuers• abbreviations• copies v. originals• language• misspelings, typos• signatures



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Course Overview


Examination Of Documents Under Documentary Credits

Continued

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Course Content

Examination of financial documents – part 1

■ examination of bills of exchange, examples, cases• tenor• endorsements• marking, other conditions

Examination of commercial documents – part 2

■ Examination of commercial invoice, exam-ples, cases• description of goods in commercial in-

voice• other aspects to examine

■ examination of packing list, examples, cases

■ examination of weight list, examples, cases ■ examination of commercial documents –

advanced case study

Examination of commercial documents – certificates – part 3

■ Examination of inspection certificate, ex-amples, cases

■ Examination of quality certificate, exam-ples, cases

■ Examination of phytosanitary certificate, examples, cases

■ Examination of veterinary certificate, ex-amples, cases

■ Examination of fumigation certificate, ex-amples, cases

■ Examination of inspection certificate, ex-amples, cases

■ Examination of certificate of origin, exam-ples, cases• Description of goods in certificate of

origin• Exporter, consignee• Origin of goods• Issuer, certification by chambre of com-

merce or similar organization• Different types of certificates of origin

■ Examination of certificates – advanced case study

Examination of transport documents – part 4

■ examination of ocean bill of lading, exam-ples, cases• on board notations• signatures• negotiable v. straight consigned• clean v. not clean bill of lading

■ examination of charter party bill of lading, examples, cases• specific issues with CP bills of lading:

more ports, transhipment ■ examination sea waybill, examples, cases ■ examination of multimodal transport docu-

ments, examples, cases• on board notations• signatures• negotiable v. straight consigned

• clean v. not clean MTD ■ examination of air waybill, examples, cases

• names of airports• signatures

■ examination of road transport document, ex-amples, cases• specific issues with CMR • signatures

■ examination of railway transport document, examples, cases

■ examination of inland waterway transport doc-ument, examples, cases

■ examination of transport documents – ad-vanced case study

Examination of insurance documents – part 5

■ examination of insurance policy, examples, cases• issuer• insured, need for endorsement • risk covered • insured amount, currency • date of issuance, no expiry • ther issues with insurance documents

■ examination of insurance certificate, examples, cases

■ examination of insurance documents – ad-vanced case study

Day 2


■ examination of set of documents including bill of lading, advanced case study • discussion about found alleged discrepan-

cies


■ examination of set of documents including air waybill, advanced case study • discussion about found alleged discrepan-

cies

Examination of documents – more complicated situations

■ examination of documents under transferable credits – specific issues explained

■ examination of documents under transferable letter of credit, advanced case study• discussion about found alleged discrepan-

cies

Examination of documents – cases, debates

■ is it a discrepancy or not? – various case stud-ies, examples

■ questions and answers, discussion about re-maining issues



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Course Overview


Course Content

Financial Statement and AnalysisA 3 Day Course


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Course Overview

This course:

■ Provides an introduction to the basic principles and practice of financial accounting and report-ing

■ Combines theoretical rigour with a strong element of everyday commercial reality and a wealth of practical detail

■ Is slanted towards the needs of users rather than preparers

It therefore present not only a beginner’s course in bookkeeping for historic transactions, but also a primer on the objectives, conventions, methods and limitations of financial reporting, as a future-orientated aid to decision making by external stakeholders, such as equity shareholders, investment analysts, lenders, and credit risk managers;

■ Assumes no prior technical knowledge of accounting or bookkeeping

However, participants are expected to have a general appreciation of the concept of profit and loss, and of a business or other organisation as a legal entity (referred to as “the entity” in what follows) distinct and separate from its owners or controllers

■ Is presented at a basic level where the nuances of the differences between IFRS, US GAAP and other national accounting frameworks rarely matter

But in the interest of consistency and transparency, it is presented throughout in accordance with the principles and terminology of IFRS. This can of course be adjusted in the light of the specific situation and preference of the client.

Regulatory environment

■ Companies Act 2006 categories of compa-ny and the basic framework; SME, other private and listed

■ What is defined as ‘listed’ for different re-porting purposes; Companies Act, APB, ASB

■ Summary of listing requirements for annual and interim reports for Full, AIM and Plus listed companies

■ IFRS/ UKGAAP options and the implications of joining and moving between markets

■ Accounting changes – update on option to move to IFRS and planned concessions for qualifying subsidiaries

■ Options within IFRS and UKGAAP Standards – overview

■ Latest changes to accounting for business combinations – the new test for control

Narrative reports

■ Accounting policies and uncertainties – the basic requirements

■ Directors report contents and the review of the business

■ Operating and financial reviews ■ Other additional statements and summaries

– regulatory framework and reporting obli-gations

■ Review of latest proposals for strategic re-port

Directors and management information

■ Directors’ interests, changes in directors, loans and other transactions with directors and other key reportable events

■ The directors’ remuneration report; legal, listing and accounting disclosure obligations – including for share option arrangements

■ Proposal for high level summary remunera-tion report

■ Corporate governance statements and the obligations of management and advisors

Additional listed company statements

■ Segmental reporting obligations


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Course Content


Course Content

Course TitleDate:


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Course Overview


Financial Statement and AnalysisA 3 Day Course


Course Content

• Single segment businesses; and• Information that is commercially damag-

ing ■ Interim reports

• Required format and contents• Variations from year end policies permit-

ted

Other reporting concessions and options

■ Related party transactions and the exemp-tion for wholly owned subsidiaries

■ Consolidated and individual company state-ments of cash flow

■ Group and holding company profit and loss statements

■ Statutory concessions and exemptions from consolidation for example

■ Planned concession from audit for qualify-ing subsidiaries

Concluding points

■ Future developments and plans – the future for UKGAAP (overview)

■ Key contentious issues for advisors

Objective of financial accounting and reportingTo record, in an orderly and systematic way, historic transactions and other events that may

■ provide information that is relevant to the amount, timing and uncertainty of the enti-ty’s future cash flows;

■ have effects on the entity that are reliably measurable in financial terms and

■ be useful to external stakeholders in mak-ing decisions about the future, and spe-cifically in decisions to provide financial resources to the entity.

Basic conventions of financial accounting and reporting

■ The entity principle: the entity has definite boundaries and is separate from its owners, managements, controllers and sponsors

■ The accruals principle: transactions are recorded when the entity becomes a party to them, and not when any associated cash flows might occur

■ The going concern principle: it is assumed that the entity will not have to liquidate or curtail its operations in the near future

■ The reliable measurement principle: trans-actions and events are usually recorded only when and to the extent that their im-pact can be reliably measured in financial terms. This is a severely limits the ability of financial accounts to present what is commonly called ‘the whole picture’ of an entity

Distinction from management accounting

■ Financial accounting is primarily designed to inform outsiders about the implications of historic transactions and events on the financial condition (balance sheet), finan-cial performance (income statement) and cash position (cash flow statement) of the entity;

■ Management accounting is primarily de-signed to assist management in running the entity more profitably and efficiently, and is therefore not confined to financial measures but contains much non-financial information, e.g. about the volumes and make-up of goods and services, the time taken by processes etc.

The method of financial accounting (so-called ‘double-entry bookkeeping’) :

■ Financial accounting is a process that trac-es• the inflow and outflow of resources (as-

sets) into and out of the entity;• increases and decreases in the entity’s

obligations (liabilities) to third parties; and

• the impact of a) and b) on the entity’s owners’ residual economic interest in it (equity)

■ Every transaction or other relevant event impacts the entity’s resources and/or the entity’s obligations and/or the entity’s owners’ residual interest in it, in two sepa-rate ways

Exhaustive practical exercises in the basic recording of a wide range of transactions and events:

■ Sales: for cash, on credit, and prepaid ■ Purchases and other direct costs incurred:

for cash, on credit, and prepaid ■ Resources and obligations that impact

more than one accounting period (capex and depreciation, prepayments, accruals






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Course TitleDate:


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Course Overview


Financial Statement And AnalysisA 3 Day Course


Course Content

and deferred income) ■ Real estate transactions: purchases, sales,

sales and leasebacks, rent and other incen-tives

■ Obligations that are uncertain in timing or amount (provisions)

■ Changes in the economic value of resources (writedowns of inventory and receivables, revaluation of real estate and other assets)

■ Intangible assets and the special restric-tions on their recognition

■ Sales taxes and taxes on the entity’s own profit

■ Reconciling external confirmations to inter-nal records, e.g. bank statements

Preparing the period-end financial statements:

■ The income statement• Sales and direct expenses, leading to

gross profit• Other operating income and expense,

leading to operating profit• Finance income/expense, leading to pre-

tax profit• Taxation charge for the period, leading to

net income ■ The balance sheet (components, definitions

and layout)• Assets

■ Current ■ Noncurrent

• Liabilities ■ Current ■ Noncurrent

• Net assets• Shareholders’ equity

■ Share capital and premium ■ Retained earnings ■ The cash flow statement

• Method of preparation ■ Direct ■ Indirect

• Structure ■ Cash flow from operating activities ■ Cash flow from investing activities ■ Cash flow from financing activities

An introduction to elementary financial analysis

■ The uses and limitations of financial ratios: developing simple metrics to track• Operating profitability (e.g. gross and

operating profit, return on sales)• Operating efficiency (asset turnover/

utilisation)• Overall profitability (e.g. return on capi-

tal employed, return on equity)• Liquid assets and liabilities: volume and

velocity of conversion/circulation)• Cash flow coverage of fixed charges• Solvency: leverage and gearing





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Financial Crime Prevention ComplianceIn-House or via Live Webinar

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Course Overview

Financial Crime Compliance and Regulatory Compliance are probably at the top of nearly every Financial Institution’s risk review process and have become the key strategic imperatives for all board members.

The reputational damage and not to mention the fines imposed for non-compliance are huge concerns. It is fair to say that banks are being micro-managed by regulators in this area and are being set exceptionally high standards for compliance.

Financial institutions are required to focus increasingly on Financial Crime Prevention measures and must have robust systems in place to combat them. This includes detailed policies, clear lines of defence, robust CDD processes, a risk based approach, clear accountabilities and above all effective staff training and awareness throughout the organisation.

None of this is difficult but it is costly, time consuming and involves putting in place procedures and systems to deter, detect and protect the institution from being used by criminals.

This course is divided into two sections:

■ Day One covers the key Financial Crime Compliance (FCC) issues and ■ Day Two adopts a practical approach to assist all staff and senior staff to comply with their obli-

gations.

The course has several case studies to bring the training to life.

Target Audience

■ All staff with client facing responsibilities especially those where financial crime is a real and active risk.

■ Risk and compliance professionals, MLROs and members of the internal audit function. ■ Senior managers and top management would also derive considerable benefit from attending.

Methodology

The course is in workshop style with participation from delegates actively encouraged.

Day One:

Introduction:

■ What is Financial Crime ■ Predicate Crimes ■ What are financial institutions required to

put in place – overview ■ What is CDD, KYC, IDV. ■ Who is responsible for FC Compliance? ■ Best Practice/Poor practice

Who sets the rules and who publishes best practice guidelines?

■ FCA ■ UN ■ EEC ■ USA - OFAC ■ BIS – Basel ■ UK Treasury ■ Local Jurisdictions ■ Best Practice Guidelines

• FATF• Wolfsberg Group• Tranparency International• JMLSG• Egmont Group


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What must Institutions have in place

■ The regulatory landscape ■ Rules and Instructions ■ Traditional three lines of defence model ■ Escalation process ■ Consent and Tipping Off ■ Risk based due diligence

Sanctions – Brief Overview

■ Who sets them & why are they set ■ Who is impacted ■ What are they ■ OFAC ■ How should an institution screen for them

Risk Based Approach

■ What does this mean ■ How should it work ■ What are the key differences ■ Enhanced Due diligence – what does this

mean

Customer due diligence

■ KYC – getting to know the customer ■ IDV – checking what they say ■ Ultimate Beneficial Ownership ■ PEP’s ■ Source of Wealth ■ Review process ■ Remediation process

Politically Exposed Persons

■ Definition – formal ■ Definition in practice ■ Why are they a special case ■ Mandatory high risk ■ UBO issues ■ Source of Wealth issues ■ Annual Review issues ■ Imminent changes

Specific Identification & Verification Issues

■ Trust nominee and fiduciary accounts ■ Corporate vehicles ■ Introduced business ■ Client accounts opened by professional inter-

mediaries ■ Non face to face customers ■ Correspondent banking – KYC requirements

and Due Diligence ■ Introduced business

Constructing the FCC Framework

■ Policies ■ Roles and Responsibilities ■ Senior Management and M.I. requirements ■ The MLRO (or equivalent) challenge! ■ Risk Assessments and Procedures ■ Suspicious transactions

Suspicion & Escalation

■ What must banks have in place ■ An effective escalation process ■ Concern ■ Suspicion ■ Access & Process ■ Communication lines ■ Suspicious Activity Reports / Suspicious Trans-

action Report ■ The importance of a direct link ■ Whistle blowing

Day Two:

Practical Issues Method of Money Laundering

■ Electronic Funds Transfer ■ Correspondent Banking ■ Payable Through Accounts ■ Downstream Correspondent Clearer ■ Concentration Accounts ■ Private Banking ■ Structuring ■ Bank complicity ■ Credit Cards ■ Money Remitters & Money Exchange Houses ■ Insurance Companies ■ Securities Broker-Dealers ■ Casinos & Gambling businesses ■ Dealers in High-Value items (Art, Jewellery,

Precious Metals etc) ■ Travel Agencies ■ Vehicle Sellers ■ Notaries, Accountants, Lawyers, Auditors ■ Real Estate ■ Loan Back Method ■ Import/Export Transactions





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ML Risks – New Technologies

■ Internet Banking ■ Internet Casinos ■ Prepaid Cards and E-Cash

ML Risks – Structures to hide BO

■ Shell companies ■ Trusts ■ Bearer Bonds & Securities

Terrorist Financing

■ Differences and Similarities between ML and TF

■ Detecting TF ■ Informal Value Transfer Systems ■ Charities / Non-Profit Organisation

The Offences of ML/TF

■ Vulnerabilities of financial institutions ■ AML/CFT obligations

ML/TF Typologies and Trends (Methods, Techniques, Schemes and Instruments)

■ Attempting to circumvent client identification requirements

■ Smurfing, using nominees and/or other prox-ies

■ Use of a Broker account with little trading ■ Activity of Wash Trading

Developing a Risk Rating Framework/Criteria/ Financial Crime Analysis Know Your Employee Program

■ Screening AML program

■ Basic elements ■ Staff Training – Who, What, How, When &

Where US Patriot Act – Sec 311, 312, 313, 319(a)&(b)

Electronic AML Solution

■ Benefits ■ Functional components

Open Forum Talking Points:

■ AML Policies and Procedures - What is the dif-ference and why are they important?

■ Probability of an offence crystallising – using leading case studies

■ Risk of not reporting - using real case studies ■ Understanding what ML & TF is - dispelling the

myths! ■ Government and other Sanction risk in practice ■ Understanding the difference between KYC -

ID&V - CDD ■ Profiling customers - what does it mean? ■ Building and using trigger events ■ What do you do if you are suspicious ■ Recognising and handling suspicious transac-

tion reports ■ Human factors in money laundering risk man-

agement ■ Abuse of structures and financial services pro-

vider





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Fixed Income Portfolio Asset AllocationIn-House or Live Webinar

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Course Overview

The fixed-income asset class is very large in term of notional outstanding and comprises a great variety of different instruments such as corporate and government bonds, supranational and municipal bonds, mortgage-backed securities, inflation-indexed debt to name but a few.

This programme aims to give delegates an understanding of the key parameters, methods and models used in the allocation process. We will review some of the more recent developments in the fixed income portfolio management area, the risks inherent to portfolio management and the critical steps in investment policy. The programme will endeavour to discuss portfolio management theories, analyse their meaning for practitioners and compare current practice with empirical evidence of the theories. We will particularly focus on the various elements of portfolio construction, examining risk decomposition for portfolio management geared toward benchmarking, after an understanding of key risk factors related to investment policy constraints.

We will also discuss best practice in the approaches to the strategic and tactical allocation process, the practical use of the multi factor model, and the appropriateness and choice of internal or external benchmarking.

The workshop style programme uses a variety of teaching methods including relevant case studies, illustrative examples, multiple choice questionnaires and participant interaction to help attendees quickly grasp and internalise new knowledge.

Participants will be invited to discuss examples and case studies in groups in order to relate them to their own firm’s experience and gain a practical understanding of key concepts.

Introduction

■ Welcome, course objectives ■ Recent industry developments

• Exchange Traded Funds - ETFs, • Smart Beta • Constraint investing strategies• Outcome orientated funds

■ return orientated ■ unconstrained orientated

• The passive and active debate – 'redefin-ing active management'

■ Alpha: manager skills or good fortune ? ■ Academic evidence ■ the Fixed Income portfolio management

exception

Case Study: Analysing an outcome orientated fund historical returns versus political and macro-economic news

Risks associated with Fixed Income portfolios

■ Credit risk

■ Political risks ■ Event and jump risks ■ Concentration risk

• Asset types• Curve• Sector• Country

■ Geographical risks• Political• Regional

■ Volatility risk ■ Interest rate risk ■ Duration risk ■ Refinancing risks ■ Liquidity and funding risks ■ Systemic risk ■ Tracking risk ■ Identifying and managing riks

Case Study: Smart beta and risks

Investment policy: review and impact

■ Setting investment objectives ■ How to define constraints ■ Establishing the investment process





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Course Content ■ Setting Investment Objectives vs constraints ■ Establishing Investment Policy

• Scope, context and purpose• Investment, return and risk objectives• Risk Management

■ Selecting a Portfolio Strategy• Active• Passive• Combination• Dedication• Immunization • Benchmarking

■ Selection of assets ■ Tools to measuring fund performance ■ The performance evaluation process

Asset Allocation Strategy: a review of the theory

■ Diversification and portfolio risk ■ The flaws with Markowitz assumptions ■ Asset and portfolio risk and return ■ Capital Asset Pricing Model - CAPM ■ The meaning of Beta and expected return for

fixed Income portfolio ■ Duration « Beta » ■ Definition and use of Alpha ■ Efficient market hypothesis - EMH

• Weak form• Smi-strong• Strong form

■ EMH and active versus passive management styles

■ The flaws in the efficient market framework ■ The key advantages of the Black-Litterman

model ■ Black-Litterman compared with the standard

approach

Case Study: applications of the theories

Understanding asset allocation

■ Asset allocation decision ■ Link between portfolio construction and the-

ory ■ Understanding the cell-based approach ■ The limits of the cell-based method ■ Primary risk factors

• Systematic risk factors• Idiosyncratic risk factors

■ Multi factor modeling for portfolio construc-tion

■ Practical risk decomposition steps ■ Computation of the tracking error

■ Analysis of the tracking error ■ The role of tracking error ■ Beta-type measures ■ Rebalancing issues

Case Study: Calculating and analysing tracking errors on a portfolio return

Benchmarking ■ Defining benchmarks ■ Benchmarks compared with market indices ■ The « normal » portfolio approach ■ Benchmark choice and investment objectives ■ Strategies for benchmark-driven fixed income

portfolio management ■ Benchmark selection process ■ The meaning of risk factors in practice ■ Risk factor cascade ■ Enhanced indexing strategies ■ The issues with market-cap weighted indices ■ The „Bum“ s and other problems ■ The limits of conventional bond benchmarks ■ The use and misuse of risk-based weighting

schemes ■ Monitoring

• active return, • tracking error• tracking difference

■ Separation of alpha and beta

Case Study: using a benchmark to monitor the management of a portfolio

Final discussion and close





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ForbearanceIn-House or via Live Webinar

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Course Overview

BackgroundThe global commodity crisis in general and the widespread challenges in some economies in particular have placed the finances of many economies under considerable strain. One of the earliest casualties of these twin pressures is the ability of people at all levels in the economy to meet their commitments on time. The cries of “Can’t pay? Wont pay?” were last heard in the early nineties but will be back soon. Since then, automated debt recovery systems have become the norm but in a deep recession the computer’s inability to say “maybe, tell me more” can be a major obstacle to achieving significant levels of recoveries.

Banking/lending is and always has been a people business and whilst automation is here to stay – and has a major role – it is not the only and certainly not always the best method of persuading people to meet their obligations. The modern recoveries manager needs to employ the right balance between old fashioned collection methods and automation if he is to achieve the best returns in practice. Knowing what to do and when, is the key.

Course ObjectivesThis course is designed to provide Heads of Departments and senior staff the key skills that they require to manage the Forbearance process. The emphasis is on the practical as well as the theoretical with numerous examples and case studies throughout the course as well as in depth discussions so that delegates can pool their experiences and learn from both mistakes and successes.

Who Should Attend ■ Heads or Mangers in Recoveries ■ All senior and support staff involved in recoveries ■ Heads and Managers of consumer/personal finance

MethodologyClassroom style presentations using numerous case studies and practical examples as well as group discussions.

Knowledge Pre-RequisitesSome knowledge of bank lending and debt recovery systems would be an advantage but is not essential. The content of the course can and will be tailored to meet the needs and experience within each delegate group e.g. corporate, retail, consumer lending or all three!.

Session 1: Introduction ■ Lending refresher ■ What goes wrong and how to spot and pre-

vent it ■ Timing ■ Strategies, planning and procedures ■ Loan Modification ■ Management & monitoring systems

Session 2: What is Forbearance ■ Definitions – usually a short term relief

measure ■ Reduction or suspension of mortgage pay-

ments ■ Time periods ■ Agreement not to foreclose during forbearance

period ■ Resumption dates ■ Catch up arrangements


Session 3: Forbearance Documentation Requirements ■ Drafting the agreement ■ Waiving existing defaults


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ForbearanceContinued

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■ Borrower representations & warranties ■ Strict compliance with loan documents ■ Expiration date and early termination ■ Fees ■ Ratification of obligations ■ Confirmation of security interests ■ Release of claims ■ Arrangements after forbearance period ■ Catch up process


Session 4: EU Requirements ■ Main framework ■ Specific requirements

Session 5: When to give up ■ Basic considerations ■ Risk/reward ■ The dangers of personalising the process ■ Signs that it is hopeless ■ Public/moral duty versus cost ■ Recording write offs ■ Managing write offs ■ The role of external agencies

Session 6: Putting it all together ■ The group will discuss, implement and con-

sider the process based on examples.

END


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Fraud & Financial Services

Course Overview

With the introduction of the Criminal Finances Bill in 2017, firms will need to ensure that they have in place appropriate procedures to ensure they do not facilitate tax evasion. Tax evasion is a fraudulent act.

Depending on the nature of their fraud risks, most regulated firms will already have provision in place for the prevention and investigation of fraud. However, the methods used by fraudsters are constantly evolving. This has led to the UK legal framework placing an increasing burden upon firms to prevent certain common financial crimes.

This course provides a refresher on the provisions of both the Theft Act 1968 and the Fraud Act 2006 before linking these events with the wider risks faced by firms including, reporting requirements, data security and identity theft and the corporate offences firms may commit when targeted by fraudsters.

It also looks at financial crime investigation as well as the pitfalls faced by firms when they attempt to prevent, detect, investigate and report fraud, theft and tax evasion.

Why fraudsters target financial services firms ■ The fraud “marketplace” ■ External fraud

• Sources of external fraud• Subversion• Physical acts• Collusion

■ Internal fraud• Sources of internal fraud• Internal corruption• External corruption• Facilitation and graft• Collusion

■ The fraud triangle• Opportunity• Pressure• Rationalisation

■ Fraud methodologies• The Levy report• Private sector fraud• Public sector fraud• Recent developments in fraud ty-

pologies ■ Distance selling risk ■ Identity manipulation and theft ■ Social media manipulation ■ Links to organised crime and terror-

ism

The legal framework ■ Theft Act 1968

• Section 1, 8, 9 and 10 offences• Secondary offences

■ Fraud Act 2006• Section 2,3 and 4 offences• Secondary offences

■ Proceeds of Crime Act 2002

• Section 327, 328 and 329 offences• Secondary offences

■ Terrorism Act 2000• Section 15, 16, 17 and 18 offences• Secondary offences

■ The coming of corporate offences• Data Protection Act 1998• Bribery Act 2010• Criminal Finances Bill 2017• General Date Protection Regulation

Case study and team exercise ■ The training group will be presented

with a series of events and asked to analyse them to determine:• What types of methodologies may

have been deployed against the victims of the events?

• What offences may have occurred?

Detection and prevention ■ Product journey

• Risk analysis• Risk touch points• Mitigations• Management information• Escalation

■ The role of identity confirmation• DPA process• Weaknesses• The role of due diligence

■ The role of training• Identify• Classify• Escalate

■ Layered security ■ Victim typologies ■ Perpetrator typologies ■ Profiling ■ Transaction monitoring


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■ Automation ■ Management information ■ Communication

Investigation and reporting ■ Information gathering ■ Identifying suspects ■ Vulnerable persons’ risk ■ Record keeping ■ The role of law enforcement ■ PEACE model of interviewing

• The role and use of the caution• The role and use of recording• The role and use of notetaking

■ Knowledge and Suspicion• Police and Criminal Evidence Act • R v Da Silva• Objective test

■ File preparation ■ Reporting ■ Criminal property ■ Preserving evidence

Learning and future mitigation ■ Root cause analysis

• The 5 whys?• FME analysis• Ishikawa (fishbone) analysis• Operational risk model of firm

goverance ■ Governance structures

• Committees• 3 lines of defence• Monitoring and assurance

Case study and team exercise ■ In a two part exercise the group

will be asked to consider:• In the previous exercise,

what controls may have been breached or bypassed.

■ The group will be issued with details from an investigation file. They will be asked to consider they will be asked to consider:• What has occurred?• What offences have been com-

mitted?• What controls have been

breached?• What further investigations

should be considered?• What initial conclusions can be

drawn as to the root cause of the events.

Summary ■ Learning summary ■ Further learning opportunities ■ Summary of case studie






Course Content

Fund and Portfolio ManagementIn-House or via Live Webinar

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Course Overview

While the performance of funds in the past few years has been increasingly under scrutiny by investors, stocks, bonds and other assets such as commodities have at the same time experienced unprecedented volatility as active portfolio managers switched more frequently between risk-on and risk-off transactions. It now becomes absolutely essential to have a thorough understanding of the basics of portfolio management to be able to have a balanced view of this fast expanding industry.

During this 2 day intensive course, we will define the fundamentals of portfolio management, the different types of funds available, and examine the investment process for both passive and active management. We will also look at the theories, appreciating their limitations while focussing on current best practice. The programme will include an analysis of the pros and cons of the different types of assets available, the various investment styles and allocation strategies used in practice, and the tools available to monitor fund performance.

The course will examine how to choose an optimal asset mix, determine which is best suited given specific risk tolerance and constraints, and understand why and how portfolio managers can beat or match an index or a specific liability structure.

This 2-day intensive training course will enable participants to:

■ Describe the portfolio construction process ■ Explain the tradeoff between risk and return ■ Understand an Asset allocation process ■ Evaluate The different styles of fund management ■ Describe The investment process ■ Grasp most investment products and their associated risks ■ Differentiate between various strategies in both fixed income and equity markets ■ Understand the use of risk controls and benchmarking ■ Appreciate investment performance measurement tools ■ Attribution analysis

Day 1

Understanding the Fundamentals of Investing ■ Investors :

• requirements • objectives

■ Investment risk ■ The diversification effect ■ Investment returns from stocks and portfo-

lios• historical returns• projecting returns

Portfolio Theory ■ Evolution of portfolio theory ■ Understanding variance ■ Differentiating co-variance and correlation ■ Investment returns ■ The benefits of diversification ■ Capital Asset Pricing Model - CAPM ■ The flaws of the theory ■ Best practice

Case Study : Correlation impact on a portfolio

The Fund Management Process ■ Roles and responsibilities within a fund man-

agement operation ■ Planning for optimal portfolio returns

• setting investment objectives• constraints on the fund manager

■ Active & passive fund management ■ The active/passive debate ■ Empirical evidence

Case Study : Going through an example of investment policy

Examining the Types of Investment Fund and their Portfolios ■ Pension funds ■ Mutual funds ■ Unit trusts ■ New key regulations ■ Tracker & index funds ■ Exchange-Traded-Funds - ETF ■ Hedge Funds





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Course Content

■ Other alternative funds

Understanding the different asset classes ■ Equities ■ Bonds ■ Property ■ Commodities ■ Cash ■ Currency ■ Derivatives

Case Study : Performance comparisons

Day 2

Analysing Equity Investment Styles ■ Index and tracker matching ■ Sector rotation style ■ Geographic investment & diversification ■ Top down investing ■ Bottom up investing ■ Growth investing ■ Value investing ■ Momentum investing

Equity Investment Analysis ■ Understanding balance sheet data ■ Other key financial statements ■ Accounting and valuation ratios

Case Study : Evaluating a quoted company from a balance sheet report

Analysing Bond Investment Styles ■ Bond portfolio styles ■ Index matching ■ Liability matching ■ Bond types ■ Bond switching /swapping ■ Dedication strategy ■ Immunization strategy ■ Cash flow matching

Bond Investment Analysis ■ Understanding bond pricing ■ Bond yields ■ Duration analyisis ■ Convexity issues ■ Repayment risk ■ Refinancing risk

Case Study: Comparing bond performance

The Process of Investment Allocation

■ Strategic allocation ■ Tactical asset decisions ■ Currencies ■ Countries ■ Sectors ■ Stock picking

Evaluation of Investment Performance ■ Understanding investment returns ■ Benchmarks and benchmarking ■ The rationale of indexing ■ Risk-adjusted performance measurement ■ Attribution analysis

• superior stock selection • superior market timing

■ Global Investment Performance Standards - GIPS

Case Study : Risk adjusted performance analytics

Discussion session and closing





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Fundamentals of Loan & Transaction StructuringIn-House or via Live Webinar

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Course Overview

A two day interactive workshop style course, aimed at mid-level corporate bankers, analysts, product and client servicing and support teams wanting to gain an understanding of how credit assessment, loan structuring, cash flow analysis and loan covenants can be used effectively to ensure corporate client borrowing needs are matched and serviced by the appropriate bank loan facility.

Participants are not expected to be lending experts but a basic understanding of bank lending products and some lending exposures would be helpful

Learning Objectives

Participants will gain an understanding of how to: ■ Identify the key elements of credit risk ■ Understand the working capital cycle of a business ■ Measure, quantify and evaluate the actual borrowing needs of the client (lend them what they

need as opposed to what they want). ■ Assess the risk of lending the client what they need ■ Understand the difference between short, medium and long term loans and the risk profiles ■ Analyse the cash flows – the source of our repayment over the length of our loans ■ Select the most appropriate lending structure ■ Decide whether security is required ■ Select appropriate documentation and loan covenants to manage the loan ■ Learn how ongoing management of the loan is vital (following the bank’s money)

Methodology

Highly interactive workshop style delivery with numerous Nigerian examples to illustrate the learning points. Delegate participation is expected and will be encouraged

Session 1: Defining credit risk ■ The Basel Accords - briefly ■ What is credit risk? ■ The different types of credit risk

• Sovereign• Corporate• Retail• Systemic• Counterparty

■ How do we measure credit risk ■ The SSA environment ■ Expected and unexpected losses


Session 2: Lending Refresher - overview ■ Definitions & basic lending principles ■ Lending policies, lending strategies, lending

systems

■ Data/information collection ■ Approvals, security, draw downs ■ Management & monitoring systems


Session 3: The Credit Risk of Specific Financial products ■ Loans and overdrafts ■ Term loans ■ Project finance ■ Construction finance ■ Private public partnerships ■ Government and corporate bonds ■ Equity and mezzanine debt ■ Credit derivatives ■ Counterparty exposure ■ Trade finance ■ Mortgages ■ Credit cards

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Session 4: The Working Capital Cycle ■ Definition ■ Understanding the mechanics ■ Seasonal or non recurring cycles ■ The role of bank finance ■ The role of the overdraft ■ Understanding break even analysis ■ Understanding bankers cash flows ■ How to lend in support of the cycle ■ When an overdraft becomes a medium term

loan ■ Managing multiple cycles


Session 5: The Basic Principles of Lending ■ Appraisal techniques ■ Credit assessment ■ Business clients ■ Corporate Clients ■ Private Wealth Clients ■ Group credit appraisal ■ Development finance ■ Project finance


Session 6: Establishing the borrowers actual needs ■ What do budgets and cash flows actually

measure ■ Short, medium and long term funding needs ■ Short medium and long term lending prod-

ucts ■ SWOT analysis ■ Basic principles ■ Data collection, refining and perfection ■ Evaluation – back testing ■ Selecting the appropriate lending mix in

practice ■ What goes wrong


Session 7: Introduction to Credit Risk Strategy ■ Measuring credit risk in structured loans ■ Portfolio theory and correlation concepts ■ Contagion risks ■ Liquidity assumptions ■ The importance of time


Session 8: The different lending maturities ■ Short term finance ■ Medium term finance

■ Long term finance ■ Working capital finance ■ Trade finance ■ Project finance ■ The risks ■ Best practice ■ What goes wrong


Session 9: Understanding cash flows ■ Definitions ■ Bankers cash flow ■ What do we use them for ■ Discounted cash flow, NPV & PDV ■ Are medium term cash flows useful tools ■ What are the pitfalls ■ Where does it go wrong ■ Stress testing and scenario analysis


Session 10: Introduction to Lending structures ■ What facilities does the client need ■ What are we prepared to lend ■ Is this enough ■ Matching lending to cash flow ■ Matching lending to use of funds ■ Lending cycles ■ Economic cycles ■ Management and monitoring systems ■ Cash flow monitoring ■ Recovery management


Session 11: Do we need/want security ■ Why do banks take security ■ Does it achieve recovery by itself ■ We do lend unsecured ■ Security does not improve the underlying deal ■ Why take it then ■ Safety net ■ Risk transfer ■ The importance of guarantees ■ Type of security ■ Completion and perfection of security ■ Independent and direct bank control ■ Monitoring security post lending draw down ■ Best practice ■ What goes wrong


Session 12: Documentation ■ What do we need ■ Best practice ■ The minimum ■ The ideal ■ Covenants





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■ Undertakings ■ Key clauses ■ Managing the loan ■ Regular scrutiny ■ Report processes ■ What goes wrong


Session 13: Following Our Money ■ Why is this necessary ■ How do we do it ■ The role of the CRM ■ The role of Credit & Risk Management ■ Systems, Processes ■ Best practice ■ What goes wrong


Session 14: Course conclusion ■ Summary ■ Course win up ■ Open forum

END





Course Content

Futures, Options and Structured Products TrainingIn-House or via Live Webinar

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Course Overview

This course has been available as a public training programme in many countries around the world in particular in London, Frankfurt and Singapore. It has also been available as an in-house programme in emerging markets.

Financial Derivates have played an increasingly important role since their introduction. In some markets, they actually have become the driving force behind the movements in cash markets. Obviously a foundation in this area is mandatory.

Day 1

The Arbitrage Triangle:

■ Cash ■ Futures and Forwards ■ Options

Cash-based Structured Products:

■ FRN’s ■ Zero-coupon Bonds and Swaps ■ Step-up Coupon Bonds and Swaps ■ Amortising Bonds and Swaps ■ Roller-coaster Bonds and Swaps ■ Forward Starting Bonds and Swaps

Introduction to Futures and Options:

■ The History and Development of the Market ■ Definitions ■ Over-the Counter (OTC) versus Exchange

Traded Products ■ The Role of The Clearing House

Margining:

■ Trading ■ Novation of Contract ■ Initial Margin ■ Variation Margin ■ Intra-day Margin Call ■ Gearing

Pricing and Valuing Futures:

■ Basic Futures Mechanism ■ Pricing Futures through Cash and Carry Arbi-

trage ■ The Value Basis ■ The Carry Basis ■ The Importance of Credit

Specialities with Futures Contracts:

■ Cash Settlement ■ Physical Delivery

Bond Futures:

■ Exchange Delivery Settlement Price ■ Price Conversion Factors ■ Cheapest-to-deliver

Day 2: Options and Structured Products

Introduction to Options:

■ Definitions ■ Calls and Puts

Using Options to:

■ Gear up ■ Speculate ■ Hedge ■ Arbitrage


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Course Content

Option Trading Strategies:

■ Straddles ■ Strangles ■ Bear Spreads ■ Bull Spreads ■ Butterflies ■ Risk Reversal ■ Cylinders ■ Put - Call Parity

A Simple Approach to Option Pricing:

■ Volatility ■ The Binomial Model ■ The Black & Scholes Model ■ The Greeks (Risk measures)

Case Study: Managing the Risks ■ Delta-hedging your Option Positions

Description of Exotic Options:

■ Barrier Options ■ Knock-in and Knock out Options ■ Lookback Options ■ Best of two (Digital)

Option-based Structured Products:

■ Participation and Tracking ■ Guaranteed Return Products ■ Yield enhancement

Interest Rate Risk Management:

■ Arbitrage boundaries ■ Caps, Floors and Collars ■ Put-Call Parity for Interest Rates

Course Summary:

■ Putting Financial Instruments into Context






Housing Finance - Risks and OpportunitiesIn-House or via Live Webinar


Objectives of the training

This course will provide a forum for discussion of the various financing opportunities in the Housing Finance area and some of the features of, and structuring issues related to, various instruments that provide opportunities to gain exposure to the Housing Markets.

Course methodology

Using a mixture of presentations and mini case study examples this programme will focus on the following aspects of Housing Finance

■ Market background and some lessons from the subprime mortgage crisis ■ Different segments of the Housing markets ■ Credit risks associated with various Housing Finance options ■ Key features of selected financing instruments

For participants seeking to build their knowledge of the financial modelling of Housing Finance we suggest attendance on other programmes that concentrate on financial modelling.

Who should attend?This programme will be relevant to people working for organisations involved in the analysis and structuring of large scale Housing Finance transactions such as Banks, Institutional Investors, Sovereign Wealth Funds, Government Agencies, Social Housing organisations, Private Debt Funds, Real Estate Investors, housebuilders and advisers including:

■ Credit and Investment Analysts ■ Debt and Equity Capital Markets origination and syndication ■ Treasury Risk Managers in financial institutions ■ Credit Portfolio Managers ■ Corporate Finance personnel ■ Corporate Treasury ■ Legal advisers seeking to enhance their understanding of finance related topics

Participant pre – requisites

Limited practical experience of Housing Finance transactions will be assumed.

Participants should however already be familiar with the core principles of credit risk analysis and the fundamental features of debt and equity financing instruments.


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Course Content

Session 1Overview of the Housing Finance markets

Trends in the housing markets and implications for financing needs and risks – overview of selected IMF and OECD statistics

Providers of residential mortgage finance and different models for Housing Finance

■ Government Agencies ■ Private Sector Banks ■ Capital markets including securitisation ■ Social Housing organisations ■ Development Finance Institutions

Discussion: The credit crisis in 2008 and the role of US Government Sponsored Entities – what were the contributing factors and what has been the response?

Session 2

Housing Finance and credit risk…as safe as houses?

■ Default statistics ■ Distressed debt and overview of some ap-

proaches by governments to deal with prob-lem mortgage portfolios

■ Review of elements of the history of North-ern Rock and UK Asset Resolution to illus-trate the performance of the underlying residential mortgage portfolios and also some trends in the valuation of some traded debt instruments

■ Key elements in the credit rating of selected types of Housing Finance transactions• Residential Mortgage Backed Securities,

including risks related to both the under-lying pool of assets and specific tranches

• Covered Bonds – analysis of the mortgage pool and issuing institution

• Housing Associations, and how they have been funded

• Housebuilders, and exposure to real es-tate cycles

Case study: Rating a Housing Association debt issue

Session 3

Risks and opportunities in Housing Finance - debt

An overview of some key characteristics of selected types of Housing Finance transaction, such as

■ RMBS and tranching of the debt structure ■ Covered Bonds ■ Financings supported by Rented Housing,

both private rented sector and through social housing providers

■ Use of Public Private Partnerships, including potential support from Governments and De-velopment Finance Institutions

■ Student accommodation

Exercise: Structuring a transaction supported by rental properties

Session 4

Creating a Housing Finance Fund – Equity and debt funded

Participants make a recommendation on a Leveraged Housing Finance Fund taking into account

■ Capital structure – both debt and equity ■ Expected investor profile ■ Target returns from an equity perspective ■ Structure of the portfolio ■ Credit pricing ■ Fees

Conclusion of the programme


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IFRS Accounting for Real EstateIn House or via Live Webinar

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Course Overview

After a long period of stability, the IFRS regime for real estate assets and transactions is entering a period of rapid change and elevated uncertainty, with the imminent introduction of three major new financial reporting standards. IFRS 16 Leases, effective from 1st January 2019, substantially and controversially redraws the boundaries between operating and finance leases: IFRS 9 Financial Instruments, effective from 1st January 2018, brings all lease receivables into the scope of compulsory impairment provisioning based on expected credit losses; and IFRS 15 Revenue from Contracts with Customers, also effective from 1st January 2018, whilst retaining the basic IFRS principles for revenue recognition, calls for much more attention to be paid to the unbundling of the separate components in longer-term contracts.

At the same time, continued dissatisfaction with IFRS-based numbers, specifically as a basis for cross-border intercompany comparisons, underlines the importance of the industry-specific non-GAAP performance measures developed by EPRA.

This course has four principal objectives. It is intended: ■ to give preparers and users alike a comprehensive and tailored overview of the forthcoming changes to the

IFRS regime as it impacts entities exposed to the real estate sector, as investors, owner-occupiers, lessors or lessees

■ to give preparers of accounts a firm basis for planning the practical implementation of the IFRS and EPRA reporting regimes

■ to enable senior managers of entities exposed to the real estate sector (in whatever capacity) to modify their decision-making processes to take account of the new accounting environment, especially in those areas where the standards permit or require the exercise of significant judgement

■ to equip investors and analysts with the necessary new knowledge and skills to make informed judgements about the financial performance, condition and prospects of entities exposed to the real estate sector

The course is essentially forward-looking and is accordingly based on IFRS accounting standards as published, regardless of their EU-endorsement status or their effective dates for mandatory adoption.

At every stage, the course will pinpoint the areas of continuing uncertainty and difficulty in the new standards, whether in their interpretation, application or implementation by preparers, or in their analysis by external users.

The course makes extensive use of real-life comparative case studies and of fully worked examples.

Owned property: refresher on the (largely unchanged) accounting requirements:IAS 16, IAS 23 and IAS 40 ■ Choosing between cost model and fair value

model ■ Cost model: how to determine

• Initial cost including borrowing costs and appropriate depreciation schedule

• Identification and allocation of cost to separable elements

• Identifying relevant indicators for impair-ment review

• Estimating recoverable amount: ‘Value in use’ versus ‘Fair value less costs to sell’

■ Fair value model:• Estimating fair values (a) of unique as-

sets and (b) in illiquid markets• Setting valuation assumptions• Trading and development properties

The shifting boundary between ownership and leasing IAS 17 and IFRS 16Overview of the key differences between IAS 17 and IFRS 16

• ‘Right-of-use’ asset defined• Identifying a lease• Allocating consideration to lease and non-

lease (service) components of a contract• Interaction between IFRS 16 and IFRS 15• Measuring a lease• Leases with variable payments• Lease modifications and options (exten-

sions, terminations)• Subleases• Sale and leaseback transactions• Available options and how/when to use

them ■ Detailed examination (from perspective of all

parties) of typical transactions whose classifi-cation will change after transition to IFRS 16

■ Financial impacts• Impact of IFRS 15 and 16 on published financial statements• Impact of the IFRS 9 expected loss impairment regime for all lease receivables• Impact on bank covenants and on modification of financings

Other continuing issues (examples only) ■ Rent-free periods and other incentives ■ Tenants’ improvements ■ Step-up rents ■ Disclosures, especially regarding management

judgements, impairment and revaluations ■ EPRA performance measures, and the EPRA-

to-IFRS reconciliation


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Infrastructure Project FinanceIn-House or via Live Webinar

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Course Overview

In today’s volatile markets there is a renewed appreciation of the relatively stable long term cash flows from infrastructure investments. An increasing part of such infrastructure is by necessity being financed on a project – or limited recourse – basis. Project Finance enables companies to raise focused, risk sharing, finance in key industries and is an increasingly important method for governments to introduce private sector skills, disciplines and funding in a range of sectors. This programme will provide participants with an intensive overview of the following key elements of an Infrastructure Project Finance:

Business risk analysis ■ Review of fundamentals and key drivers of project viability, motivations of the parties involved in

an Infrastructure Project Finance and their approach.

Risk assessment ■ Overview of key risks and risk allocation

Funding ■ Principal options for governments in financing infrastructure, including PPP ■ Debt funding sources and structuring of Infrastructure Project Finance transactions ; ■ Project Finance vs. other corporate funding options; ■ Understanding the equity investors’ perspective – investment appraisal techniques and links to

cost of capital ■ Capital structuring issues – debt vs. equity and influencing factors

Structuring ■ Main commercial aspects of documentation and structuring alternatives; ■ Covenants and credit ratios

For participants seeking to focus on financial modelling, we suggest that Redcliffe Training’s Project Finance modelling courses will be more appropriate.

Target AudienceThis programme is designed for personnel working on large scale projects, with limited or no practical experience of Infrastructure Project Finance, working in organisations such as: ■ Project developers and investors ■ Investment banks ■ Equipment suppliers ■ Commercial Banks ■ Development Finance Institutions ■ Export Credit Agencies ■ Infrastructure Funds ■ Construction companies ■ Accountancy firms ■ Law firms ■ Financial advisors ■ Government and other Public Sector Agencies working on PPP and other large scale Infrastruc-

ture projects

Pre course questionnaire and training methodologyA pre course questionnaire will be sent to participants upon registration to help the Course Director deliver a training programme relevant to the participants’ needs.

During the training there will be one or two core case studies used. The focus of case studies and examples will be on typical areas of Infrastructure (such as Roads and Transport and Social Infrastructure (e.g. public sector hospitals and schools)

Participant existing pre - requisites


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Infrastructure Project FinanceContinued...

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Course Content

An overview of key issues in Project Finance

■ Overview of activity in Project Finance ■ Review of an Infrastructure Project Finance

transaction to illustrate key aspects of the transaction and subsequent developments

■ Project Finance vs. the financing of projects ■ Principal options for government in financ-

ing infrastructure projects including PPP and PFI

■ The Project Finance “route map” - an overview of the key issues in evaluating and structuring a Project Finance transaction

Exercise: review of background on a core case study to identify the motivations and objectives of the main parties to the project

Risk evaluation in Project Finance

■ Key risks – construction, operating and financial

■ Typical approaches to risk allocation and mitigation

■ Overview of the approach to a credit anal-ysis for power projects to illustrate key elements of a rating

■ Lessons from the past – what can be learned from past transactions about the value of forecasts

Exercise: participants review background on a core case study project and prepare a summarised”risk assessment” based on the risks and mitigants in the project

Sources of debt financing in projects and debt capacity

■ Rationale for Project Finance vs. other debt financing techniques

■ Debt capacity - Using projected cash flows as a basis for assessing debt servicing ca-pacity

■ Export Credit Agencies and Development Banks; bank debt vs. bonds; senior vs. sub-ordinated debt

■ Interest , foreign exchange and commodity price management issues in Project Finance

■ Potential use of credit enhancement

Exercise: review of a case study project to illustrate the debt financing

Financial yardsticks used by equity investors and the relationship of sponsors to the project company

■ An overview of the main project investment appraisal techniques, and implications in terms of risk and return and capital structur-ing of Project Finance transactions

■ Understanding the equity investor’s approach to achieving returns from the project compa-ny, including operating relationships with the project company, and cash extraction through re – financing

Mini exercise: calculation and comparison of investment returns from selected projects

Documentation and structuring issues in Project Finance

■ Rationale and structure of loan documentation ■ Key covenants ■ Construction contracts and cost overrun

guarantees – differing formats of construc-tion contracts and mitigation of construction related risks

■ Intercreditor issues, including senior vs. sub-ordinated debt

■ Third party credit support and security issues for debt financiers, including critical commer-cial issues in Concession agreements, offtake agreements, completion and cost overrun agreements, and shareholder agreements

Case study - Participants review an outline summarized Term Sheet for the capital structure, covenants, third party credit support and security for an assigned case study project



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Course Overview

This practical workshop style course is designed for relationship managers and those working in sales or supporting the sales team together with colleagues from credit department, responsible for approving finance propositions.

Invoice discounting is a significant form of corporate finance widely used by small and medium sized businesses, often alongside other asset based lending such as stock finance, hire purchase, term loans and trade finance. This course is designed to give practitioners an understanding of the peculiarities of this particular form of financing relationship, the problems which commonly arise during the recovery process and practical guidance on how to deal with risk identification and mitigation.

The training can be structured to focus particularly on risk assessment, delivery, need identification, and selling opportunities. The course encourages delegates to see issues from both the client’s and the bank’s relationship manager’s viewpoint.

The aim is to provide high quality invoice discounting to the bank’s clients in a seamless and helpful manner and to assist delegates understanding of the trade flows and the precise nature of the banking risks undertaken. The course will also demonstrate the self liquidating short term nature of most trade transactions.

Methodology:The course will be run as a workshop style classroom session, with detailed examples. Delegates are free to bring their own cases/examples to the sessions.

Level of PreparednessBeginners are welcome although a very basic working knowledge and understanding of the methods of financing domestic and International Trade would be helpful.

Course Content

Module 1: The Working Capital Cycle

■ The working capital cycle ■ Overtrading ■ A simple cash flow exercise to illustrate the

potential problems ■ Different types of working capital ■ When and how should a bank assist its

customers ■ When should the bank decline

Exercise: Working capital analysis

Module 2: Invoice discounting basics:

■ What is it? ■ The growth of invoice finance ■ Changes following Re Spectrum Plus Ltd ■ Invoice finance distinguished from lending

on security

■ The various forms of invoice finance ■ Notification and non-notification financing

(confidential versus disclosed) ■ General Risks ■ General Mitigation techniques

Exercise Case study to suit

Module 3: Setting up the Service:

■ Creating a product guidance manual ■ Setting operational parameters ■ The structure of the invoice finance agree-

ment ■ The purpose of the power of attorney grant-

ed, if used ■ The transfer of rights ancillary to the debt ■ Challenges to administration charges as pen-

alty clauses ■ The implications of Peekay Intermark


Invoice Discounting (Domestic & International)A Two Day Workshop Style Course



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Module 4: Invoice Discounting in Practice

■ Minimum/maximum size ■ Minimum/Maximum client turnover ■ Percentage advanced ■ Individual invoices or a portfolio spread ■ Secured or unsecured ■ Commercial invoices only? ■ Collection time frame – what is a normal

time-scale ■ Issues Arising out of the Assignment of

Debts ■ The importance of a legal rather than equi-

table assignment ■ Vesting debts - when does the debt arise? ■ Non-vesting debts and the prohibition

against assignment ■ The effect of notice to the debtor, if any


Module 5: Early Engagement of Financial Crime Compliance (and sanctions if overseas transactions involved):

■ FCC risks ■ Sanctions risks ■ Screening ■ Inherent risks ■ Mitigants ■ Residual risks ■ CDD, EDD, Discrete DD, KYCBCBC…. ■ Approving individual invoices versus whole

sales ledger ■ Setting operational parameters ■ The structure of the invoice finance agree-

ment


Module 6: initial Client Assessment for Product Suitability:

■ Guidelines ■ Procedural instructions ■ New versus existing customers ■ Sales ledger review – if applicable ■ Limit setting ■ Approvals – blanket and specific ■ Risk assessment outcome ■ Annual review or individual transactions


Module 7: Risk Assessment for Credit Analysis and Application Purposes:

■ Creating procedural guidelines ■ Setting parameters ■ Analysing the working capital flows ■ Break even analysis ■ Double funding risks ■ Assessing facility size and structure ■ Identifying and mitigating the risks ■ Gearing, repayment, profitability and liquidity. ■ Specific lending with identifiable maturity

dates ■ Appreciating and controlling sources of repay-

ment ■ Security – Is the last resort in practice despite

CCCPARTS


Module 8: Fraud & Conflicts with third parties:

■ The distinction between warranties, guaran-tees, indemnities and hybrids securities

■ Conflicts with third parties, including priority disputes with competing assignees

■ Fraud and Asset Recovery ■ Classic frauds faced by invoice financiers ■ Proving damage: GE Commercial Finance v

Gee ■ The meaning and effect of the trust provisions ■ When to rely upon the remedies of dishonest

assistance and knowing receipt ■ Proprietary remedies and tracing in insolvency ■ Freezing injunctions and search orders ■ Mitigation techniques


Module 9: Financing & Managing Trade Risks in Challenging Markets

■ The value chain – bank perspective versus client perspective

■ Structured vs. traditional trade finance ■ Risk analysis of a trade import deal looking at

• Credit risks• Product risks• Transactional risks





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• Price risks• Performance risks


Module 10: Charges and Fees

■ Structure and application ■ Individual fees or flat percentage charge ■ Fees and interest ■ Recourse options

Module 11: Managing the Product

■ Manual process ■ Automated process ■ Audit process ■ Roles and responsibilities ■ Fees and interest ■ Recourse options


Module 12: What to do When it Goes Wrong

■ A rare event – usually ■ KPI’s and KRI’s ■ Warning signs ■ When to intervene ■ Who actually enforces the invoice ■ Recourse agreements in practice – espe-

cially with valuable clients ■ Recovery procedures ■ Enforcing security







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Course Overview

Islamic Finance has grown considerably in the last 50 years and some estimates place the amount invested at nearly $2trillion.

The huge growth in Islamic banking has placed considerable pressure on Shariah scholars who have found themselves having to both consider and rule on a complex mix of ancient and modern banking practices. This incredible growth and the extreme pressure to provide as wide a range of banking products as possible whilst staying within the true principles of Islam has led to some pressures and this is likely to continue as an increasing number of conventional banks offer Islamic services through specialized or separate subsidiaries. This course considers these pressures and the often conflicting aims of providing ever more services whilst staying faithful to Islam.

Learning Objective

This course is designed to help delegates consider in some detail the principles of Islamic Banking and Finance, the differences between Islamic and “conventional” finance and how modern day pressures can, might and are being reconciled within the Islamic code. It looks at much greater detail at the various Islamic products on offer and considers fully the key issues facing Islamic finance institutions today

Who Should Attend

All banking and finance professionals working within an Islamic financial institution and any professionals working in the field who wish to develop their skills and understanding further.

Teaching Methodologies

Classroom lectures and interactive practical workshop format intended to affirm the learning objectives.

Course Content

Session 1: Principles & Development of Islamic Finance

■ The Islamic World ■ Islam & Economic development ■ Development & growth of Islamic finance ■ Different sectors

Session 2: The Principles of Islamic finance

■ The prohibition of Riba ■ Real & notional interest ■ Fixed & variable interest ■ Interest as a return ■ Methods of Islamic investment ■ Trade credit & leasing ■ Islamic deposits

Session 3: Modern Islamic Retail Banking – Brief history

■ History ■ Pilot schemes for Islamic banking ■ The “Islamisation” of retail banking ■ Problems for Islamic retail banks in Western

markets ■ Islamic retail banking in the developing world

Session 4: Islamic Law of Contracts

■ Wa’d - Promise. ■ Muwaada or Mua’hida Agreement - Bilateral

promise. ■ Aqd’ -. Contract. ■ Mudaraba Contract - Profit Sharing. ■ Musharaka Contract - Profit & Loss Sharing

contracts. ■ Security Contracts: ■ Wakala - Agency Contract.

Islamic Finance



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Islamic Finance

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■ Foreign Exchange (SARF)

Session 5: Islam & Takafal

■ Islamic attitudes towards risk ■ Muslim objections to insurance ■ Insurance practice in Islamic states ■ Insurance & Islamic law ■ Permitted forms of insurance ■ Forward cover & exchange risk

Session 6: Account and Deposit Gathering (“Investments” under Islam)

■ “Current” Accounts ■ Amanah ■ Wadia ■ Wakala ■ Muduraba - restricted ■ Muduraba – unrestricted ■ Ideal mix

Session 7: Application of Funds – Detailed examination

■ Mudaraba ■ Murabaha. ■ Musharaka ■ Ijara. ■ Istisn’a ■ Salam.

Session 8: Islamic Accounting Standards

■ Equities & Investment ■ Insurance ■ Foreign exchange & currency ■ Investment bond market ■ Legal issues ■ Others

Session 9: Corporate Governance ■ Jurisdiction ■ Conflicts between Sharia law, local law,

international law ■ Differences between Islamic states ■ Which law prevails ■ Basel and world Trade Agreements. ■ Regulatory framework ■ Fairness & suitability. ■ Islamic bank issues:

Session 10: Islamic Asset & Fund Management

■ Investors’ Objectives:• Capital preservation.• Maximise yields.• Balance between liquidity & profitability.• Incorporation of Islamic doctrines.• Link to Sharia’a precepts & ethics. • Legitimate goods.• Moral behaviour & social objectives.

Session 11: Islamic Bond Market (Sukuk)

■ Conventional debt securities: ■ Sukuk:

• Investment process.• Share of assets not right to revenues. • Profits & losses.• Proof of ownership.• Ownership costs.• Term matches project. • Lack of guarantee. • subject to Sharia’a rules.

Session 12: Course Conclusion

■ Summary ■ Revision ■ Open discussion

END



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Islamic Finance - IntroductionIn-House or via Live Webinar

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Course Overview

Islamic finance in its modern form is barely 30 years old yet it is a rapidly growing part of the financial sector and has survived the recent global banking crisis almost untouched. The size of the market is huge and demand for Islamic services exists wherever there is a significant Muslim community.

It is reckoned that nearly 500 financial institutions in more than 50 countries practice some kind of Islamic finance and the market has been growing at more around 10-15% per annum. Latest estimates place total assets at around US$1 trillion.

The main attraction of Islamic finance is that it offers Shariah compliant banking to its clients and is the closest yet that any banking institution has managed to get to genuinely ethical and moral banking. It is underpinned by pure principles, with integrity at the forefront and a genuine sharing of profit and losses as its credo. This has all been achieved with remarkable speed and the sector’s popularity continues unabated.

This course explains in clear terms the basic principles of this increasingly important sector and shows how these and its products differ from the conventional banking models. It is designed to teach delegates the principles of Islamic Banking and to highlight the differences between Islamic and conventional banking.

It explores the different products and services commonly found in both the GCC and the Islamic market globally and it assesses the relative advantages and disadvantages of each. By the end of the course delegates will have a full understanding of the products and principles involved in Islamic Banking and how they differ from Western banking models.

Session 1: Introduction to Islamic Banking ■ History of Islamic Banking. ■ Basic Principles. ■ Sharia Law ■ The Quran, Sunnah and Hadith ■ Sources of Islamic jurisprudence ■ The role of Islamic Scholars and the Islamic

Board ■ The meaning of Riba, Gharar, Maysir, Haram,

Halal, Fatwa. ■ Waqf & Zakat….. Charitable giving and chari-

table tax.

Session 2: Islamic Law of Contracts ■ Wa’d….. Promise. ■ Muwaada or Mua’hida Agreement….. Bilateral

promise. ■ Aqd’….. Contract. ■ Mudaraba Contract….. Profit Sharing. ■ Musharaka Contract…… Profit & Loss Sharing

contracts. ■ Security Contracts:

• Hawala….. Transfer.• Kafala….. Guarantee.• Rahn….. Mortgage.

■ Wakala….. Agency Contract. ■ Foreign Exchange (SARF).

Exercise: Describe the element of offer and acceptance under Sharia.

Exercise: What is the difference between Mua’hida and Aqd?

Session 3: What is an Islamic Bank ■ Definition - Fatwa ■ Source of funds ■ Use of funds ■ Contractual relationships ■ Profit and loss sharing ■ Banking Services. ■ Other Services. ■ Types of Islamic Bank; wholly Islamic, win-

dows or branches approach

Exercise: We will construct a typical Islamic balance sheet highlighting the key differences, especially the contractual and profit/loss sharing element.

Session 4: Sources of Funds – “Investments” ■ Islamic current accounts ■ Amanah, Wakala, Wadia – what are they? ■ Investment accounts – Mudaraba,


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Islamic Finance - IntroductionContinued...

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■ Restricted and Unrestricted Mudaraba ■ Musharaka ■ How are investors rewarded ■ Shareholders funds. ■ Trading & Investments.

Exercise: Although moral hazard probably makes this academic, consider who bears what losses in each of the different sources of Islamic funds

Case study: Explain the main differences between an Islamic bank and a conventional bank

Session 5: Use of funds – Most common products ■ Murabaha, definition, description, exam-

ples, risks, challenges. ■ Ijara as above. ■ Istisn’a ditto ■ Compare each product with their conven-

tional banking counterparts

Exercise: You have a client looking to replace commercial vehicles and not wishing to lay out substantial cash up front, how might this be achieved using Islamic banking techniques.

Session 6: Use of funds – Less common products ■ Mudaraba., definition, description, exam-

ples, risks, challenges ■ Musharaka. As above ■ Salam ditto ■ Islamic mortgages ditto ■ Islamic credit cards ditto ■ Two tier Murabaha ■ Two tier Mudaraba ■ Compare each product with their conven-

tional banking counterparts

Exercise: Why is Musharaka not more popular given that it enshrines Islamic principles completely?

Session 7: Islamic Asset & Fund Management ■ Investors’ Objectives ■ Capital preservation ■ Maximise yields ■ Incorporation of Islamic doctrines ■ Link to Sharia precepts & ethics ■ Legitimate goods

■ Moral behaviour & social objectives

Exercise: Taking into account all of the above, name areas where you feel investment activity is unacceptable or prohibited.

Session 8: Islamic Bond Market (Sukuk) ■ Conventional debt securities:

• Rights not linked to assets of company• Holders do not incur damages & losses of

company• Share in financing through usurious prac-

tices• Term not necessarily same as project• No Sharia constraints

■ Sukuk: • Investment process• Share of assets not right to revenues• Profits & losses• Proof of ownership• Ownership costs• Term matches project• Lack of guarantee• Subject to Sharia rules

Exercise: Using Dubai World as an example, consider how the recent problems might impact this important market.

Session 9: Islamic Insurance (Takaful) ■ What is Takaful ■ How does Takaful work. ■ Re-Takaful ■ Takaful products ■ Takaful models

Exercise: Takaful is a controversial subject amongst some scholars. Why is this?

Exercise: What is the difference between a Mudaraba and Wakala arrangement in a two tier Takaful model?






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Islamic Retail BankingIn House or via Live Webinar

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Course Overview

Global demand for an ethical form of banking has led to a boom in Islamic banking and it is estimated that some 600 financial institutions in more than 50 countries practice some kind of Islamic finance.

The huge growth in Islamic banking has placed considerable pressure on Shariah scholars who have found themselves having to both consider and rule on a complex mix of ancient and modern banking practices, all in the last 40 years. This incredible growth and the extreme pressure to provide as wide a range of banking products as possible whilst staying within the true principles of Islam has led to some pressures and this is likely to continue as an increasing number of conventional banks offer Islamic services through specialized or separate subsidiaries. This course considers these pressures and the often conflicting aims of providing ever more services whilst staying faithful to Islam.

Learning ObjectiveThis intermediate/advanced course is designed to help delegates consider in some detail the principles of Islamic Banking, the differences between Islamic and conventional retail banking and how modern day pressures can, might and are being reconciled within the Islamic code. It looks at much greater detail at the various Islamic products on offer and considers fully the key issues facing Islamic retail banks today

Who Should AttendAll banking and finance professionals working within an Islamic financial institution and any professionals working in the field who wish to develop their skills and understanding further.

Teaching MethodologiesClassroom lectures and interactive practical workshop format intended to affirm the learning objectives.

Learning Pre-requisitesA basic knowledge of the banking and the financial services sector in both conventional and Islamic retail markets is required. This course is not suitable for complete beginners.

Course Content

Principles & Development of Islamic Finance ■ The Islamic World ■ Islam & Economic development ■ Development & growth of Islamic

finance

The Principles of Islamic finance ■ The prohibition of Riba ■ Real & notional interest ■ Fixed & variable interest ■ Interest as a return ■ Methods of Islamic investment ■ Trade credit & leasing ■ Islamic deposits

Modern Islamic Retail Banking – Brief history ■ History ■ Pilot schemes for Islamic banking ■ The “Islamisation” of retail banking ■ Problems for Islamic retail banks in

Western markets ■ Islamic retail banking in the developing

world

Islamic Law of Contracts ■ Wa’d - Promise. ■ Muwaada or Mua’hida Agreement - Bilateral

promise. ■ Aqd’ -. Contract. ■ Mudaraba Contract - Profit Sharing. ■ Musharaka Contract - Profit & Loss Sharing

contracts. ■ Security Contracts: ■ Wakala - Agency Contract. ■ Foreign Exchange (SARF)

Islam & Takafal ■ Islamic attitudes towards risk ■ Muslim objections to insurance ■ Insurance practice in Islamic states ■ Insurance & Islamic law ■ Permitted forms of insurance


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Islamic Retail BankingContinued...

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■ Forward cover & exchange risk

Account and Deposit Gathering (“Invest-ments” under Islam) ■ “Current” Accounts ■ Amanah ■ Wadia ■ Wakala ■ Muduraba - restricted ■ Muduraba – unrestricted ■ Ideal mix

Application of Funds – Detailed examination ■ Mudaraba ■ Murabaha. ■ Musharaka ■ Ijara. ■ Istisn’a ■ Salam.

Islamic Accounting Standards ■ Equities & Investment ■ Insurance ■ Foreign exchange & currency ■ Investment bond market ■ Legal issues ■ Others

Corporate Governance ■ Jurisdiction ■ Conflicts between Sharia law, local law,

international law ■ Differences between Islamic states ■ Which law prevails ■ Basel and world Trade Agreements. ■ Regulatory framework ■ Fairness & suitability. ■ Islamic bank issues:

Islamic Asset & Fund Management ■ Investors’ Objectives:

• Capital preservation.• Maximise yields.• Balance between liquidity & profitability.• Incorporation of Islamic doctrines.• Link to Sharia’a precepts & ethics. • Legitimate goods.• Moral behaviour & social objectives.

Islamic Bond Market (Sukuk) ■ Conventional debt securities: ■ Sukuk:

• Investment process.• Share of assets not right to revenues. • Profits & losses.

• Proof of ownership.• Ownership costs.• Term matches project. • Lack of guarantee. • subject to Sharia’a rules.

Course Conclusion ■ Summary ■ Revision ■ Open discussion






Course Content



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Course Overview

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Course Content

Know Your CustomerIn-house or via Live Webinar

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Course Overview

This is a highly interactive, user friendly and comprehensive workshop for both banks and other regulated institutions and practitioners alike. It covers the KYC procedures and systems that all regulated institutions must have in place and deals with the full range of clients from straightforward retail, to higher risk clients (including PEPs) and clients who use complex structures.

Course MethodologyAn interactive workshop style course supported with case studies and discussions.

Introduction - The Money Laundering Cycle ■ Placement, Layering, Integration ■ How does this work in practice ■ Transaction profile ■ Important KYC framework ■ Operating guidelines

What is KYC? ■ How do you really know who you are deal-

ing with ■ How much do you need to know ■ The CDD process is in two parts:

• KYC – getting to know the customer• IDV – checking what they say

■ Ultimate Beneficial Ownership ■ Source of Wealth ■ Source of Funds ■ Review process ■ Remediation process

How Should KYC be applied ■ What is a risk based approach and why is

it vital ■ How do we allocate the risk category ■ What does this impact ■ EDD, KYCBCBC etc & EDD

Who needs to be subjected to KYC? ■ Definition of a Customer ■ Transaction profiles ■ Important KYC framework ■ Operating guidelines

Essential Elements of KYC Standards ■ Clear and user friendly procedures and

guidelines ■ Customer acceptance policy ■ Customer identification policy ■ Guidelines for opening accounts ■ KYC for existing accounts - remediation

Politically Exposed Persons ■ Definition – formal ■ Definition in practice ■ Why are they a special case ■ Mandatory high risk ■ UBO issues ■ Source of Wealth issues ■ Annual Review issues

Specific Identification & Verification Issues ■ Trust nominee and fiduciary accounts ■ Corporate vehicles ■ Complex Structures ■ Introduced business ■ Client accounts opened by professional

intermediaries ■ Non face to face customers ■ Correspondent banking

Constructing the KYC Framework ■ Policies ■ Roles and Responsibilities ■ Senior Management and M.I. require-

ments ■ The MLRO (or equivalent) challenge! ■ Risk Assessments and Procedures

Implementing and Managing the Total KYC ■ Escalation ■ Three levels of review for High, Medium

and Standard Risk clients ■ Due diligence (on-going) ■ Record keeping ■ Training ■ Monitoring ■ Reporting ■ Questions/Feedback/Discussion


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Course Content

Challenges with KYC ■ Staff & Client resistance ■ Embedding as part of the culture ■ The role of internal audit ■ Prevention & detection ■ Early warning systems ■ Controls, KPI & KRI

Future Course Summary, Open Forum, Close


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Course Content

Management Information Systems (MIS) for BankingIn-House or via Live Webinar


Objective

In banks and financial institutions, the management of information systems is a unique tool in order to revitalize the business process. It will also improve the business decision making using information technologies, the final goal being to gain competitive advantage on the market

Factual cases will be studied and discussed.

Approach

The program is composed of the following chapters:1. Introduction2. Foundation concepts3. Decision support systems 4. Information technologies and banking 5. An approach to computing systems and information channels 6. Development of system and strategy7. Implementation of an MIS and handling the challenges8. Enterprise and global management of information technology 9. Summary and conclusion

Methodology

The seminar is interactive including presentations and transfer of information, exchange of views, practical cases and experience.

Target Group

Audit and IT executives from the Central Bank, Bank and finance Supervision Departments, Financial Markets Authorities, Other Financial Regulatory authorities, Audit firms and departments; Bank Association and other professional bodies related to the financial markets. Executives of financial departments of companies linked to the banking world.

Day 1

Introduction Foundation concepts

■ information systems in business ■ competing with information technology

Case studies

Decision support systems

■ business and decision support ■ management information systems ■ online analytical processing (olap) ■ decision support systems ■ executive information systems ■ knowledge management systems

Day 2

Information technologies and banking

■ trends in telecommunication ■ the business value of telecom networks ■ business use of the internet ■ role of intra and extra nets

An approach to computing systems and information channels

■ Electronic commerce applications ■ E-commerce applications and issues


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Course Content

Day 3

Development of system and strategy

■ business systems ■ IT systems

Implementation of an MIS and handling the challenges

■ conceptualization ■ assessment and design ■ system development and implementation ■ system maintenance & MIS audits

Enterprise and global management of information technology

■ managing information technology ■ managing global IT

Summary and conclusion


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Modelling for Credit Risk TrainingIn-House or via Live Webinar


For banks and financial institutions a sea of changes has occurred in the past few years as a response to the credit crisis. A new capital adequacy framework, strengthened and specific credit risk regulations under Basel II / III, and recent innovations in the credit derivative arena are all highlighting the increasing scrutiny on credit issues.

More than ever before, financial institutions and large corporates will therefore have to be able to assess, calculate and model the embedded credit risk of assets as well as the risk generated by the use of counterparties for hedging or trading purposes.

This course is designed to provide professionals with a broad understanding of modern credit risk modelling techniques. During this training programme, participants will look in details at some of the more important models used for the pricing of default risk inherent to holding assets or embedded within credit derivatives.

The focus of the course together with the choice of exercises and examples will enable participants to understand the different stepping stones used in the design of the models in an easy way and the reasons why the models can be validated. Delegates will examine how different risk elements, such as interest rate, default and recovery values intertwine in those models.

Participants will be able to appreciate the credit models commonly used to calculate EAD (Exposure at Default), PD (Probabilities of Default) and LGD (Loss Given Default) as well as counterparty risk assessment models based on potential future exposure at default. We examine recent modelling issues of funding and market liquidity, basis risk and counterparty risk, and learn the meaning and use of the different value adjustments and notions such as wrong-way risk and liquidity issues.

Methodology:

This course is highly interactive with presentations, exercises, examples, workshops and discussions. It is supported by a range of computer-based exercises to help delegates put the concepts covered into practice.

Who could benefit from this training programme?

■ Credit Portfolio and Asset Managers ■ Auditors ■ Risk Analysts ■ Credit Managers ■ Financial Industry Regulators ■ Financial Risk Managers



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Course Content

Day one

Definitions of parameters used for modelling credit risk

■ Introduction to credit risk models and their parameters

■ Credit event definition and exercise ■ Loss-Given Default (LGD), Expected Loss

(EL) and probability of Default (PD) ■ Calibration of default probabilities to actual

ratings ■ Exposure at default (EAD) ■ Relationship between PD, EAD, LGD ■ Unexpected Loss (UL) ■ Economic capital ■ Loss distribution ■ Monte Carlo simulation of losses ■ Recovery rate (recovery payments)

Workshop: Computation of theoretical credit spread for an amortizing asset with given LGD, PD and EAD at different maturity stages

Market based methods

■ CDS cash flows and default risk • Unbundling a risky bond into default and

other components• Isolating underlying default risk using a

single instrument ■ Adding floating LIBOR-based payments

• Credit spread over swap rate • Default-free money market deposit –

Floating Rate Note (FRN)• Final adjustment to compensate coupon

reduction – Synthetic portfolio of cash flows

■ Real world complications and hedging diffi-culties

■ Counterparty default risk and liquidity

Exercise: Assessment of the credit spread value for an asset given the market perception of the underlying credit risk and CDS / bond market information

Concept of synthetic Credit Default Swap (CDS): Basis Trades

■ Hedging / arbitraging CDS: positive and neg-ative basis trades• Bond and structured finance issuance

■ CDS “Fair Price”: asset swap “par” spread implications

■ CDS key issues: • Over the counter (OTC) shortcomings

Exercise and discussion: Using an asset swap to uncover market credit risk spreads. Unbundling the different risk component of an asset and using CDS to mitigate risks.

Day two

Structural Firm Asset Volatility Models

■ Black & Scholes / Merton Option Pricing Ap-proach

■ Key credit risk concepts ■ Credit (default) risk as put option

Merton / KMV Model (Firm Asset Volatility Model)

■ Hybrid corporate securities. Options in corpo-rate finance

■ Credit risk: asymmetric information and agency costs

■ Structural asset volatility (Black-Scholes / Merton) models

■ Structural asset volatility (Moody’s-KMV) models

■ Embedded complexities of interim cash flows

Workshop: How to use various financial instruments to replicate an option (Black & Scholes) synthetically. How to derive Credit Spreads from a practical point of view.

Black-Scholes / Merton KMV Option Pricing Approach

■ Credit risk as a function of equity value ■ Cost of hedging credit default risk ■ Term structure of credit default risk spread ■ Distance-to-default (DD) ■ Probability of loss-given-default (PD)

Exercise and discussion: How to price a Credit Default Swap with the use of a structural model by looking at both the premium value and protection legs.

REDUCED-FORM MODELS (BASED ON INTENSITY OR TRANSITION) Part 1Jarrow-Turnbull (JT) Reduced-Form Intensity Model: Applying Term Structure Models

■ Stochastic term structure of default-free in-





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Course Contentterest rates:

■ Markov process for credit ratings ■ Stochastic maturity specific credit-risk

spread ■ Implementing a discrete-time Markov mod-

el: • Pricing risky bonds • Pricing options on risky bonds • Credit default swaps

Exercise: How to price a Credit Default Swap with the use of a reduced-form approach model such as JLT and appreciate the implications of credit ratings

Day three

REDUCED-FORM MODELS (BASED ON INTENSITY OR TRANSITION) Part 2Jarrow-Lando-Turnbull (JLT) Rating-Based Transition Matrix Technology

■ Applying Jarrow-Lando-Turnbull model • Arbitrage-free restrictions of the model • A discrete-time model in a two-period

economy ■ Credit ratings and default probabilities:

mathematics underlying the JLT model

Workshop: How to use a reduced-form transition matrix model based spreadsheet for pricing credit derivatives.

Pricing Derivatives Contracts Under Collateral Agreements in Credit Support Annex (CSA), Credit Value Adjustment (CVA) Debt Value Adjustment (DVA), Liquidity / Funding Value Adjustments (LVA, FVA)

■ Collateral agreements • Collateral (initial margin) • Variation margin • Maintenance margin

■ CSA contract agreements, aggregated base, netting set, Net Present Value (NPV)

CSA Pricing: Discrete Setting

■ Cox-Ross-Rubinstein binomial risk-neutral option pricing • Non-collateralised contingent claims,

collateralised claims, and liquidity value adjustment (LVA)

■ Liquidity value adjustment LVA: discounted NPV between risk-free rate and collateral rate

Exercise: How to assess the cost of replicating collateral account at predefined asset’s path

Counterparty Credit Risk: Wrong Way Risk, CVA, FVA, & Liquidity Issues

■ Counterparty contract risk exposure ■ Wrong / right-way risk: CVA adjustment ■ Wrong-way risk theoretical framework

• Expected positive exposure (EPE) • Default intensity (PD)

■ Credit value adjustment (CVA) of OTC deriv-atives • CDS spread (PD, LGD), EPE

■ Risk management: counterparty credit VaR ■ Credit VaR and exposure:

• Current exposure (CE) • Potential future exposure (PFE) • Credit limits – Expected exposure (EE)• Exposure-at-default (EAD)

Workshop: Analysing the various elements of Counterparty Risk with a practical example and the hedge with a contingent credit default swaps (CCDS)

Final discussion and conclusions





Operational RiskIn-House or via Live Webinar


Operational risk is one of the few risks which affect all business functions irrespective of their activities or environments. As such all business managers and team leaders have a responsibility for understanding the operational risks within their business and ensuring that they comply with their organisations policies. They are also expected to understand and implement policies and procedures which minimize the risk and to manage events when they occur. These techniques cover a multiple of disciplines ranging from people management through to data protection, many of which can improve business efficiency.

This seminar is designed to explain the fundamentals of operational risk, what it is and why it is managed, the identification and assessment process, techniques for its mitigation and management and the monitoring and reporting process.

Objectives

At the end of this seminar participants will have a basic understanding of:

■ what operational risk is and why it is managed ■ the regulatory requirements ■ the activities in managing operational risk ■ the identification and self-assessment process ■ managing operational risk events ■ monitoring and reporting ■ the use of internal and external data ■ the development and use of key risk indicators

Attendees

This seminar is designed for the front, middle and back office business functions of banks. It is intended for:

■ business managers and team leaders who have responsibility for ensuring the business function complies with their organisations operational risk policies

■ individuals who are responsible for implementing their organisations operational risk policies ■ individuals who are responsible for operational risk monitoring or reporting ■ risk managers ■ internal and external auditors who wish to gain an understanding of operational risk ■ business managers who are concerned about risk and controls ■ IT and operations professionals ■ project and change management professionals


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Course Content

Day 1 What does operational risk really mean and why does it really matter

■ What does operational risk really mean? ■ Defining the scope of operational risk ■ Operational risk terminology ■ Operational risk types ■ Types of loss – financial, regulatory, soft ■ Risk Appetite ■ Case study

Drivers of Operational Risk management

■ Why manage operational risk? ■ The Basel II Accord ■ Calculating Operational Risk capital ■ Case Study ■ The Basel III changes ■ Other cross-border

Operational risk management

■ Operational risk management activities ■ The operational risk framework ■ What falls under operational risk manage-

ment? ■ Where does the ORM team fit in an organisa-

tion? ■ The three lines of defence ■ Adopting standards ■ The main challenges

• Cyber Crime• Anti-money laundering & sanctions• Tax & FATCA• Conduct risk• Case study

■ Strategic operational risk management - gov-ernance

■ Case study

Day 2

Risk identification & Assessment

■ Risk logs/registers ■ Indentifying operational risks ■ What are Risk Control and Self Assessments? ■ Are RCSAs useful – what is there real value? ■ Questionnaires vs. workshops ■ The psychology of RCSAs ■ Case study

■ Industry sound practice ■ Risk identification, causes and classifications ■ The challenges of implementing effective con-

trols

Loss data

■ Why collect operational risk data? ■ Implementing a loss database – database

technology ■ Loss data content ■ Case study ■ The challenges of internal loss data. ■ Defining gross loss ■ Which reference date? ■ Case study ■ External loss data ■ Case study

Building scenario analysis and stress testing

■ Sensitivity analysis vs. stress testing vs. sce-nario analysis

■ Scenario analysis - uses ■ Developing credible scenarios – fact or fiction? ■ Multiple event scenarios and dependencies ■ Building scenarios and stress tests ■ Learning from past events ■ Key issues of scenario analysis ■ Case study: building a realistic scenario – what

is reasonable? ■ Including stress and scenario testing results in

capital calculations

Day 3

Mitigating operational risk ■ What is operational risk mitigation? ■ What are inherent and residual risks? ■ Mitigation techniques

• People• Technology• Processes• External events

■ Identification of key controls ■ Case study: identifying appropriate mitigating

techniques ■ The challenges of implementing effective con-

trols





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Course Content

Op risk events and their management

■ Event management ■ Event reporting

• Internal• External• Managing reputational risk

■ On-going monitoring ■ Exercise

Operational risk monitoring and reporting

■ The reporting process• Types of reports• Thresholds & escalation

■ What gives a report value? ■ Monitoring operational risk

■ Key risk indicators• What are KRIs?• The role of effective KRIs• Types of KRIs• Developing and designing key risk indica-

tors• Case study• Evaluating KRIs

■ Business continuity planning vs. Disaster planning

What Next?

■ What are the problems in practice? ■ The ‘use test’ ■ What next – future flashpoints?





Course Content

Practical Understanding of Current Debt MarketsIn-House or via Live Webinar

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Course Overview

This course is aimed at professionals with an existing knowledge of financial markets and financial products, either with knowledge through theory, studies or direct practice.

The aim of this course is to enable participants to understand and analyse the characteristics and inherent risks of capital and debt instruments in the context of global financial markets and of its main participants

MethodologyClassroom lecture style supplemented by workshops, practical exercises and up-to-date and relevant case studies.

Level of PreparednessIntermediate working knowledge of financial services industry would be helpful.

Financial markets and financial products: How they operate ■ Corporate

• Type of issuers• Type of products

■ Banks: Sell side• Major actors type of products• Role in structuring a deal

■ Institutionals and Asset Manager: Buy side• Asset allocation• Performance and risk considerations

Theory of Pricing ■ Bond pricing basics and market theory ■ Yield curve analysis ■ Spread analysis and pricing of bonds ■ Rating analysis ■ Benchmarks and Govies ■ Swap curve ■ Coupon ■ Reoffer ■ Fees

Government Securities ■ Gilts ■ Short, Medium and long term government

debt ■ The yield curve ■ Redemption and running yields ■ Duration ■ Inverse yield curves ■ The impact of quantitative easing

Hedging Interest Rates ■ Asset swapped bond transactions ■ Default swaps and total return swaps ■ Baskets and Indices ■ Basket Default Swaps ■ Index tranche transactions ■ Credit/Default linked notes

Securitisation and credit derivatives products ■ History and current market ■ Types of products: ABS, MBS, CDO, CDS ■ Motivation of securitisation deals and credit

derivatives products ■ Major actors and various markets

Securitisation products explained ■ ABS – credit card, car loans, consumer loans,

student loans, non performing loans (NPL), Refinancing (plane leasing, Energy, Royalties, Industrials,…), ABCP…

■ CDO-CBO, CLO, CDO^2, CDO (private equity, Hedge funds), emerging CDO, High Yield CDO

■ MBS, CMBS. RMBS, REIT ■ CDS, synthetic securitisations ■ Specific risk products (weather derivatives,

CAT Bonds) ■ Esoteric securitisation –Wholesale securitisa-

tion, principal finance

High Yield Bonds ■ Overview of the market ■ Current Uses ■ How issued, pricing, maturity etc ■ Who can access the market ■ A versatile asset class ■ A driver of liquidity ■ A replacement for bank debt

Convertible Bonds ■ What are they ■ Who can issue them ■ How are the y priced ■ Maturity and call options ■ Use as a financing tool ■ Cost of capital considerations

Bank Capital and Debt instruments ■ Basel III definitions


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Course Content

■ Tier 1 & tier 2 ■ Co Co’s, the new hybrid ■ Debt issuance by bank ■ Criteria for tier 2 inclusion ■ Maturity ladder

The impact of current market conditions ■ Bank deleveraging ■ Inflation ■ Yield curve ■ Quantitative easing ■ Fixed versus floating

Currency Considerations ■ The big five ■ PIGS & BRICS ■ Impact on bond prices ■ Relationship between interest rates & bonds ■ Hedging ■ OTC versus exchange traded


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Preparing and Reviewing the ICAAPIn-House or via Live Webinar


This course is designed to prepare and review an institution’s Internal Capital Adequacy Assessment Process – ICAAP. Throughout the course the delegates will progressively construct a high level plan aimed at the preparation and review of the ICAAP.

As banks strive for value creation in a highly competitive environment they inevitably create risks. The greatest threat to an organisation is when such risks are not completely and properly identified, measured and managed leading to inadequate capital provision. In these circumstances the result will invariably be unexpected losses which, as the current financial crisis demonstrates, can erode capital to the point where banks’ very existence is threatened.

The ICAAP is the document that will describe the organisation’s approach to the assessment and management of risk and capital from an internal perspective and how risk and capital management is integrated and used in running the business over and above the minimum regulatory rules and capital requirements of Basel II. Given the significant role effective risk and capital management plays in day-to-day operations, the ICAAP invariably becomes a high profile and vitally important document for key stakeholders including the bank’s Board and regulators.

Learning ObjectivesParticipants will gain in-depth knowledge of approaches to risk and capital management and their presentation in the ICAAP.

Who Should Attend ■ Risk Managers ■ Internal and Credit Auditors ■ External Auditors ■ Audit Directors and Managers

MethodologyClassroom style lectures featuring use of real-life case studies. Each session will conclude with a discussion of the principles covered, their relevance and application to the ICAAP and the associated plan.

Knowledge Pre-RequisitesParticipants should have some familiarity with financial services and principles of risk and capital management.


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Course Content

Session 1: The Essence of Risk Management ■ Understanding risk management ■ Confidence Levels – General ■ Confidence Levels – Banking

Session 2: The Basel II Framework ■ Basel II Overview ■ Why regulatory capital?

Discussion: agree ICAAP content and plan

Session 3: Risk Based Capital and Capital Management ■ Economic capital and profit ■ A modern capital management framework ■ Components of capital management:

investment, structuring, allocation and optimisation

■ Classes of capital – Tiers 1, 2 & 3 ■ Funds Transfer Pricing – FTP ■ Activity Based Costing – ABC ■ Regulatory vs. economic capital


Session 4: Internal Capital Adequacy Assessment Process (ICAAP) ■ The key principles ■ Suggested framework, content and layout ■ Prudence and conservatism ■ Period to be covered ■ Proportionality... how many ICAAP’s? ■ The ICAAP process from preparation to

Board approval ■ Challenge and independent review ■ Capital position – suggested content and

layout ■ Regulatory & economic capital – suggested

content and layout ■ Capital reconciliation – suggested content

and layout ■ ICAAP ‘Hot Buttons’ and regulatory feed-

backDiscussion: agree ICAAP content and plan

Session 5: Operational Risk ■ Definition ■ BIS Sound Practices ■ Operational risk loss distributions ■ How exposure to risk is created ■ The impact of operational risk ■ Basel II – Basic Indicator Approach ■ Basel II – Standardised Approach ■ Basel II – AMA Requirements

■ Conventional op risk management tools & methods:• Process & control mapping• Risk & control assessment processes• Risk & control registers• Loss event data – purpose• Loss events – sample definitions• Sample Calculation of Financial Impact• Sample impact categories• Loss event capture – sample data• Basel II – loss event types• Key Risk Indicators – KRIs• KRI – best practices


Session 6: Is Op Risk a Measurable Risk? ■ Observations from industry leaders:

• Basel Committee• UK FSA Op Risk Governance Expert Group• A Corporate Head of Operational Risk• USA Advanced Measurement Approach

GroupA Corporate Op Risk Executive Session 7: Credit Risk ■ Risk drivers (PD, LGD and EAD) ■ An evolutionary approach ■ Standardised Approach ■ Internal Ratings Based (IRB) approach ■ Foundation approach ■ Advanced IRB and portfolio approaches ■ Basel II – the use test and its application in

practice ■ Procyclicality ■ Downturn LGD vs. Through-The-Cycle LGD


Session 8: Market Risks ■ Definition ■ Basel II – trading book – two approaches ■ Value-at-Risk (VaR) and VaR methods ■ Typical parameters for VaR ■ Basel II market risk capital ■ Back testing ■ VaR limitations


Session 9: Liquidity Risk ■ Definition ■ Asset Liability Management (ALM) ■ Yield curves ■ BIS sound principles ■ Sample liquidity gap ■ Sample maturity ladder





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Course Content


Session 10: The Current Financial Crisis ■ Unidentified, unmeasured risk is a killer! ■ Are we getting it right? ■ Case study – the subprime fiasco ■ Collateralised Debt Obligations - CDOs ■ Credit Default Swaps – CDSs ■ Understanding probabilities (copulas) ■ Model Risk ■ The regulatory response

Session 11: Business Risk ■ Definition ■ Why calculate business risk capital? ■ Method of calculation


Session 12: Inter-Risk Diversification ■ What is inter-risk diversification? ■ Understanding diversification benefits ■ Allocation of diversification benefits ■ Standard & Poor’s view of diversification

Discussion: agree ICAAP content and plan Session 13: Other Risks ■ Transfer risk ■ Interest Rate Risk in the Banking Book (IR-

RBB) ■ Property risk ■ Equity (investment) risk ■ Foreign currency translation risk ■ Reputational risk ■ Securitisation risk ■ Pension risk ■ Settlement risk


Session 14: Stress Testing / Scenario Analysis ■ Definition ■ BIS – Sound Principles ■ Key concerns ■ Sample process ■ Sample stress scenarios ■ Sample outputs ■ Stress testing single high impact events –

‘Shock Waves’Discussion: agree ICAAP content and plan

Session 15: Risk Appetite ■ Definition ■ Counting down to failure... where’s the pain

threshold?

■ Critiquing a risk appetite statement submitted for Board approval


Session 16: Wrap-Up and Final Discussion ■ ICAAP preparation... what’s the plan?





Course Content

Private Banking & Wealth ManagementIn-House or via Live Webinar

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Course Overview

These are both exciting and challenging times for the Private Banking and Wealth Management sector. The industry continues to grow strongly with the emerging markets, notably Russia, the Middle East and Asia creating a steady stream of new high net worth individuals.

This course offers an opportunity for staff engaged in private banking / private wealth management to equip themselves with the skills to formulate innovative strategies, improve their customer relationships and effectively manage their clients’ wealth. The focus of this course is on equipping delegates to help their bank to grow and win new business, to retain and develop existing client relationships and to defend against clients leaving.

Learning Objectives ■ Upon the completion of this training event participants will have gained an understanding of ■ Growth and opportunities in the private banking market ■ Private client profiling and changing characteristics ■ Private client requirements and expectations ■ Appealing to both macro and micro markets ■ The challenges of investor choice ■ Asset allocation and portfolio structuring techniques ■ Structured products and solutions for private banking clients ■ How to make a high quality service deliver rewards for the bank as well as the client ■ Risk reduction and return enhancement opportunities and strategies

Session 1: Introduction to Private Banking Industry ■ What is Private Banking ■ A brief history of the industry ■ Products & Services ■ Classification of the main global/regional

players ■ Organisation & structure of a Private Bank ■ Defining roles: teamwork or superstars ■ Cross-selling problems & solutions

Case Study/Practical Example

Session 2: Know Your Customer, client profiling Process ■ KYC obligations ■ PEP accounts ■ AML regulations ■ Customer Life cycle (student loan, car loan,

housing etc) ■ Investor life cycle – accumulate, consoli-

date, retirement. ■ Client balance sheet, sources of income,

wealth & risk ■ Clients paradigms ■ Customer lifecycles in relation to sales

process.Case Study/Practical Example

Session 3: Private Banking services ■ Difference between accounts, customers &

clients ■ Private, retail, business or a mix ■ Cash management ■ Deposits ■ Loans and overdrafts ■ Premium services including credit cards ■ Strategic tiering of bank relationships


Session 4: Products & Development for Private Banking ■ Core private bank products – the essential or

minimum range of products ■ Risk profiling – green, orange and red lights ■ Traditional v alternative investments & hedge

funds ■ Principal guaranteed products ■ Outsourcing part of the investment manage-

ment – do’s & don’ts ■ Defending against huge competitors ■ Asset Management – discretionary/advisory ■ Securities brokerage ■ Retirement planning ■ Tax & trust advisory services ■ Collective investment schemes ■ Art jewellery & other investments


Session 5: Client Relationship Management ■ General framework for CRM and consultative


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Course Content

selling skills ■ Investment needs ■ Interpersonal skills for selling ■ Converting features into benefits ■ Concierge services ■ Philanthropy


Session 6: Critical Management functions ■ Information technology & operating plat-

forms ■ Human resources & private banking

Case Study/Practical Example Session 7: The role of the Private Banking Client Relationship Manager (CRM) ■ CRM in general ■ The CRM’s perspective ■ The client’s perspective ■ What makes a good CRM ■ Dealing with success & disappointment

Role play/case study

Session 8: Marketing Private Banking Successfully ■ Client needs & strategy ■ Objection handling ■ The dos and don’ts of meetings ■ Differentiation & Positioning ■ Linking features to benefits ■ Negotiation versus selling ■ Planning the negotiation ■ Negotiating successfully & Negotiation styles ■ Closing the deal ■ Cross selling opportunities


Session 9: Dealing with Challenging Wealthy Clients ■ The “problem” client ■ Overcoming Client resistance ■ Gaining commitment ■ Overcoming difficulties when Shariah inter-

venesRole play/case study

Session 10: Essential Self Management Skills ■ Time management ■ Planning ■ Monitoring delegated activities ■ Time out sessions ■ Internal records


Session 11: Key Treasury Products in Private Banking ■ Conventional Treasury Products ■ Interest rate swaps explained and construc-

tion examined. ■ Cross currency swaps ■ Market participants and their motivations. ■ Forward Rate Agreements (FRA) ■ Foreign Exchange Derivatives ■ Puts & Calls ■ Uses of options

Role play/case study Session 12: Credit Derivatives and Private Banking - Introduction ■ The roles of the protection buyer and protec-

tion seller ■ Constraints of transactions ■ The role of the intermediaries ■ Forms of Credit Derivatives

• Credit Default Swaps (CDS) • Total Return Swaps• Contingent & Dynamic Default Swaps

Session 13: Structured Finance in Private Banking - Introduction ■ Bringing borrowers and lenders together with

“bespoke” structures ■ The development of investment vehicles using

embedded derivatives• Structures using Special Purpose Vehicles

(SPV)• The roles of the various parties in such

structures• Enhancements & risks

■ Credit Linked Notes and other similar prod-ucts • Mortgage Backed Securities• Collateralised Loan Obligations• Collateralised Bond Obligations

Session 14: Asset & Fund Management ■ Investors’ Objectives: ■ Capital preservation. ■ Maximise yields. ■ Balance between liquidity & profitability ■ Incorporation of Islamic doctrines. ■ Link to Sharia precepts & ethics. ■ Legitimate goods. ■ Moral behaviour & social objectives.

Case Study/Exercise

Session 15: Risk Management & Compliance in Private Banking ■ Value at risk ■ Reputational risk ■ Client confidentiality





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Course Content

■ Basel II and IIICase Study/Exercise

Session 16: Marketing, Communications & Managing the Brand ■ Creating & developing the brand, image &

style of the Private Bank ■ Positioning the bank, products and the peo-

ple ■ Communications, PR, sales & marketing

literature ■ Client marketing – broad brush v narrow ■ Marketing via adverts, the web, sponsorship,

annual reports





Course Content



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Course Overview


Course Content

Real Estate Finance for Commercial Lenders – Investment Lending


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Course Overview

This course is a thorough review of the key factors which need to be considered by lenders when funding residential and commercial investments. It considers the key issues using a variety of relevant examples and case studies to bring the session to life and ensure it is firmly rooted in real World issues.

It covers a variety of technical considerations designed to boost the knowledge of existing practitioners and sets out the key cashflow and capital value risks. It also sets out the appropriate mitigants lenders need to consider. It is appropriate for anyone working with SME and mid-corporate residential or commercial investment customers/risk.

Learning Objectives: ■ Participants will explore the key issues facing investors and how they impact on the lender. ■ They will consider the technical issues which can impact investment performance and value -

with specific reference to key commercial investment issues and terms. The programme will also consider the role of due diligence and specifically the drivers of commercial investment valuation methodologies

■ Delegates will also learn about the key areas of risk for the Bank and consider how they can be mitigated by effective lending policies and practices.

Course Methodology:Classroom style delivery with maximum use made of relevant mid-market UK based case studies and exercises. Highly interactive programme with delegate participation and questioning strongly encouraged and featuring throughout. The classroom session will also be boosted by a short amount of pre-course reading to provide background information and ensure all delegates have a consistent minimum level of awareness and knowledge prior to the session.

Target Audience:This course is aimed at real estate finance lenders working with UK SME and mid-market real estate customers. The course is suitable for both Credit and relationship management staff. Some existing knowledge of the sector is desirable but not necessary, as the pre-course reading element will ensure a minimum common platform of core knowledge.

The course will initially consider a series of introductory issues which are relevant to the investor and so impact Bank support for investment deals:

■ Why do people invest in property:• Alternative investment classes and op-

tions. How does property stack up rela-tive to the other options?

• Classes of investors – Corporates, profes-sional investors and amateur / buy to let landlords

• Why is gearing so important to investor returns?

■ What factors need to be considered:• Tenure• Lease terms (including term, breaks, rent

reviews, insurance, Tenant Act, forfei-

ture, sub-letting and alteration)• Costs:

ӹGross to Net income ӹCapital expenditure ӹVoid holding costs ӹPurchaser costs including Stamp Duty Land Tax

■ What makes a good investment Asset (by asset class):• Offices:

ӹLocation and physical prominence ӹFloorplate and specification ӹTransport and occupier demand ӹFlexibility

• Industrial: ӹTransport, local access and location ӹYard and building specifications ӹSecurity


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ӹLocal labour and population pool• High Street and Shopping Centre Retail:

ӹFoot flow and prime location ӹAnchor tenants ӹFrontage and building shape ӹ Importance of leisure and food and beverage offering

• Retail Warehouses and Out of Town Retail: ӹTransport, parking and congestion management ӹFlexible units with appropriate planning use consents ӹCatchment area and competition ӹScale

• Residential: ӹAddress prominence and kerb appeal ӹDiffering needs of different occupier groups – transport links, retail and leisure access or local schools ӹParking and services provided ӹWhat other factors do investors need to consider:

• Growth prospects – impact of economic performance and market trends (e.g. trend to greater on-line retailing or rise in young professionals renting)

• Capex spend and EPCs• Opportunities to add value• Occupier demand characteristics• Investor demand characteristics

■ Property Returns:• Income and cashflow:

ӹ Income and costs ӹDemand ӹVoids ӹSustainability ӹCapex/maintenance requirements ӹLease terms

• Capital growth: ӹNet income ӹ Investor demand

Valuation Methodologies – we will then examine the importance of valuations to investment assets and the key approaches valuers use. We will consider how they can impact on investment performance and Bank risk

■ RICS Valuation Standards – the Red Book • Definition of “market value” and “mar-

ket rent”• Measurement rules• Special Assumptions• Valuation approaches and the level of

due diligence undertaken ■ Valuation Methods:

• Direct Capital Comparison: ӹRelevance ӹselection

• Investment Method:

ӹAll risk yield ӹFactors to be considered

• Discounted Cashflow method: ӹPrinciple of time value of money ӹWhen used and the selection of a discount factor

• Residual Appraisal: ӹWhen used to value development opportu-nities ӹMethodology and selection of developer profit

• Vacant Possession values: ӹWhen they are used ӹWhat assumptions need to be made

■ Impact of specific events on valuations:• Valuation of a rack rented property• Impact of over-renting (eg due to the im-

pact of an RPI leases)• Approaching lease breaks and short leases• Tenant defaults

Exercises: This session is facilitated using a series of short exercises and discussions to draw out the key issues. Working in small teams and presenting and discussing issues features throughout

The Lending Banker’s Perspective - we will explore the key Bank response and strategy to both residential and commercial investment lending, using a three step approach:

The Customer: ■ Strategy and Skills:

• What is their motivation and are they com-mitted full time?

• What experience do they have? How rele-vant is it – location, asset class. Have they had “through the cycle” experience?

• What is the range of skills for larger teams – are they complimentary?

• Is there any previous experience on the same scale and level of complexity?

• What if any professional qualifications/expe-rience do they have

• What professional support do they have available?

• How strong are their rent collection and as-set management skills – especially for large resi investment portfolios?

■ Cashflow:• How strong is their cashflow – can they

cover any voids, undertake any capex which may be required?

• Whose cash is it – the management or ex-ternal/3rd party investors and why does this make a difference

• What other assets do they have available – if there were to be a problem could they inject more cash. Are assets easily liquidat-ed to create cash if needed?

• Are there any living expenses/management





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charges to be deducted from the cash-flow?

The Asset: ■ Cashflow and Rental Issues:

• Location and suitability for target market• Demand in local market and forecast

changes to demand and demographics• Lease terms and Re-let risks for commer-

cial investment assets: ӹLease length ӹWAULT ӹTenant strength ӹLease breaks ӹRent Reviews ӹLease Terms

■ Costs for both residential and commercial assets – why the “real” costs should be as-certained wherever possible

The Structure: ■ Borrower Issues:

• Who is the borrower – is it a sole trader, partnership, Corporate entity or simple SPV and what are the implications for the Bank?

• Is a guarantee appropriate? ■ Structure of Bank Support:

• Should we lend against capital values or cashflows?

• Differences between residential and com-mercial investment loans

• Suitable support levels and the key con-siderations

■ Due Diligence:• Valuation due diligence • Legal due diligence including the report

on title ■ Capital Values

• Impact of yield movements• Impact of cashflow changes

■ Documentation and Security:• Key clauses included within bank facility

agreements and mortgage documentation• The key investment covenants and difficul-

ty in setting a traditional net rent covenant in a low interest rate environment

• Mortgages, debentures and guarantees• Actions available (and sensible) on default

or breach ■ Structure and Repayment:

• Tenor• Cashflow and structuring assumptions

– use of an appropriate Excel model to monitor cash

• Interest rate protection – fixed rate or hedge

• What constitutes a viable Plan B?

Case Study: This course is closed using two real-life case studies. One is a residential investment scheme and the other a multi-let commercial investment scheme.

Delegates are invited to consider the key risks and their response to them. They are asked to consider the appropriate basis of Bank support and the structure which should be used to manage and control the Bank’s risk. They should provide a clear recommendation and basis of support




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Course Content

Real Estate Finance for Commercial Lenders – Residential Development


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Course Overview

This course is a thorough review of the key factors which need to be considered by lenders when funding residential development. It covers all phases from initial design and grant of planning permission, through pre-drawdown controls and due diligence, the construction and monitoring phase, through to practical completion and sale.

It covers a variety of technical considerations designed to boost the knowledge of existing practitioners and sets out the key risks and appropriate mitigants lenders need to consider. It is appropriate for anyone working with SME and mid-corporate residential development customers/risk

Learning Objectives: ■ Participants will explore the key issues facing residential developers and how they impact on the

lender. ■ They will consider the technical issues which can arise during the construction phase, and the

due diligence the Bank would undertake to help mitigate them ■ Delegates will also learn about the key areas of risk for the Bank: - construction risk, sales risk,

customer risk, cashflow risk and documentation risk and explore how they can all be mitigated by effective lending policies and procedures.

Course Methodology:Classroom style delivery with maximum use made of relevant mid-market UK based case studies and exercises. Highly interactive programme with delegate participation and questioning strongly encouraged and featuring throughout. The classroom session will also be boosted by a short amount of pre-course reading to provide background information and ensure all delegates have a consistent minimum level of awareness and knowledge prior to the session.

Target Audience:This course is aimed at real estate finance lenders working with UK SME and mid-market real estate customers. The course is suitable for both Credit and relationship management staff. Some existing knowledge of the sector is desirable but not necessary, as the pre-course reading element will ensure a minimum common platform of core knowledge.

The pre-Construction Phase ■ Planning and design

• The difference between outline and full planning permission

• Planning conditions and reserved matters• Bats, newts and Romans• Judicial review process• S106 and the Community Infrastructure

Levy ■ Site issues:

• Flood risk• Environmental Contamination• Rights of Light• Party Walls• Access issues and ransom strips

■ Procurement and Construction:• The development appraisal• Costings and contingencies – why fixed

cost contracts are desirable but hard to really achieve

• Procurement methodology – self-build or third party construction management (in-cluding project manager, traditional build, or design and build)

• Construction tendering and contractor selection

The Construction and Monitoring Phase ■ Time and cost overruns

• How they typically arise• Borrower or contractor responsibility:

ӹChanges in specification ӹWeather delays ӹSite problems

• Build cashflows• Contractor failure• Liquidated damages clauses• Practical completion

The Sales Phase ■ Pre-sales or sales off-plan ■ Identification of the end buyer/market in the

early design phases


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Real Estate Finance for Commercial Lenders – Residential Development

■ Effective marketing strategies ■ What happens if sales are delayed? ■ What contingency options are normally ap-

propriate?

Case Study: The above sessions will be facilitated using a real-life UK case study. It will take the delegates through each of the key stages of a scheme and allow them to explore the issues in each phase and consider the impact on the borrower (and the Bank). It will consider what options and remedies may be available in each circumstance and discuss the customer options and the Bank’s stance.

The Lending Banker’s Perspective:Drawing on the first case study exercise we will explore the key Bank approach to residential development lending, using a three step approach:

The Customer: ■ Strategy and Skills:

• What is their motivation and are they committed full time?

• What experience do they have? How rel-evant is it – location, asset class. Have they had “through the cycle” experience?

• What is the range of skills for larger teams – are they complimentary?

• Is any previous experience on the same scale and level of complexity?

• What if any professional qualifications/experience do they have

• What professional support do they have available?

■ Cashflow:• How strong is their cashflow – is all cash

invested up-front ahead of the Bank?• Whose cash is it – the management or

external/3rd party investors and why does this make a difference

• What assets do they have available – if there were to be a problem could they inject more cash. Are assets easily liqui-dated to create cash if needed

• Is some of their contribution really just “quasi” contribution eg from a planning gain uplift in land values?

• Are there any living expenses/project charges to be deducted from the cash-flow?

The Asset: ■ Demand and Sales Issues:

• Location and suitability for target market• Size of units and liquidity / demand in

local market• Scale of development and absorbability• Marketing

■ Construction Issues:• Summary of Bank responses to the risks

identified in the first session, specifically:• The role of the Independent Monitoring

Surveyor (IMS)• The initial IMS report• Drawdown monitoring and WIP valuation

issues• The role of the RM site visit• Managing cost overruns

The Structure: ■ Borrower Issues:

• Who is the borrower – is it a sole trader, partnership, Corporate entity or simple SPV and what are the implications for the Bank?

• Is a guarantee (either for cost overruns or to tie in the management) appropriate?

■ Due Diligence:• Valuation due diligence including residual

land valuation methodologies and use of relevant comparables

• Legal due diligence including the report on title

• Monthly IMS reporting ■ Documentation:

• Key clauses included within bank facility agreements and mortgage documentation

• The key development covenants• Actions available (and sensible) on default

or breach ■ Security:

• Legal mortgages (and/or debenture)• Use and purpose of collateral warranties

■ Structure and Repayment:• Tenor• Cashflow and monitoring controls• Land loans and why they are much more

risky• Overdrafts and why they should not feature• Handling time extensions

■ Formulating a “Plan B” ■ What happens if things go wrong ■ What should the Bank response be? ■ What sensitivities are appropriate ■ What is the normal contingency option for the

Bank

Exercises: This session is facilitated using a series of short exercises and discussions to draw out the key issues and identify why they impose a risk on the Bank and what can be done to help mitigate them

Case Study: This course is closed using a real-life case study of a residential development deal of the type regularly seen by UK banks. Delegates are invited to consider the key risks and their response to them. They are asked to consider the appropriate basis of Bank support and the structure which should be used to manage and control the Bank’s risk. They should provide a clear recommendation and basis of support


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Repo and Securities LendingIn-House or via Live Webinar

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Course Overview

This Repo and Securities Lending course provides full coverage of the important aspects of repo trading and the pertinent issues involved in Securities Lending. It is relevant for in-house lawyers and private practice lawyers alike as well as bankers and repo traders involved in anything from the day to day business as usual plain vanilla repos to the more complex heavily negotiated repo trades involving structured securities or unusual assets. This course will also be relevant to the Operations and Documentation teams involved in repo transactions from time to time, structurers, compliance personnel as well as accountants who advise clients on repo trades.

The first part of this course sets the scene by giving an introduction to repos; the development of the repo market in Europe, the legal and economic characteristics of repos, the definitions and terminology ‘jargon’ that is commonly used in the repo market and the uses and benefits of repos. We then go through the various types of repo products in the market and discuss the risks, mitigants and distinguishing characteristics of repos.

The second part of the course covers the architecture of the GMRA documentation framework. Here we will go through the key provisions of the GMRA and discuss topical issues relating to and affecting the repo market. We will go on to discuss the 3 levels of activity in the repo market followed by a detailed step by step analysis of how a repo trade is negotiated and executed. We then cover the pertinent issues in the regulation of the repo market in Europe.

The third part of the course will cover an overview of Securities Lending; what it is, the reasons for it, the parties involved in it and the advantages and disadvantages for using it. We will discuss the legal structure and the various risks involved in Securities Lending. We will then go on to analyse the GMSLA documentation and the key provisions. We will undertake an analysis of the relevant case law in this area following which we will discuss the regulations effecting Securities Lending and the upcoming regulatory changes and considerations to be aware of. We will specifically discuss the much talked about Securities Financing Transactions Regulation (SFTR), its requirements and the timeline.

Please note that the sections on regulations are subject to change depending on the time of the year this training course is delivered as per the regulations and guidance that are published from time to time.

Complimentary materials including content filled presentation slides, the GMRA and relevant articles will be provided to all participants.


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Repo and Securities LendingContinued...

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Course Content

INTRODUCTION: REPO OVERVIEW

The Legal and Economic Characteristics of Repos

■ Definition of a Repo ■ “True Sale” title transfer ■ Rehypothecation ■ Enforcement ■ Substitution ■ Similarities to Secured Loans ■ Cashflows ■ Definitions and Terminology (Jargon):

• Haircuts• Income• Manufactured Payments• Repo Rates• Pricing Rates

■ Fungibility issues ■ Uses of Repos:

• 4 basic functions: ■ Secured Financing ■ Covering Long or Short positions ■ Monetary Policy Instruments ■ Creating Leverage ■ Types of Securities used in Repos:

• Government bonds• High grade bonds• Credit Repos

■ Participants in the Repo Market• Buyer’s side• Seller’s side

■ Types of Repos and similar transactions ■ Distinguishing Characteristics of Repos ■ Risks in a Repo

• Counterparty credit risks• Collateral risks• Transferability• Collateral Management• Legal Certainty

■ Mitigation of Counterparty Credit Risks• Margin Ratio• Margin Collateral• Set off

REPO DOCUMENTATION

Introduction

■ Architecture of the GMRA documentation• Versions• Annexes• Confirmation• Market Protocols and Guidelines

■ 2011 GMRA Protocol ■ ICMA ERC Guide July 2015 ■ Securities Borrowing and Lending Code of

Guidance ■ ESMA Guidelines on repo and reverse repo

agreements for UCIT Funds ■ Reasons for the GMRA

• Recharacterisation risks• Margining• Event of Default Procedures• Netting Rights• Basel III Capital Requirements• Operational Benefits• Harmonisation• Use in Structured Transactions• Legal Opinions

The GMRA

■ Key Obligations under the GMRA• Initial Exchange• Income Payments• Payment/delivery of Margin• Final Exchange

■ Key Provisions and Considerations:• Collateral Selection• Events of Default

■ Consequences of Failure to Deliver:• at start of a repo • at end of a repo

■ Standard Events of Default ■ Default Notices ■ Close-out: 3 stages ■ Valuation Procedures ■ Consequential Losses ■ Negative Repo Rates

• Definition• Circumstances when this occurs• Problems caused

■ Repo Rate Indices• STOXX GC Pooling Indices• The GCF Repo Index• Gov PX• The RepoFunds Rate• The Repo Overnight Index Average (RONIA)

■ Accounting Treatment of Repos • Balance sheet treatment not aligned with

legal form• Lehman Brothers’ Repo 105 and MF Global

under US GAAP• IFRS

■ Short-selling• What is it?• Essential functions• Risks of short-selling• Uncovered short-selling and market abuse• EU Short Selling Regulations

■ Shadow Banking ■ The Central Clearing Counterparties (CCPs)

• The functions of the CCPs• Benefits of using CCPs• The Principal CCPs in Europe• Repo trading systems






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■ Pro-cyclicality ■ CSD Regulation (CSDR)

• Application• Exemptions• Benefits

Levels of Activity in the European Repo Market

■ Trading – How repos are trades are negotiat-ed and executed • Direct trading• Automated Trades• ATSs• The ATSs operating in Europe

■ Clearing – Netting by repo parties• Uncleared trades• Bilaterally cleared trades• Multilaterally cleared trades

■ Collateral Management – Delivery and Main-tenance• Bilateral• Tri-party

Step by Step Process of How a Repo Trade is Done

■ Establish identity of counterparty – Legal Entity Identifier (LEI)

■ Establish whether parties dealing as principal or agent

■ Key economic terms and post-trade checks ■ How to quote repo rate ■ How to work out Purchase Price – dirty price

inclusive of haircut ■ Fixing Purchase and Repurchase Dates

• For non-forward repos• For forward repos

■ Allocating collateral and agreeing pricing ■ Negotiating rights of substitution ■ Interest rates and charges on late payments ■ Post-trade verification process ■ Confirmation ■ Affirmation ■ Recommended Delivery Size ■ Partial Delivery – Exercising Mini-Close Outs ■ Dealing with Negative Repo Rate issues ■ Interest on Cash Margin ■ Calculating Floating-Rate Repo Interest

• Method 1 – Ultimate Day Crystallisation• Method 2 – Penultimate Day Crystallisation

■ Calculating Open Repo Interest ■ Margining:

• Fixing Haircut• Calculating Margin Calls• Calculating Transaction Exposure• The Price used to Value Collateral

• Margin Thresholds• Deadlines for Margin Calls and Delivery• Applying Haircuts to Margin Securities• Interest Payments on Cash Margin

REGULATION OF THE REPO MARKET IN EUROPE

■ EU Financial Collateral Directive ■ Short Selling Regulations ■ EMIR ■ CSDR (Central Securities Depositories Regula-

tion) ■ MiFID II ■ TARGET-2 Securities (T2S)

SECURITIES LENDING OVERVIEW

■ What is Securities Lending? ■ Reasons for Securities Lending ■ The Parties Involved ■ Legal Structure

• Initial Exchange• Mark to market/top-up• Title Transfers• Voting Rights

■ Risks• Legal Risks

■ Capacity ■ Netting/Set-off Opinions ■ Recharacterisation ■ Governing Law and Insolvency Laws

• Regulatory Risks• Credit Risks• Market Risks

SECURITIES LENDING DOCUMENTATION

■ The ISLA ■ The Global Master Securities Lending Agree-

ment (GMSLA) – versions ■ Industry Guidances:

• SLRC – Securities Borrowing & Lending Code of Guidance

• ISLA EU Agency Lending Best Practice Paper• UK Agency Lending Code of Guidance• Checklists for Lenders

■ Architecture of the GMSLA documentation ■ Benefits of using a GMSLA ■ Key Provisions

• Initial Exchange• Manufactured Payments• Marking to market of Collateral• Events of default• Representations and warranties






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Course Content

REGULATION OF THE SECURITIES LENDING MARKET IN EUROPE

■ The Stock Exchange Rules ■ RAO under FSMA ■ The Disclosure and Transparency Rules ■ Financial Collateral Arrangements ■ Shadow Banking concerns

THE SECURITIES FINANCING TRANSACTIONS REGULATION (SFTR)

■ Scope of the SFTR ■ Exemptions from the SFTR ■ Definition of SFTs ■ Key Requirements of the SFTR

• The Reporting Obligation• Trade Repository Registration and Super-

vision• Investor Transparency• Periodical Information To Be Provided• Rehypothecation

■ Administrative Sanctions and Measures





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Course Overview


Retail Banking - IntroductionIn-House or Live Webinar

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Course Overview

Retail banking offers a huge range of services to a wide variety of clients and the skills needed to operate and run a retail banking operation remain many and varied.

Course ObjectivesThis introductory/intermediate level course provides delegates with an introduction to retail banking in all its elements.

On completion of the programme delegates will have a better understanding of: ■ What is a Bank? ■ Deposit Taking & Savings Products ■ Account Opening Procedures ■ Lending Products ■ Non Funds Based Retail Banking Services ■ The Basic Principles of Lending ■ Introduction to Credit Analysis ■ The Basics of Risk Management ■ Introduction to Debt Collection & Recovery ■ Sources of Funding – the basics ■ Distribution Channels – the basics ■ An Introduction to Technology ■ A Brief Look at The Banking Crisis ■ A Brief Look at The Future of Retail Banking

Learning ObjectivesThis programme is designed primarily to help recent employees and/or delegates moving into retail banking for the first time to improve their knowledge and understanding of how retail banks function.

Who should attend?This programme is designed for those with either limited or no experience in retail banking as well as those who feel in need of a refresher in order to further advance their knowledge and understanding.

MethodologyUsing a mixture of structured lectures, delegate discussions and practical case studies, delegates will improve their skills by direct learning, through group discussions and by sharing their own experiences as well as those of the expert trainer. The trainer will encourage active debate at all times to ensure that delegates are able to gain the maximum benefit from the course. The case studies will be tailored to match the mix of ability and experience of the delegates attending the course ensuring that the examples all have direct and actual relevance to the group’s individual working environments

Level of preparednessA working knowledge of retail banking would be helpful but is not essential. Delegates will be encouraged to share their own experiences and to identify those areas of particular interest to them. The course can then be fine-tuned as necessary to meet the group’s actual requirements, ensuring that all delegates achieve the maximum value from the event.


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Retail Banking - IntroductionContinued...

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Course Content

Session 1: ReviewObjective: Setting out the basics ■ What is a bank ■ The role of banks ■ Type of banks ■ Client base ■ Services ■ Personnel ■ Economies of scale ■ Management structure ■ Regulation & reporting ■ Shareholders expectations

Session 2: Deposit Taking & Savings Products Objective: To understand deposit and savings products ■ What is a deposit? ■ Why do banks need deposits? ■ Current, Short, Medium & Long Term Depos-

its ■ Pricing & advertising ■ Retail Deposits & Business Deposits ■ Savings Products ■ Money laundering constraints & know your

customer ■ Deposit protection

Exercise: What is the main difference between current, deposit and fixed term accounts? Which is the most attractive to the bank and why?

Session 3: Account Opening Procedures Objective: To understand what basic steps are required when opening accounts ■ Know your customer requirements & money

laundering ■ References & Introductions ■ Documentation ■ Current/checking accounts ■ Deposit/savings Accounts ■ Personal Accounts ■ Business accounts ■ Corporate accounts ■ Banks duty of secrecy

Exercise: You are asked to open a checking account for a new personal client. What references will you need? What paperwork is required? Do you have to meet the client in person? Why?

Session 4: Lending ProductsObjective: To understand the different types of lending products ■ Overdrafts & loans

■ Medium & Longer Term Finance ■ Asset finance (including Vehicles, Plant, Ma-

chinery etc) ■ Leasing ■ Mortgages ■ Personal Lending ■ Business Lending ■ Corporate Lending

Exercise: What is the most common form of lending at your bank? Why is this?

Session 5: Other “Non-Funds” Based Retail Banking ServicesObjective: To understand the different types of services available from a retail bank in addition to deposits and loans ■ Safe Custody ■ Forex ■ Travel Facilities ■ Dealing Services ■ Executor & Trustee services ■ Investment Management ■ Dealing/Broking Services ■ Insurance ■ Private Banking ■ Wealth Management ■ Trade Finance ■ Money Transmission Services

Exercise: All Retail Banks seek to boost earnings by selling additional services. What is being targeted by your branch/department? How successful have you been? What would you change, if anything?

Session 6: The Basic Principles of Lending Objective: To consider basic lending skills ■ People skills ■ “CCCPARTS” ■ Secured lending ■ Loan to value calculations ■ Unsecured lending ■ Loan authorisations ■ Funds release procedures ■ Control of lending ■ Regulatory considerations

Exercise: What is the most important consideration when granting or assessing a loan? What is the least?

Session 7: Introduction to Credit AnalysisObjective: A first look at bank credit analysis. ■ What to look for ■ Budgets & Forecasts ■ Track Record ■ Sector & Segment Considerations ■ Security





Retail Banking - IntroductionContinued...

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Course Content

■ The Credit Appraisal Process ■ Applying to the Credit Committee

Exercise: You have been approached by a good and valued client who is looking to take on a major commitment. You know they will need some bank debt. What do you want them to produce prior to a meeting to discuss this?

Session 8: The Basics of Risk Management Objective: To consider the usual risks facing a retail bank. ■ What is risk ■ Types of banking risk ■ Monitoring & control ■ Branch/Unit security ■ Reports, limits, excesses ■ Risk control

Exercise: What are the biggest risks facing your department? How are these monitored? How are they managed?

Session 9: Introduction to Debt Collection and Recovery ProceduresObjective: Understand why loans go wrong and what to do about it. ■ Why loans go wrong ■ The five usual reasons. ■ Other reasons ■ Cant pay or wont pay ■ Early warning signs and how to spot them ■ When to act

Exercise: To suit group requirements.

Session 10: Sources of Funding – The BasicsObjective: An understanding of funding sources available to a retail bank. ■ Current, Deposit and term accounts ■ Money markets ■ Savings & investment products ■ Inter bank markets ■ Commercial paper ■ Liquidity crisis issues

Exercise: Liquidity is the key to managing any retail bank successfully. What are the key risks in this area?

Session 11: Distribution Channels – The BasicsObjective: How to operate a retail banking operation and the role of technology ■ Distribution Channels ■ Branch network ■ Other organisations

■ Internet Exercise: To suit group requirements

Section: 12 – Technology – The Basics ■ Importance ■ Cost ■ Client requirements ■ Management requirements ■ Regulatory Requirements ■ Civil Service model

Exercise: Consider what minimum distribution channels are needed in your organisation.Exercise: Consider what minimum technology is needed in your organisation.

Session 13: A Brief Look at the Banking Crisis ■ What is it ■ What caused it ■ When will it subside ■ How will it affect your organisation ■ Consequences for retail bankers

Session 14: The Future of Retail BankingObjective: To consider the possible ways forward for the sector ■ Traditional Definitions ■ Generalists versus specialists ■ “Big Bang” theory and retail deposits ■ Delivery mechanisms ■ Costs versus service ■ Retail outlets options ■ Telephony ■ Internet banking ■ All inclusive banking ■ Microfinance

Exercise: If you could design your own retail bank, what would it be like? Could you make this model commercially viable?

Session 15: Summary & Group Forum





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Retail Credit Risk ManagementIn-House or via Live Webinar

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Course Overview

This is a two-day course to introduce and develop the ideas of retail credit risk and in particular credit scoring

Who should attend?

The many people in lending and other organisations who need to gain an understanding of what credit scoring is, what it can do, and how it works. They are likely to be in the credit risk function and could be working in scorecard development, scorecard monitoring and tracking, scorecard implementation, liaison with the lending operations, management information, validation and governance, scorecard strategy, management, etc.

Why should they attend?

Credit scoring is now the most common means of banks and other lenders making consumer lending decisions. This workshop explores the basics of how credit scoring works in a modern consumer lending business - the processes, the strategy, and the decisions. While there is a brief practical excursion into how the scorecards are built, the focus is on what the scorecards look like and how they need to be used and managed. The workshop is non-technical, aimed at the business user or strategist and requiring only some basic numeracy skills, such as being able to calculate percentages.

By the end of this workshop, participants will:

■ Be able to understand what credit scoring is and why it is used ■ Have been introduced to the typical scorecard development process and timings and what a

credit scorecard looks like ■ Have discussed a range of related data issues ■ Be aware of a range of issues to do with managing and using the scorecard, ensuring that it is

operating well and is being used compliantly ■ Understand some of the issues in setting the scorecard cut-off ■ Have an appreciation of what is required to achieve Basel compliance ■ Appreciate some of the challenges of risk based pricing and up-selling and down-selling

Delivery of the course is through formal lecture, classroom discussion, individual exercises, and group exercises and with lots of real examples.


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Course Content



Retail Credit Risk Management

Day 1

Risk

■ What is risk? ■ What risk do we run? ■ What are the risks in banking? ■ What are the risks in retail credit?

Background to Credit Scoring

■ How do we lend money? ■ What is credit scoring? ■ Why do we use credit scoring?

Scorecard development

■ What is the typical process? ■ What are the key steps? ■ What does a completed scorecard look like?

Data Quality and Data Quantity

■ Data accuracy ■ Missing data ■ Stability ■ Fraud detection and prevention ■ How much data do we need?

Scorecard Implementation

■ Pre-implementation checks ■ Cut-off strategy ■ Post-implementation reviews

Day 2

Monitoring, Tracking and Validation of scorecards

■ Application profile monitoring ■ Account performance tracking ■ Scorecard validation

Over-ride Management

■ Definitions of over-rides ■ Reasons for over-rides ■ Processing of over-rides ■ Analysis of over-rides

Risk Based Pricing

■ What is risk based pricing and how does it work?

■ What are the implications on the processes, the data, and the people?

Up-Selling and Down-Selling

■ Principles and objectives of up-selling and down-selling

■ Credit challenges

Credit Scoring across the Credit Cycle

■ Differences in scorecard development ■ Operational differences

Managing Scorecard Developments

■ Roles and responsibilities in a scorecard de-velopmentIdeas on how to manage the devel-opment

Introduction to Basel

■ Background to Basel ■ Definitions ■ Some consequences for data, validation ■ Stress testing ■ Low default portfolios

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Retail and Commercial Banking Delivery ChannelMasterclass

In-House or via Live Webinar ENQUIRE NOWCourse Overview

By the end of the course, delegates will be able to:

■ Explain the strategic elements comprising Retail and Commercial Banking ■ Define and understand in detail the integrated strategy requirements of:

• Premises location and design• Delivery Channels – the different ways that customers can interact with the bank• Product creation, marketing and selling• Customer segments and experiences• Staff recruitment, training and performance development

■ Understand the process for developing new Products from need-identification through to deliv-ery to clients

■ Explain the vital importance of all creating, developing and enhancing all relationships particu-larly:• The relationship between the bank and its customers• The relationship between the Bank’s management and staff in delivering excellent customer

service linked to achieving targets ■ Apply the universally-accepted Change Management principles ■ Appreciate the “International Dimension” of Retail and Commercial Banking which customers

demand in today’s highly flexible market-place

Attendees

The course is suitable for all Senior Managers who require an in-depth, strategic understanding of:

■ Retail and Commercial Banking ■ Delivery Channels ■ Relationship Management: Bank to Customer; Management to front-line staff ■ Change Management

Methodology:

The course is delivered using a stimulating combination of:

■ Slide presentations ■ Facilitated Discussions and ■ Exercises and Case Studies

Module 1 – What is Retail and Commercial Banking?

■ Preparing a definition covering:• Premises• Products• Customers• Staff

■ Discussing how Retail and Commercial Banking also includes aspects of retail activity: taking ideas from shops, supermar-kets etc.

■ Discussing how Retail and Commercial Banking Strategy Management applies across all delivery channels

Module 2 – Forward Planning to create a Strategy for Retail and Commercial Banking:

■ Understanding the logical process for creating a Strategy:• What we want to do; when we want to do

it; and how we want to do it ■ What information do we need to gather on

the “As Is” – the current position:• What is the bank’s existing Strategy (if

any)?• How do we know how successful this exist-

ing Strategy is?• How can we identify the gaps – where is

the shortfall in performance• What information should be gathered on

the “To Be” – the preferred position in the


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Retail and Commercial Banking Delivery Channel Masterclass

future:• What might the constraints be – the lim-

iting factors – to achieving success: ■ How is a Business Case prepared which

helps justify the emerging Strategy to the company’s Senior Management? This will focus on:• Budgets• Critical Success Factors (CSFs)• Measurement• Continuous Management and Assessment

Module 3: Delivery Channels

■ How do customers access our products and services?

■ How do customers want to access our prod-ucts and services?

■ Are we flexible in meeting customers’ ac-cess needs?

■ What does the future look like for delivery channels?

■ The challenge created by the emerging in-volvement of Telecoms companies and Mo-bile Money and the radical change this may make (in fact, is already making in certain parts of the world) to the execution of retail payments

Module 4 – Branch Premises

■ Location of the branch• Physical location• Size• Competition• Customer traffic• Other factors such as availability of public

transport and of car-parking

Module 4 – Branch Premises (continued)

■ Design of the branch:• What should be included – what can be

excluded?• What factors will entice customers in –

what will turn customers away?• How should we move customers around

inside the branch? What is customer traffic management?

• How can we display our goods in the out-let – our products – in the most advanta-geous way

Module 5: Other Delivery Channels

■ What other Delivery Channels do our cus-tomers expect us to offer to them

■ What are the strategic issues around provid-ing this access to all our customers?

■ What will happen if we choose not to make one (or more) of these channels available to our customers?

Module 6: Products

■ What are the factors in creating a product portfolio?• Understanding all the costs related to a

product: ӹProduction costs – including the effect on the bank’s balance sheet ӹMarketing costs – getting the product to the customers ӹSelling costs – persuading the customer to buy the product ӹMaintenance costs – after-sales service ӹEnhancement costs – making an existing product even better

• Understanding the profit element linked to each product. How to know: ӹWhich products make the most money – and should be retained ӹWhich products make the least money – or make a loss – and should be deleted from the portfolio

■ What are the factors in defining a target mar-ket for each of our products – and then link-ing that to the Premises decisions on location and design?

Module 6: Products (continued)

■ Marketing – How do we tell our customers what we sell? Creating a Marketing Plan in-cluding factorssuch as:• Our product portfolio – differentiating be-

tween target markets• Branding – making our bank identifiable in

a consistent way• Advertising – using all available (or re-

quired) advertising media such as: ӹTV, Radio and Cinema ӹNewspapers, Magazines and Flyers ӹBillboards, Posters and Direct Marketing

• Merchandising – linking all the advertising and product literature consistently

Module 7: Campaign Planning and Merchandising

■ Creating and Integrating Campaigns• Ensuring that each Campaign complements

activity – and doesn’t compete with it• Creating and publishing (internally) an in-

tegrated Campaign Plan

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• Developing a process whereby depart-ments use their Business Cases to “bid” for space and time to attract customers’ attention

• Building the Campaign for maximum ef-fect using the media outlined previously

■ Merchandising:• Again building on the learning to ensure:

ӹConsistency – of message ӹConformity – to company standards for literature and language ӹUniformity – helping customers to navi-gate our literature ӹLegality – ensuring no contraventions of any “customer protection” legislation

Module 8: Relationship Management: Bank to Customers

■ Who are our customers – and what do they expect from us?

■ Different types of customers – and their separate requirements:• Mass Retail – want fast, efficient and er-

ror-free access to products and services• Mass Affluent – in addition to fast effi-

cient and error-free access to products and services want a more-personal ser-vice: a feeling that they are “special”

• Small / Medium-sized Enterprises (SMEs) – a more-personal service feeling that their non-personal business is important to the bank

• Module 8: Relationship Management: Bank to Customers (continued)

■ How do we differentiate between the differ-ent types of customers? Actually… Should we differentiate between different types of customer or should we treat them all the same…?

■ Defining the experiences we want our cus-tomers to enjoy when they contact us

■ How do we deliver these different experi-ences?

■ What differences in staff and staff training are required?•

Module 9 – Customer Relationship Management:

■ The importance of Customer Relationships ■ The benefits of developing a Customer Rela-

tionship Management Strategy ■ A Customer Relationship Management

framework

■ Integrating People, Processes and Technology ■ The Service : Profit Chain ■ Obtaining and Handling Customer Information

• Module 10 – Customer Demands:

■ Stakeholder (Customer) Management ■ Stakeholder Engagement ■ Satisfying Stakeholders’ Demands

Module 11 – People Management

■ Creating and delivering an excellent Customer Experience

■ Understanding Ourselves and Others ■ Effective Communication ■ Motivation at Work

• How do I get the very best from each cus-tomer interaction?

• What do I need to do differently to ensure that my customers only want to deal with me?

■ Team Building• The stages of Team Building• The inevitable effects on performance lev-

els through these stages•

Module 11 – People Management (continued)

■ Coaching• Ensure clarity on what exactly Coaching is

and how it is used• Link “Coaching” as a discipline to improving

individual and team performance (or ana-lysing and rectifying under-performance)

• Understand how learning shared can eas-ily be transferred into a “commitment to action”

■ Coaching • Introduction to the GROW model• Consideration of all the factors required in

effective Coaching• Introducing the House of Change: under-

standing the need sometimes to make things worse before they can get better

■ Building Rapport ■ Handling Conflict

• What causes conflict?• The Phases of Conflict Handling• Thomas-Kilmann’s Five Conflict-Handling

Modes – and how to apply them• Bridging the Gap

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Module 12: Selling Skills

■ Understanding the product(s) ■ Spotting a customer’s buying signals ■ Upselling Skills: what else do my customers

need…? ■ Negotiating ■ When is not selling anything at all the best

thing to do?•

Module 13 – Staff Performance Management:

■ Creating Goals and Objectives ■ Managing Under-Performance ■ Performance Discrepancies ■ Managing Performance Standards ■ Feedback as a tool of Performance Manage-

ment

Module 14: Relationship Management: Managers to Staff

■ What is a “Way of Working”? What does it include?

■ How do we measure Staff Performance?• Goal and Objective Setting• Managing against those Goals and Objec-

tives• Staff Development and Performance

Management• Motivation: how do we get the best from

our staff?• Delegation: how can we give our staff

the chance to develop their own initiative to deal with customers

Module 15: Change Management

■ Understanding “Change” as a concept ■ The 9 Change Principles – and putting them

into practice ■ Embedding the change ■ The emotional responses to change: how

do staff receive, understand and implement the required change

Module 16: The International Dimension

■ Who are our International Customers? ■ Do we (should we?) treat them differently

from our domestic customers? ■ Extra issues of Know Your Customer (KYC),

Identification & Verification (ID&V) and the international aspects of Financial Crime

legislation ■ International aspects of:

• Customer Service• Overseas Premises• Product Development• Money Transmission• Foreign Exchange• …and Import / Export for SMEs

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Risk ManagementIn-House or via Live Webinar

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Course Overview

At the end of the course delegates should be comfortable with the need for, and the techniques of, risk identification and quantification.

They will understand the various roles of management, front office, middle office & support within an organisation’s treasury.

They should also be conversant with the concepts of control that are used to contain treasury risk within the parameters defined by the organisation.

Risk Management Defined

■ The roles of the treasurer, management, support and middle office

■ The historic development of risk manage-ment

■ The development of new technology.

Aspects of Risk

■ Credit / counterparty ■ Normal market risk ■ Abnormal market conditions ■ Hidden exposures ■ Product liquidity ■ House liquidity risk

Concepts of Control

■ Defining and measuring the risk - through-out the organisation.

■ Traditional methods of control ■ Integrated control concepts. ■ Banking book vs trading book ■ Central Bank guidelines ■ Case studies comparing traditional methods

and newer techniques ■ Accounting and regulatory issues. ■ CAD / BIS issues

Defining the Strategy

■ Risk tolerance ■ Hedging needs ■ The principle of efficient frontiers

Setting Limits

■ Counterparty related ■ Market related ■ Simplicity vs accuracy

Interest Rate Exposure Analysis

■ Gap analysis ■ Duration and convexity: their uses as a

measure of risk exposure. ■ The validity of yield curve analysis ■ The zero-coupon curve. ■ “Omega” risk analysis ■ Basis risk ■ Overview of VAR techniques

Foreign Exchange Exposure Analysis

■ Transaction risk ■ Pre-transaction (budget) risk ■ Translation risk ■ Economic risk, including competitor risk


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Risks and Products of the Treasury FunctionIn-House or via Live Webinar

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Course Overview

Participants will gain an overview of the capital and treasury markets globally and within the City of London especially.

They will also obtain an understanding of the market players and their imperatives, a familiarity with the major product types and their uses and a level of comfort with financial terminology and jargon.

The seminar will also cover credit derivatives in a reasonable degree of depth, and participants will gain an appreciation of the risks transferred by these products (and the residual risks that are not).

In addition, delegates will appreciate the uses of credit derivatives for corporate financing structures and the circumstances in which they might be utilised for hedging risk, both from a client standpoint and from that of the corporate banker.

From the risk management area they will also become comfortable with the need for, and the techniques of, risk identification and quantification, including understanding, the various roles of management, front office, middle office & support within an organisation’s treasury.

They should also be conversant with the concepts of control that are used to contain treasury risk within the parameters defined by the organisation.

■

Treasury Products

■ Overview of the Financial Markets ■ Short Term Money Market ■ Bond Markets ■ Bond Variations in Overview ■ Treasury Products - Foreign Exchange ■ Derivative Instruments

Credit Derivatives

■ The concept of credit derivatives ■ Credit derivative structures

• Default swap• Credit linked note• Total return swap• Spread future• Spread option• Cross guarantee (default swap combo).• Other structures

■ Practical issues

Risk Management

■ Risk management defined ■ Aspects of risk ■ Concepts of control ■ Defining the strategy ■ Setting limits ■ Interest rate exposure analysis ■ Foreign exchange exposure analysis


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Risk in Trade Finance and Trade Finance Products


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Course Overview

Trade Finance remains the engine at the heart of global economic growth with China still probably the most important participant. Commodity Finance sits at the heart of this trade dominated by oil and gas which according to some estimates, accounts for as much as 70% of all commodity trade. Global trade is reckoned to be worth $40 trillion and growing.

Trade finance is an interesting risk paradox. It has always been a business area where credit losses are typically very low (mainly fraud in practice), fee income opportunities are high and some of the products are very efficient users of capital. On the other hand it is a very high risk area for Financial Crime. It is estimated that as much as $2trillion is laundered annually, much of it using trade finance. Regulators and law enforcement agencies believe that if it is made as difficult as possible to launder money through banks, this could help stifle crime. Banks are expected to do their bit and this is having a significant (but manageable) impact in most banks. With trade typically transiting several countries, with different regulations and different regulatory standards, it is very difficult to manage the risks with precision. This remains a product offering that is watched very closely by regulators and policed ruthlessly (when it comes to sanctions) by OFAC.

This practical two day trade finance course is designed for relationship managers and those working in sales or supporting the sales team together with colleagues from credit department, responsible for approving trade finance propositions. It concentrates on risk identification and mitigation as well as how to explain the wide range of the Bank’s Trade finance services. It focuses particularly on risk assessment, delivery, need identification, and selling opportunities. The course encourages delegates to see issues from both the client’s and the bank’s relationship manager’s viewpoint.

The aim is to provide high quality trade finance services to the bank's clients in a seamless and helpful manner and to assist delegates understanding of the trade flows and the precise nature of the banking risks undertaken.

The course will also demonstrate the self-liquidating short term nature of most trade transactions. A clearer understanding of the actual banking risks should mean profitable business and earnings opportunities will arise as a natural consequence. The course encourages trade finance specialists to become user friendly general practitioners, rather than specialist custodians of knowledge, which can sometimes be the case from the client’s viewpoint. All clients want value for money services. This course aims to encourage delegates to deliver it.

Methodology:The course will be run as a workshop style classroom session, with detailed examples. Delegates are free to bring their own cases/examples to the sessions.

Level of Preparedness:Beginners are welcome although a very basic working knowledge and understanding of the methods of financing International Trade would be helpful.


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Risk in Trade Finance and Trade Finance ProductsContinued

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Course Content

Trade Finance Overview ■ Historical evolution and current developments

in the market place ■ Principles of trade Finance ■ Parties to a transaction ■ Roles, obligations, interests ■ Typical users of Trade Finance products and

services ■ Payment mechanisms ■ Trends – Migration to open account ■ Risk Ladder and review of traditional trade

products

Risk – The Critical Issues ■ Understanding, identifying and managing risk ■ Risk ladder and trade products ■ Sovereign, Political / Country risk ■ Institutional risk / Bank risk ■ Corporate and other critical risks ■ Importer and Exporter’s risk – delivery, quali-

ty, payment etc ■ Risk mitigation, management and transfer ■ Risk migration versus commercial necessity ■ Managing risk within open account trade

Case Study – the impact of risk on trade – the often differing bank & client’s perspectives

Review of Key Products ■ The challenge to banks of disintermediation ■ How does your customer analyse his risk? ■ Which products does he use and why? ■ Cash in Advance - summary ■ Open Account – summary - the biggest risk

challenge for seller and the bank ■ Collections – summary - Outward & Inward /

Clean & Documentary ■ Letters of Credit - summary - (covered in

detail below), import and export ■ Risks and opportunities – bank versus client

perceptions ■ Marketing possibilities and opportunities

Case Study – how does your client choose to trade – what would you prefer?

Regulatory and Trade Conventions and Their Role in Risk Migration: ■ Incoterms - the list ■ Incoterms the impact ■ UCP 600 ■ URC ■ URDG

Risks inherent in Payment in Advance: ■ Definition and explanation ■ Risks ■ Mitigation techniques

■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Avoiding unhelpful retrospective advice

Case Study – How can the bank assist when there is no obvious role?

Risks inherent in Open Account Trading: ■ Definition and explanation ■ Risks ■ Mitigation techniques ■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Granting buyer/supplier credit

Why is it any different to domestic trade Case Study - how do we fund this client preferred method of trade?

Risks Inherent in Collections - Clean & Documentary: ■ Definition and explanation ■ Risks ■ Mitigation techniques ■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Granting buyer/supplier credit

What is the real point of a clean collectionCase Study – Imports are easier to fund using collections than exports – discuss?

Risks Inherent in Letters of Credit: ■ Definition and explanation ■ Risks ■ Mitigation techniques ■ Migration techniques ■ Risk/reward consideration ■ Commercial tug of war ■ Do we need 100% security cover? When and if

will this be relaxed

Letters of Credit (L/Cs) - Additional Mechanisms: ■ Transferable L/Cs ■ Revolving L/Cs ■ Evergreen L/Cs ■ Standby L/Cs ■ Back to back structures (brief intro) ■ L/C & Bill Discounting ■ Avalised bills

Case Study – This is by far the easiest and safest trade instrument for clientsand the banks. With the exception of Standby L/C’s why do conventional L/C’s account for less than 15% of all trade?





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Risk in Trade Finance and Trade Finance ProductsContinued

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Course Content

Financing & Managing Import Trade Risks in Challenging Markets ■ The value chain – bank perspective versus

client perspective ■ Structured vs. traditional trade finance ■ Risk analysis of a trade import deal looking

at • Credit risks• Product risks• Transactional risks• Price risks• Performance risks

Case study example – consider a hypothetical case STF – Risk Management in Financing Export STF ■ Prepayment ■ Pre-export ■ Pre shipment ■ Post shipment ■ When do sales actually become debtors ■ The reality of title and control

Case Study – L/C backed STF is easy to fund. How do we handle Open Account?

• Risk Assessment For Credit Analysis and Application Purposes: ■ Analysing the trade flows ■ Break even analysis ■ Assessing facility size and structure ■ Identifying and mitigating the risks ■ Gearing, repayment, profitability and li-

quidity. ■ Specific lending with identifiable maturity

dates ■ Appreciating and controlling sources of

repayment ■ Security – Is the last resort in practice de-

spite CCCPARTSCase Study - How can we re-learn short term TF skills and trade cycles and move away from the omnibus overdraft?

Effective Use of Collections for Short-Term Finance ■ Using collections as financing opportunities ■ Identifying and mitigating risks ■ Maintaining control

Case Study – example

Introduction to International Demand and Contract Guarantees / Bonds ■ URDG758 ■ Scope and Application – an introduction ■ Different types - Bid, Performance, Ad-

vance payment , Warranty and Retention bonds

■ Risk Migration – the challenge of unexpired bonds/guarantees

■ Opportunity spotting ■ Standby L/C’s (SBLCs) as Risk mitigators

Case Study – a construction client’s needs

Receivables Financing and Risk Migration ■ Mechanics of Securitisation ■ Factoring and Reverse Factoring ■ Mechanics of Factoring and Invoice Discount-

ing ■ Role of Credit Insurance

Case study – example

Introduction To Innovations In Risk Management and Migration ■ Silent confirmations ■ Silent Payment Guarantees ■ CTN options ■ Purchase and sales ledger options ■ Bank Assisted Open Account ■ Securitising funds flows, future flows, receiva-

bles and inventoriesCase study – How to use these techniques to establish a base relationship with a target client

Advisory Services ■ Core offerings ■ Trade intelligence ■ Payments & collections ■ Trouble shooting ■ Progress chasing ■ Translation and exposure risks ■ Counter party risks ■ Export & import specialist advice ■ Credit insurance ■ Other services

Introduction to ECA’s – Risk Transfer From the Bank to insurance Sector ■ Credit Insurance ■ Political Risk Insurances ■ ECA structures ■ Intermediation by ECA’s ■ UK Government Schemes

Commercial & Risk Q&ACourse Conclusion and Review / Feedback





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Senior Managers & Certification Regime and its Impact on Training & Competence Obligations


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Course Overview

The new Senior Managers Regime (SMR) became live in March 2016 and is the regulatory response to the Credit Crunch. It is designed to encourage individuals to take greater responsibility for their actions and make it easier for both firms and regulators to hold individuals to account.

A key element of the SMR is the new Conduct Rules which replace the Statements of Principle for Approved Persons in Banks, Building Societies, PRA designated Investment Firms and Credit Unions. The Conduct Rules define the expected standards of behaviour for individuals and seek to drive positive behaviours. The rules are also intended to act as a deterrent by providing a framework by which regulators can take enforcement action against individuals who breach the rules. These Conduct Rules cover most individuals carrying out regulated activities within the banking industry. As a result firms are required to ensure their staff subject to Conduct Rules are notified of the rules that apply to them and to ensure that those persons understand how the rules apply to them.

The Regime has set clearer expectations of the behaviour of both senior and more junior employees and replaces the Approved Persons regime a licensing regime operated by regulated firms themselves. The ultimate goal is to enable regulators to apportion blame to individual senior managers if things go wrong and to take disciplinary action against them. This concept of Individual Accountability will have important implications for all governance structures.

Statement of Responsibilities is a key change. This document will define the scope of the senior person’s responsibilities and potential liability. A great deal of care will be needed in drawing these up and maintaining them over time.

A similar regime, the Senior Insurance Managers Regime (SIMR), has also come into force for the insurance sector.

Whilst the Approved Persons regime continues to apply to the wider financial services industry outside of banking and insurance, the intention is for a version of the new regimes to be extended to all financial services firms in 2018/19.

This course will cover all the obligations relating to the Senior Persons Regime and those for competence, including ideas on how to devise an effective T&C regime, and how to assess competence and ensure it is maintained.

The Current Regulatory RegimeTreasury, BoE & FSA become FPC, PRU and FCA from 1.1.13.

■ Reasons for the change ■ Dual regulation ■ Intrusive regulation ■ Conduct risk

The Existing Approved Persons Regime – in place till 2018/19

■ The Fit and Proper Test ■ Definition of Approved Person ■ Statements of Principle for Approved Persons ■ Significant Influence Functions ■ FCA procedure

The Senior Managers Regime

■ Introduction ■ Who is a Senior Manager ■ Criminal Record Checks ■ Regulatory references ■ SMR Misconduct Certifications ■ Whistleblowing ■ Statement of responsibilities ■ Responsibility Map ■ Certification of staff by SMR’s. ■ New duty of Responsibility ■ New criminal offence – Reckless Miscon-

duct ■ Appropriate SMR handover ■ Other relevant impacts ■ Summary

Competent Employees Rule Competent Employees and the Principles for Busi-ness

■ Principle 6 – ‘A firm must pay due regard


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Senior Managers & Certification Regime and its Impact on Training & Competence Obligations


Course Content

to the interests of its customers and treat them fairly’

■ Principle 2 – 'A firm must conduct its busi-ness with due skill, care and diligence'.

■ SYSC 5 requirements ■ Record keeping ■ Recruitment and HR procedures ■ Assessing and maintaining competence ■ Remuneration

Open Forum

END

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The Debt Finance Training CourseIn-House or via Live Webinar

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Course Overview

This programme has been designed to provide a thorough review of debt financing principles, markets and products. We will use real life case study examples to illustrate the financing techniques and products throughout the programme.



■ To provide a complete review of debt financing theory and debt products ■ To identify funding requirements both short and long term ■ To explain asset based financing ■ To explain the real world use of debt financing techniques using current examples ■ To explain yield curves, debt pricing in the primary and secondary markets ■ To explain measures for risk management in debt instruments including interest rate and credit

spread sensitivity (duration and convexity) ■ To demonstrate how interest rate and foreign exchange risk can be managed using derivatives ■ To explain the world of securitisation post 2009

Day One:

The objective of Day-1 is to ensure that participants understand why and how companies borrow money, the effect that borrowing money has on the financial statement of the company and the role that the bank plays in the process. It also covers sources of finance, products used and investors together with their objectives and expectations.

This module introduces participants to customer funding needs, why they arise and their nature.

■ Principles of debt finance • Linking finance and corporate strategy• Cost of capital and risk• Theory of optimal capital structure

■ Start-up capital• How to calculate the amount• Where to get it

■ Working capital• Banks• Peer to peer lenders

■ Debt versus equity• Advantages and disadvantages• Relative costs

■ Cash flow forecasting ■ Long and short term financing

Case study: Writing the first year’s business plan and cash flow statement.

Module 2 explores the instruments that are available to raise finance and will provide recent examples of products. The following products will be explained:

■ Fixed and Floating Rate Bonds• How to choose between fixed and floating

rate• The bond and swap concept• Raising finance in a third currency and

swapping into a desired currency ■ Convertible Bonds

• Types of convertible ■ Conventional ■ Mandatory

• Advantages for issuers and investors• Pricing a convertible bond• How convertible bonds exist after issue• Asset swaps• The call component


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The Debt Finance Training CourseContinued...

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■ Commercial Paper• Commercial paper programmes• The dealer panel• Pricing, investing and liquidity

■ Project Finance• an overview of project financing. • a typical project finance structure • the parties and their objectives • the key issues for lenders

■ Bank Loans• The typical bank loan• Security and covenants• Maturity and spreads

■ Syndicated Loans• What are syndicated loans?• How are they structured and sold?• Who invests in syndicated loans?• The advantages of syndication versus

self-negotiated loans ■ Private Placements

• What are private placements?• Who invests in private placements and

why?• How are private placements structured

and sold? ■ The Repo Market

• The government bond repo market• The corporate bond repo market• Classic repo• Central clearing, collateral, haircuts and

mark to market• Why use repo and reverse repo?

Case study: Issuing a corporate bond

■ In this exercise delegates will undertake the roles of the participants in a corporate bond syndication and will:• Liaise with investors to obtain orders• Place orders into the selling syndicate• Create and manage the “book of inter-

est”• Calculate the allocation and pricing for

book building• Allocate the bonds and calculate the

cost of funds for the issuer

Day Two:

The objective of Day-2 is to ensure that participants understand yield curves and how to interpret them. Once participants are familiar with yield curves they will learn how to manage currency and interest rate risk. Finally, participants will learn about securitised products.

■ Yield curve construction• The government bench mark curve• The forward curve and the likely path of

rates in future ■ The likely cost of money for the borrower for

new bond issues ■ How credit spreads are set

• Loss given default• Expected default probability• Implied default probability

■ How to decide whether to issue a fixed coupon bond or an FRN• Your view of expected future interest rates

compared to the forward curve ■ Pricing a bond in the secondary market

• Which interest rate to use• Which credit spread to use• Building a discount factor• Cash flow mapping and discounting future

cash flows

Case study: Understanding yield curves, forward rates and credit spreads and pricing a corporate bond

■ Government bond risk management ■ Macaulay and Modified duration

• Definition and understanding• Applications• DV01 the key to trading, hedging and risk

management ■ Maturity ladders and portfolio management ■ How banks and portfolio managers run their

portfolios ■ Convexity

• Calculating• Applications

■ The complete view of risk• Maturity ladders• Duration and convexity• DV01

Exercise – Budgeting interest rate risk in a company

■ Basic hedging tools for currency and interest rate risk management• Interest rate swaps• 90 day LIBOR Futures• Swaptions• FX Outright Forwards• FX Options• Currency Swaps

■ Types of exposure• Interest rate risk • Currency risk

■ Transaction ■ Translation ■ Economic ■ Examples of how to hedge each type of risk




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The Debt Finance Training CourseContinued...

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using derivatives

Case study: hedging interest rate and FX transaction exposure using derivatives

Asset Securitisation

■ Structure of a typical securitisation deal• The Asset pool• The Special purpose vehicle• The Capital Structure

■ Types of securitisation• Residential mortgage backed securities• Auto loans• Credit card receivables• Collateralised loan obligations• Covered bonds

■ Structure properties• Weighted average ratings factors

(WARF)• Historical default probabilities and re-

ceivable arears• Credit enhancements and subordination

pre and post crisis• Portfolio returns

■ Funded and synthetic structures• Advantages and disadvantages

Case study: Building a collateralised loan obligation.

Participants will be provided with a pool of available assets and will be asked to build a CLO, calculate the WARF, build the capital structure, price the notes and calculate the expected return on first loss piece




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Distressed Disposals: Key Negotiating AspectsIn-house or via Live Webinar

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Companies facing financial difficulties face three options: flog, fix or fail (close). Often a restructuring will involve a mixture of both debt restructuring accompanied by a sale of part or, occasionally, all of the business. M&A is a challenging process in normal conditions; however, selling a business in a distressed scenario is fraught with difficulty and presents a raft of challenges over and above a sale in the ordinary course. In an ideal world the sellers will seek to execute a sale outside and before any formal insolvency process (Administration) however, in some cases this may not be possible. The programme focuses on the challenges of selling a business both before the imposition of a formal insolvency process and also after Administration via a pre-packages sale. Interestingly pre-packs have been used in jurisdictions other than the UK; namely Holland, Luxembourg and Germany.

This programme aims to identify the typical issues which parties are likely to encounter in the process and provides a route map on how these might be resolved. The programme adopts a generic approach which is relevant to stakeholders who may have an interest in these types of transactions including; lawyers, financial advisers, senior and junior lenders, accountants and owners.

The problems typically include the nature of the sale process, the structure of the deal and the manner in which the consideration is to be paid (deferred methods are unattractive at best). For the buyer problems arise through the absence of warranties coupled with the limited due diligence which is conducted owing to timing pressures.

In addition, the sale is also open to a number of additional impediments not present in more normal circumstances; attempts by (competing/trade) buyers to wind down the clock, difficulties with valuing the target if that is itself distressed, the ever-present risk of Directors’ fiduciary duties which become more relevant in distress.

Initial considerations in accelerated/distressed disposals

■ Background issues ■ Target’s situation

• Distressed seller• Distressed target

■ Exploring the Seller’s options – to mitigate risk• Dual / triple track approach: sale, equity

injection, debt restructuring ■ Summary of key differences to “non-dis-

tressed” M&A• Deal structure• Tax• Key contracts – mitigating termination risk• Pensions/ Employees• Claw-back risk

Valuation issues and risk for Directors

■ Importance of the valuation• Special considerations in distress • Establishing the value of the Target (the

fulcrum capital vis-à-vis other stakeholders)• Due diligence issues

■ Issues for the (Sellers’) Directors• Fiduciary duties• Summary of position in key European juris-

dictions (Sweden, Norway, France, Germa-ny, Lux, Spain)

■ Key risks• Vulnerable transactions• Transactions at an Undervalue• Preferences• Review of position in key European jurisdic-

tions ■ Steps to mitigate risk & subsequent challenges

by Liquidators post Formal Insolvency


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Other impediments / considerations in re Stake-holder issues

■ Issues arising from the Senior Secured lenders - issues affecting the sale• Structure of the loan• Syndicated/Club deal - issues• Bilateral loan - issues

■ Impact of the Junior Secured lenders• Critical issues In the Inter-creditor • Where to focus -release of collateral con-

trol over the agent ■ Junior-Unsecured Lenders – limited lever-

age available ■ Getting Bond-holders’ approval – key issues

• Who are they• Co-ordinating action• Exit consents – dealing with hold-outs• Market Abuse Directive issues

■ Shareholders• Issues with split shareholdings• Dealing with Management

■ Other key stake-holders – tactics for man-aging• Landlords• Aggressive creditors

■ Special considerations for Listed Companies• Disclosure• Approvals• Market Abuse Directive issues

■ Employee Rights / Issues • EU Acquired Rights Directive & TUPE• Pension matters

■ Regulatory / Competition Authority issues

Structuring the Deal

■ The Purchaser’s perspective & approach • Structure of the deal

■ Seller issues & preferences• Structure of the deal – issues favouring a

share purchase• Issues favouring an asset purchase

■ Sale process - methods• Traditional auction• Mini-auction• Accelerated/ fast-track auction• Sealed bids / tender• Stalking horse method

■ Special considerations for distressed sales• Managing the bidders• Dealing with competitors – key role of

confidentiality• Tactics for avoiding value destruction

■ Structuring the deal methods• Shares vs Assets• Hive-downs• Schemes of Arrangement (apply to non-

UK companies with UK connection)• Acquiring control via a loan-to-own

■ Methods of structuring the Consideration – pros & cons• Cash • Deferred consideration• Other methods of closing the value gap

Special considerations for Insolvent / distressed sales

■ Insolvency practitioners’ locus standi ■ Warranties & Indemnities – the value gap ■ Warranty Insurance, Escrow Accounts ■ Transitional Service Agreements

• Key features• How they can help – pros & cons• Seller issues• Buyer issues

■ Asset sales• Identification of assets• Delivery of assets

■ Third Party Agreements• Customers & supplier issues• Leased Plant & Equipment• Leased premises• Licences• Inventory – retention of title• Book debts• Real property

Pre-packaged sales in UK & some European Jurisdictions

■ Sale under formal Insolvency process –con-trasted with non-insolvency sales

■ Pre-packaged sales generally• What are they• How are they achieved• Where can they be used• Pre-packages sales in UK • Pre-packaged sales in Europe (Lux, Hol-

land, Germany) ■ Five advantages of using pre-packs ■ Disadvantages of pre-packs ■ Types of pre-packs / mechanics of the pro-

cess• Operational• Financial


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The Latest Basel III Regulatory RequirementsIn-House or via Live Webinar

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Course Overview

Basel III is a global regulatory framework on bank capital adequacy, stress testing, and market liquidity risk. It was developed in response to the deficiencies in financial regulation revealed by the financial crisis of 2007–08. Basel III, which is currently implemented until 2019, is intended to strengthen bank capital requirements across the world and avoid another systemic banking crisis.

This session provides participants with a detailed tour and review of the Basel accords issued by the BIS and the ever-evolving regulation stemming from Basel II and Basel III proposals and the Capital Requirements Directive IV (CRD IV) in Europe. Through a mix of lecture and case studies, the workshop will equip participants to achieve a detailed understanding of Basel guidelines, specifically on the following technical topics:

■ Components of Tier I and Tier II instruments; ■ Computation of Risk Weighted Assets (credit risk, market risk and operational risk); ■ The ever-evolving minimum capital ratios; ■ The impact of TLAC and MREL; ■ Leverage, LCR and NSFR ratios.


Session 1 - Introduction

■ Overview of the regulatory banking frame-work

■ Global rules for local implementation ■ From Basel I to Basel III ■ Capital Requirements Directive IV (CRD

IV) ■ The 3 Pillar approach ■ Stress testing of European banks ■ Vickers’ report in the UK

Session 2 – Available Capital

■ From accounting equity to common equity Tier 1

■ Overview of key accounting adjustments• Goodwill and intangibles• Non-controlling interests• Significant stakes in other financial in-

stitutions• Deferred taxes

■ Hybrid securities: preference shares, sub-ordinated debt, mandatory and contingent convertibles

■ Criteria for Tier 1 classification: impact of Basel III on the design of qualifying hy-brids

■ Tier II instruments ■

Case Study: participants will reconcile an IFRS book equity of a European bank to compute Tier I and Tier II capital

Session 3 – Required Capital and Risk Weighted Assets

■ Overview of credit, market, counterparty and operational risks

■ Definition of Risk Weighted Assets (RWAs) ■ Credit risk weighted assets

• Basel I / II approaches • Basel III - standardised to foundation

and advanced approach• Understanding PD, EAD, and LGD

■ Counterparty risk weighted assets• Expected Positive Exposure (EPE)• Credit valuation adjustment (CVA)

■ Market risk weighted assets• Normal distribution and Value at Risk

(VaR)• Basel 2.5 and stressed VaR

■ Operational risk weighted assets• Standardised to advanced approach

Case Study: participants will calculate the unexpected losses of a simple portfolio of a European bank

Case Study: participants will assess the VaR of a single and two-assets portfolio


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The Latest Basel III Regulatory RequirementsContinued...

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Case Study: participants will reconcile the operational RWAs to its historical net banking income

Session 4 – Minimum Capital Ratios

■ Minimum capital ratios: from Basel II to Basel III

■ Tier 1 and total capital ratios ■ Minimum and buffers above minimum:

conservation and countercyclical buff-ers and buffer for systemically important banks

■ Impact of Basel III: phasing in of Basel III requirements

■ Total Loss Absorbency Capital (TLAC) ■ Minimum Requirement for own funds and

Eligible Liabilities (MREL)

Session 5 – Leverage and Liquidity Ratios

■ Back-stop leverage ratio ■ Liquidity coverage ratios (LCR) ■ Net stable funding ratios (NSFR)

Case Study: participants will calculate and comment on those 3 ratios for a European bank


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The Project Finance CourseIn-House or via Live Webinar

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Course Overview

Project Finance is an essential element of any bank’s product range and is an attractive proposition, done well. It usually involves large and creditworthy clients, seeking significant sums to construct something that will take between 3-7 years (typically) to build and which will generate sufficient cash-flows on completion to service and/or repay the loan, pending refinancing or sale.

This course considers a range of project deals from £35m upwards to several £billions to ensure it will appeal to delegates from all types of bank backgrounds, not just Global Banks.

The text-book definition of Project Finance reads:

“The raising of finance on a limited recourse basis, for the purposes of developing a large capital- intensive infrastructure project, where the borrower is a special purpose vehicle and repayment of the financing by the borrower will be dependent on the internally generated cash-flows of the project”

What does this mean in practice and just how limited is “limited recourse”? As well as dealing with these questions, this course examines the role and availability of project finance in the current market place.

Using numerous case studies, the course will consider projections, cash-flows and balance sheet analysis to an appropriate level. It will include the main principles such as a thorough review of the roles of the different parties in the transaction, an examination of the four different phases of the project, the risks in all their various guises, the methodology behind the construction of the cash-flows and the techniques deployed in their evaluation.

We also examine the structure of the transaction, the legal and documentation aspects, and the essential due diligence procedures and most importantly the source of repayment. This will include a review of the various PPP schemes in use

The course also has specific case studies devoted to the more specialist areas of Oil & Gas finance, Mining, LNG and Renewable Energy.

About the Course DirectorYour course director has spent more than 40 years in the banking industry, much of it in Global Banking and Trade at all levels of client, not just as an academic or consultant but as a bank manager initially rising to main board director level. He is a former Institute of Banking Lecturer. He has lectured extensively to all the leading global banks including the world’s largest institutions. He has delivered extensive programmes to banks in all parts of the world including the USA, Europe, MENA, Africa and Hong Kong. He is currently an accredited external Master Trainer for the world’s biggest trade finance bank.

Project Finance Overview ■ Contrast with other forms of limited re-

course financing ■ The rationale for using project finance

and trends ■ Recourse ■ Due diligence required ■ Syndication overview

Project Finance - the Parties ■ Who is involved ■ Syndication or sole sources ■ Third party interests ■ Government interests ■ PPI schemes

Case study: A course length project based on a real life case and chosen for its appeal to delegates. At this, the “application stage” we consider the parties and their impact on the project

Project Finance - The Details ■ Definitions & basic principles ■ Suitable Lending vehicles – why use an

SPV? ■ Suitable projects ■ Syndication ■ Participation ■ Risk/reward ■ Extra Curricular benefits ■ Strategic/policy implications

Case study: Melchester United – a fictional applicant for finance to buy a football club based on a real case.

The Objectives of Project Appraisal/Feasibility ■ Key issues - budget, timing and sustain-

ability issues ■ Suitability ■ The importance of independent scrutiny ■ What are they expected to achieve ■ What impact do they make on the project ■ How much detail


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■ Skills needed to complete appraisals ■ The “gateway” process

Case study: Back to the course long case study looking now at the appraisal and feasibility aspects.

Project Costs ■ Quality and accuracy of estimates ■ What is a cost plan; preparation and

limitations ■ Provisional sums, allowances & contin-

gencies ■ Dealing with exclusions ■ The goal of cost certainty ■ Value engineering ■ Factors affecting likely outturn costs ■ When to walk away

Case study: Building a hotel above an airport car park. What are the risks? Based on a real life case with a surprising outcome

Programme ■ Is the programme realistic ■ Development programmes – identify-

ing critical events ■ Efficiency & minimising lapsed time ■ Monitoring delivery and ensuring tar-

gets are met ■ Dealing with inefficiency & missed

targets ■ Consequences of timing changes – de-

lay or accelerationCase study: A brief look at the programme for the course long case. Are there aspects which should please and/or trouble us? Project Risks ■ What are the most common risks ■ Conducting risk workshops ■ Risk assessment during development ■ Risk measurement ■ Risk registers ■ Dealing with risks not measured or

disregarded by the project ■ Development risks – delays & cost

overruns ■ Risk protection ■ Risk transfer

Case study: “Northern Water” – a fictional high risk project which only works if it is structured properly.

Project Funding ■ Cashflows before, during and after

completion ■ Equity or quasi equity investment ■ Debt versus equity ■ Co-funding & contingent agreements ■ Covering funding shortfalls ■ Appropriate debt structure and terms ■ Managing exposure and maximising

security ■ Dealing with problems ■ When to cut losses and foreclose

Case study: A review of projections

to highlight the areas of concern and greatest risk as well as the comfort zones.

Monitoring Projects ■ General principles ■ Project managers versus project monitors ■ The role of monitoring reports ■ Operational challenges ■ The importance of cross party communi-

cation ■ Resolving disagreements ■ Cost effectiveness ■ Managing more than one monitor ■ Insurance especially PI

Case study: Looking at a report on the course long project. What does it tell us in practice? What should we do?

Project Ownership Structures ■ Considerations in selecting a structure ■ Project finance structures ■ Special Purpose Vehicle (“SPV”) ■ General and limited partnerships ■ Joint Ventures (“JVs”)

Case study: Looking at different structures to understand why each one is used and what risks arise as a result.

Sources of Funding ■ Types of equity and debt ■ Methods of obtaining finance ■ Structure of capital markets ■ International issues ■ Bond issues and securitisation

Case study: Using the course project, what sources of funding should be used and why. What should we do if the client wants a different approach?

Project Finance Documentation ■ The documentation process ■ Key “command & control” documents ■ Borrower needs ■ Sponsor needs ■ EPC needs ■ “Hot buttons”

Project Finance Risks ■ Classification and identification of risks ■ Risk matrices ■ The role of due diligence ■ Risk allocation and mitigation

Case study: The course length project starts to go wrong as a result of unmitigated risks. What should we do? What can we do?

Credit Enhancement and Security ■ What is available ■ Funder’s requirements ■ Perfecting, valuing and controlling security ■ Going or gone concern measurement ■ Enforcing security ■ Third party security ■ Practical considerations

Case study: The course length project is still in trouble. We are asked to review






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the security and our options.

Project Finance - The Lender’s Perspective ■ Key figures in the financial projections ■ Ratio analysis and limitations ■ Financial, covenant and country risk

ratios

Project Finance - The Sponsor’s Perspective ■ Methods of evaluating investment deci-

sions ■ Factors influencing the cashflows ■ The cost of capital – choice of discount

rate

Project Finance – What to do when it goes wrong ■ How “wrong” is a worry and what is

“normal” ■ General and limited partnerships ■ Joint Ventures (“JVs”)

Case study: Looking at different structures to understand why each one is used and what risks arise as a result.

Sources of Funding ■ Types of equity and debt ■ Methods of obtaining finance ■ Structure of capital markets ■ International issues ■ Bond issues and securitisation

Case study: Using the course project, what sources of funding should be used and why. What should we do if the client wants a different approach?

Project Finance Documentation ■ The documentation process ■ Key “command & control” documents ■ Borrower needs ■ Sponsor needs ■ EPC needs ■ “Hot buttons”

Project Finance Risks ■ Classification and identification of risks ■ Risk matrices ■ The role of due diligence ■ Risk allocation and mitigation

Case study: The course length project starts to go wrong as a result of unmitigated risks. What should we do? What can we do?

Credit Enhancement and Security ■ What is available ■ Funder’s requirements ■ Perfecting, valuing and controlling secu-

rity ■ Going or gone concern measurement ■ Enforcing security ■ Third party security ■ Practical considerations

Case study: The course length project is still in trouble. We are asked to review

the security and our options.

Project Finance - The Lender’s Perspective ■ Key figures in the financial projections ■ Ratio analysis and limitations ■ Financial, covenant and country risk

ratios

Project Finance - The Sponsor’s Perspective ■ Methods of evaluating investment deci-

sions ■ Factors influencing the cashflows ■ The cost of capital – choice of discount

rate

Project Finance – What to do when it goes wrong ■ How “wrong” is a worry and what is

“normal” ■ Monitoring systems ■ Communication ■ Options & Responsibilities ■ Gone and going concern analysis ■ Building out or foreclosing ■ Debt servicing & Repayment

Case study: Our case study needs serious help. What are our options?

Project Finance – Completion and Refinance ■ What do we mean by completion ■ Refinancing options ■ Do we want to stay involved ■ How can we assist the client further.

Case study: Our case study is complete and is a success. What are the re-financing options and how can we assist

Oil & Gas Finance – Case Study ■ Real case study to illustrate how these

work

Mining Finance – Case Study ■ Real case study to illustrate how these

work

LNG – Case Study ■ Real case study to illustrate how these work

Renewable Energy – Case Study ■ Real case study to illustrate how these

work

Course Conclusion ■ Summary ■ Review ■ Open forum






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Shariah Compliant InvestmentsIn-House or via Live Webinar

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Course OverviewIslamic Finance and Islamic Wealth Management are probably the closest the financial markets are ever likely to get to truly moral and ethical banking.

They remain a highly popular alternative to conventional products and are popular with both Muslims and Non-Muslims alike. Based on Islamic and Shariah principles they are mainly concerned with genuine profit and loss sharing with a real risk sharing ethic between banker and client.

Islamic wealth and fund management operates on the same principles as Islamic Banking and is equally popular. However, unlike conventional banking the product range is a lot narrower and although it continues to grow, the opportunities are more limited.

That said, to be a Shariah compliant investment requires compliance with a very strict code of ethics which tends to eliminate the speculative and highly geared opportunities. Accordingly, Islamic investments offer generally safer returns with steady growth and limited downside.

All three qualities make this an attractive proposition which is growing in popularity as an increasing number of offerings enter the market.

Learning Objective:This course considers the merits of Shariah compliant investments, explains how and why they are compliant and how they can be used to build a portfolio for the morally and ethically driven investor.

Teaching Methodologies:Classroom lectures and interactive practical workshop format intended to affirm the learning objectives.

Learning Pre-requisites:None although a basic knowledge of conventional fund management would be helpful.

What is an Islamic Finance ■ Definition – Fatwa ■ Source of funds ■ Use of funds ■ Contractual relationships ■ Profit & loss sharing

The Principles of Islamic finance ■ The prohibition of Riba ■ Real & notional interest ■ Fixed & variable interest ■ Interest as a return ■ Methods of Islamic investment ■ Trade credit & leasing ■ Islamic deposits

Case Study/Exercise

Shariah compliant Investment Vehicles ■ Wakala ■ Mudaraba – Restricted ■ Mudaraba – Unrestricted ■ Musharaka

Case Study/Exercise

Islamic Asset & Fund Management ■ Investors’ Objectives: ■ Capital preservation.

■ Maximise yields. ■ Industry screens ■ Balance sheet screens ■ Haram investments ■ Dealing with non-compliance ■ The role of the sharia scholars ■ Incorporation of Islamic doctrines. ■ Link to Sharia precepts & ethics. ■ Legitimate goods. ■ Moral behaviour & social objectives.

Case Study/Exercise

Islamic Bond Market (Sukuk) ■ What is a Sukuk ■ How do they differ from Bonds or other con-

ventional debt instruments ■ What impact will recent defaults have on glob-

al market ■ Two centres, GCC & Far East – differences in

approach ■ Specific differences

Course Conclusion ■ Summary, Revision, Open Discussion


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Trade Finance SalesIn-House or via Live Webinar

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Course Overview

Practical workshop on international payment and security instruments with special focus on documentary collections, documentary credits, demand guarantees and short term receivable finance from the sales perspective. The seminar has been developed to address the most important aspects of the trade finance in order to better understand needs of bank customers active in the international trade. In contrast to other seminars on trade finance, the focus on this trade finance sales workshop is to develop knowledge and understanding of the trade finance services in order to sell/offer these services effectively. The scope and the content of the course, consequently, has been tailored to meet this overall goal.To sell trade finance services to the customers effectively, one must: ■ understand how the main trade finance services and products work; ■ what are the overall benefits for their users, ie. bank customers; ■ what are the costs, risks, main practical issues involved and other main aspects which signifi-

cantly influence the bank – customer relationship.

This Workshop has been designed to deal with the most relevant aspects of trade finance sales and is, therefore, a must for: ■ bank relationship managers dealing with exporters, importers and traders; ■ bankers working in trade finance, particularly in documentary payments, bank guarantees and

export/import finance departments, especially those responsible for the business relationship with customers and their support in the area of trade finance;

■ specialists in trade finance with a working experience, back office bank specialists who wish to broaden their knowledge about trade finance from sales/relationship point of view;

■ lawyers, advocates, academics who want to learn about short term trade finance services with focus on their overall operations, benefits for users, costs, risks involved, etc.

The seminar deals with both the standard and more advanced situations and practical issues in relation to export and import documentary collections, documentary credits and their financing, demand guarantees in accordance with best practices as reflected in ICC rules and publications. A part of the workshop will also relate to short term trade finance, ie. factoring, use of credit insurance and will provide an introduction to supply chain finance. Objective of the training: The main purpose of the seminar is to familiarize the participants with the main trade finance products in order to understand how they operate, what are their main benefits for their users, but also what are the main risks involved, associated costs, the main issues the users face in their practice. The participants, after the course, would be able to speak knowledgably with their current and potential customers about the trade finance services their banks provide, thus better supporting the bank´s aspiration to increase the volumes and profits from these services, as well as enhancing the customer´s overall experience of dealing with the bank.

The seminar will be provided in the form of case studies, examples and discussions, i.e. active participation will be encouraged.

Material relevant to the course will be distributed and a certificate of attendance will be delivered to all those who completed the course.


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Trade Finance SalesContinued

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Day OneInternational trade, main issues, payment methods, financing needs International Trade – the main issues and risks to be considered ■ Risks from the Exporter´s perspective ■ Risks from the Importer´s perspective ■ Know Your Customer – his problems might

become your problems as well! ■ Contract of Sale – main aspects to be con-

sidered by the Exporter and the Importer ■ Contract of Sale from the banker´s point of

view ■ Delivery Terms as per Incoterms 2010 –

what do they do? ■ Delivery terms for any mode of transport ■ Delivery terms for marine transport ■ How to choose the right Incoterm? ■ The choice of delivery term from the financ-

ing banker´s point of viewCase Study International Trade – role of documentation ■ Main documents in international trade –

their roles ■ Financial documents, Commercial docu-

ments, Transport documents, Insurance documents – the main aspects to be aware about

■ Bills of Lading v. consignment notes – con-trol over the goods during transit

■ Security interest in the goods in transit from banker´s point of view

International Trade – risk mitigation tools, payment instruments and financing techniques ■ Main payment conditions in international

trade ■ Payment in advance, payment after delivery ■ Documentary Collections and how they op-

erate ■ The benefits for the Exporters and Import-

ers in using Collections ■ Documentary Collections from banker´s

point of view, an opportunity for the cross selling

■ Cost, risks, main mistakes in practice and how to avoid them

■ How to offer Documentary Collections to potential customers?

Case study – Collection in practice ■ Documentary Credits and how they operate ■ The benefits for the Exporters and Import-

ers in using Documentary Credits International Trade – risk mitigation tools, payment instruments and financing techniques ■ Trade Cycle of the Exporter and its financing

needs ■ Trade Cycle of the Importer and its financing

needsCase Study – delivery terms v. payment terms

Day Two

Documentary Credits and their financing, Bank Guarantees, Standbys, Receivable financingDocumentary Credits – How they function – best practices ■ Import Documentary Credit ■ Issuance of the Credit ■ The Application to issue a documentary credit

– main mistakes in practice ■ Import Documentary Credit as payment and

risk mitigation instrument ■ Cost, risks in Import Documentary Credits ■ How to offer Import Documentary Credits to

potential customers?Case study: issuance of the credit

■ Export Documentary Credit ■ Advising, Confirmation ■ Main mistakes in documentary credits from

Exporter´s perspective ■ Cost, risks in Export Documentary Credits ■ How to offer Export Documentary Credits to

potential customers?

Case study: mistakes in the export creditDocumentary Credits – Main financing services

■ Import credit – import financing (import loan v. deferred payment)

■ Export credit – pre-shipment finance – the benefits

■ Red clause, green clause credits, packing, manufacturing credits

■ Export credit – post-shipment finance, negoti-ation, post-financing, forfaiting – the benefits

■ Post financing: how to choose the right tech-nique?

Case study: cost of discounting a deferred payment credit

Use of credit and risk mitigation instruments: Bank Guarantees and Standbys ■ Bank Guarantees v. Conditional guarantees ■ Main types of guarantees, standbys ■ Examples of main types of guarantees

Case study: mistakes in an advance payment guarantee

■ How to offer bank guarantees to potential customers?

Receivable finance ■ Open account trade ■ Credit insurance – main principles from Ex-

porter´s perspective and from the perspective of the financing bank

■ Factoring – how it operates ■ Supply chain finance – main techniques ■ New developments: BPO, digitalization of

trade finance ■ Bank to Customer communication channels:

front end systems, etc. ■ Current main challenges: compliance issues,

new technology developments

Discussion


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Training & Competence Obligations

In-house or via Live Webinar

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Course Overview

The FCA requires that all firms employ personnel with the ‘skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them’ – the ‘Competent Employees Rule’ found in SYSC 5. Firms therefore have a general responsibility to ensure that their staff are, and remain up to scratch. Extra obligations are placed on staff who hold controlled functions under the FCA regime, for example, CF30 – the Customer Function.

When CF30’s deal with retail clients they are also bound by the requirements contained in the Training & Competence Sourcebook.

This course will cover all the obligations relating to training and competence, including ideas on how to devise an effective T&C regime, and how to assess competence and ensure it is maintained.

It will also provide delegates with an up to date picture of the FCA’s position on T&C, post Turner.

The Current Regulatory Regime ■ Treasury, BoE & FSA become FPC,

PRU and FCA from 1.1.13. ■ Reasons for the change ■ Dual regulation ■ Intrusive regulation ■ Conduct risk

Competent Employees and the Principles for Business ■ Principle 6 – ‘A firm must pay due re-

gard to the interests of its customers and treat them fairly’

■ Principle 2 – 'A firm must conduct its business with due skill, care and dili-gence'.

SYSC and the Competent Employees Rule ■ SYSC 5 requirements ■ Record keeping

■ Recruitment and HR procedures ■ Assessing and maintaining compe-

tence ■ The Supervisory Enhancement Pro-

gramme – FCA plans for the future ■ Remuneration of Approved Persons

The Approved Persons Regime ■ The Fit and Proper Test ■ FCA procedure ■ Statements of Principle for Approved

Persons ■ Code of Practice for Approved Per-

sons

CF30 Duties ■ CF30s who deal with retail clients ■ Appropriate examination require-

ments ■ Testing and supervision of CF30s


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Project Finance Modelling

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Course Objectives

Participants will: ■ Get an introduction on the project finance modelling ■ Have explained to them the best practice in model structures ■ Learn about the revenue & cost build-ups ■ Be taught about the inflation and escalation factors ■ Master the financing question ■ Gain an understanding of the modelling taxes ■ Get to grips the interest and fee calculations ■ Gain an appreciation of the balance sheet but also the ratios & covenants in Project Finance Model ■ Be appraised of a sensitive analysis in a project finance model


The trainer has over 30 years’ experience in a wide range of roles in finance. He has delivered training courses on behalf of a number of international training companies since 2005.

For the past 18 years, he has worked as a specialist financial modeller, trainer and analyst for a range of blue-chip clients, building financial models for major projects, structured financing, restructuring, outsourcing and PPP transactions in numerous sectors. He has built, developed and used models to support commercial negotiations, analyse risk, test scenarios and forecast results.

The trainer has trained others in his specialism of financial modelling, running both in-house tailored courses for clients and public courses with major training companies all around the world.

Course Overview

ObjectiveThe course is designed to support analysts to create and analyse project financial models on a consistent and focussed basis.

AimsThe principal aim of the course is enable participants to create, use and analyse a project finance model. This will be done by reviewing best practice in model structures and logic, building up calculations and using tools to analyse outputs, highlight areas of risk and perform sensitivity analysis. MethodologyThe learning methods used are practical, as practicing newly-learned techniques enables deeper and more effective building of skills. Each section will be covered briefly as a module in a traditional class style, but the real learning experience is in the exercises after each module. These gives delegates the chance to build project finance models based on real-life situations, practising what has been learned with support from the instructor. Suggested solutions to each exercise will be provided and discussed, and participants will be encouraged to review their work independently. Further supportingmaterials, including real-life project finance models and additional exercises will be available for further post-course learning, with ongoing support from the instructor.

Practical ExercisesEach module ends with a practical exercise, in which delegates put to use the skills they have just learned. Two small but comprehensive models will be created from scratch, with help and support provided by the facilitator. Starting with basic assumptions and input data, delegates will build models with financial structures, inflation, cash flow waterfalls, balance sheet and P&L, equity returns, ratios and cover factors, and sensitivities.

Headlines ■ Best practice in structure and techniques for financial modelling ■ Building flexible models to accommodate change ■ Understanding the cost of capital and financial structures for projects ■ Modelling funding structures and cash flow waterfalls ■ Integrated modelling with balance sheets and P&L statements ■ Using the outputs of the model – ratios, sensitivity analysis, scenarios



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Project Finance ModellingContinued...

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Course Content

Introduction & Course Objectives

Basic Introduction ■ What is a project? What are its defining

factors? ■ What is a financial model? How do we use

models in project finance deals?

Revision of Best Practice in Model Structures ■ Best financial modelling practice ■ Overall structure of a project finance model ■ Separation of inputs, calculations and out-

puts ■ Logic flow within a project finance model ■ Using flags to control timing factors in a

project finance model ■ Using switches to allow choices of different

options in a project finance model ■ Checks and totals, and error reporting ■ Set-up to make the project finance model

flexible ■ Use of corkscrews to determine the value of

items which change during the project ■ Building assumptions off the project finance

term sheets ■ Building-in ability to change and work

changes through the project finance model ■ Using validation to restrict ranges of inputs

into the project finance model ■ Version control for multiple versions of the

project finance model

Exercise – create an assumptions input sheet with built-in flexibility; use that to build a project finance cash flow calculation with flags, switches and corkscrews

Revenue & Cost Build-Ups ■ Build-up of project construction or other

capital costs (capex) ■ Use of lookup functions to change expendi-

ture timings ■ Building in sensitivities ■ Correct matching of units ■ Build-up of project operating expenditure

(opex) ■ Use of Maintenance Reserve Accounts in

project finance ■ Build-up of project revenues in the project

finance model ■ Exercise – to be done after inflation module

Day Two

Inflation / Escalation Factors ■ Using inflation indices in the project finance

model ■ Controlling start time of inflation in the pro-

ject finance model ■ Applying multiple rates to different cost &

revenue items ■ Varying inflation rates over life of the project ■ Exercise – building-up project revenue and

costs, including multiple inflation rates

Brief Overview of Modelling Taxes ■ Tax treatment of costs - deductible and

non-deductible ■ Capital allowances in project finance ■ Modelling tax losses in project finance ■ Distinguishing tax payable and instalment

paymentsExample - add tax calculations into in the project finance model

Interest and Fee Calculations ■ Circular references in the project finance

model and consequences ■ 5 ways to deal with circular references ■ Calculations of interest and debt fees in pro-

ject finance ■ Use of Debt Service Reserve Accounts in pro-

ject finance ■ Capitalised fees and interest in project fi-

nance ■ Fee costs, upfront and spread ■ Exercise – add a DSRA calculation into the

project finance model, and solve the resulting circular reference

Financing Section ■ Leverage, risk and funding project with debt

and equity ■ Calculating the cost of debt capital in project

finance ■ Calculating the cost of equity capital in pro-

ject finance ■ The project finance cash flow waterfall ■ Equity and debt drawdowns to fund the pro-

ject ■ Interest costs to the project ■ Debt repayment profiles out of project cash

flow ■ Project returns: overall viability of the project ■ Constraints on dividend payments to the pro-

ject sponsors





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Course Content

Introduction & Course Objectives

Basic Introduction ■ What is a project? What are its defining

factors? ■ What is a financial model? How do we use

models in project finance deals?

Revision of Best Practice in Model Structures ■ Best financial modelling practice ■ Overall structure of a project finance model ■ Separation of inputs, calculations and out-

puts ■ Logic flow within a project finance model ■ Using flags to control timing factors in a

project finance model ■ Using switches to allow choices of different

options in a project finance model ■ Checks and totals, and error reporting ■ Set-up to make the project finance model

flexible ■ Use of corkscrews to determine the value of

items which change during the project ■ Building assumptions off the project finance

term sheets ■ Building-in ability to change and work

changes through the project finance model ■ Using validation to restrict ranges of inputs

into the project finance model ■ Version control for multiple versions of the

project finance model

Exercise – create an assumptions input sheet with built-in flexibility; use that to build a project finance cash flow calculation with flags, switches and corkscrews

Revenue & Cost Build-Ups ■ Build-up of project construction or other

capital costs (capex) ■ Use of lookup functions to change expendi-

ture timings ■ Building in sensitivities ■ Correct matching of units ■ Build-up of project operating expenditure

(opex) ■ Use of Maintenance Reserve Accounts in

project finance ■ Build-up of project revenues in the project

finance model ■ Exercise – to be done after inflation module

Day Two

Inflation / Escalation Factors ■ Using inflation indices in the project finance

model ■ Controlling start time of inflation in the project

finance model ■ Applying multiple rates to different cost & rev-

enue items ■ Varying inflation rates over life of the project ■ Exercise – building-up project revenue and

costs, including multiple inflation rates

Brief Overview of Modelling Taxes ■ Tax treatment of costs - deductible and

non-deductible ■ Capital allowances in project finance ■ Modelling tax losses in project finance ■ Distinguishing tax payable and instalment

paymentsExample - add tax calculations into in the project finance model

Interest and Fee Calculations ■ Circular references in the project finance mod-

el and consequences ■ 5 ways to deal with circular references ■ Calculations of interest and debt fees in pro-

ject finance ■ Use of Debt Service Reserve Accounts in pro-

ject finance ■ Capitalised fees and interest in project finance ■ Fee costs, upfront and spread ■ Exercise – add a DSRA calculation into the

project finance model, and solve the resulting circular reference

Financing Section ■ Leverage, risk and funding project with debt

and equity ■ Calculating the cost of debt capital in project

finance ■ Calculating the cost of equity capital in project

finance ■ The project finance cash flow waterfall ■ Equity and debt drawdowns to fund the project ■ Interest costs to the project ■ Debt repayment profiles out of project cash

flow ■ Project returns: overall viability of the project ■ Constraints on dividend payments to the pro-

ject sponsors ■ Equity returns: viability measures for the pro-

ject sponsors ■ Exercise: create a project finance cash flow

waterfall with debt costs, repayment profiles,





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Funds Trasnfer Pricing


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The first day of the course focus on the role of the ALM function being “a bank within a bank” and covers some aspects of IRRBB positioning and maturity transformation management. It explains, in detail, how the split of the customer rate into FTP rate and commercial margin impacts the P&L result of the ALM function. The analysis is supported by the practical cases and exercises. This section also covers the methodological approach for the incorporation of the indirect liquidity cost into the FTP rate and its respective quantification. The second day is mostly focus on the FTP curve construct and importance of getting it correctly and in transparent way. It provides the audience with the practical examples of techniques adopted by the major market participants and the construct itself. Finally, it analyses the techniques for balance sheet shaping through the FTP process and stimulation to encourage origination of certain product instead of others. Learning Objectives: ■ Understand the FTP rate components and the role of the FTP process ■ Gain knowledge on the FTP construct ■ Gain knowledge on the pricing of contingent liquidity ■ Understand the principles for Interest and Liquidity transfer pricing ■ Understand the balance sheet shaping techniques

Who The Course is For: ■ Liquidity managers and IRRBB managers ■ Finance professionals ■ Bank treasurers and treasury professionals ■ ALM professionals ■ Advisors at consultancy firms ■ Bank supervisors

Prior Knowledge: ■ Basic understanding of banking treasury/ALM aspects ■ Familiarity with Basel III requirements ■ Familiarity with the concept of Interest rate risk and liquidity risk in banks

Day One What is Funds Transfer Pricing? ■ Sum of policies and methodologies for the

use and generation of liquidity ■ Robust model with different participants

involved ■ Maturity transformation as a main source

of earnings ■ External pricing versus internal pricing ■ Objectives of FTP

ALM role ■ The bank within a bank ■ Match Maturity Transfer Pricing ■ Separating interest and liquidity compo-

nent within FTP ■ Cost of contingent liquidity

■ ALM - Zero sum game ■ Why is it important to transfer risks to ALM?

Case study: calculation of Net Interest Margin in business units and ALM

• ALM as a business unit • Interest Rate positioning, extent of ma-

turity transformation and the optimal amount of liquidity buffer – decisions taken within ALM

Case study: analysis of the ALM P&L components Case study: hedging IRR - liquidity risk positions and FTP rate


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Funds Transfer Pricing

Interest Transfer Pricing best practices ■ Fixed rate products ■ Floating rate products ■ Prime rate products – basis risk ■ Interest rate treatment of items without

deterministic maturity

Case study: calculation of FTP rate for current accounts

Liquidity Transfer Pricing best practices ■ Does the liquidity component matter? ■ Case study: example of mortgage pricing ■ Calculation and allocation of contingent

liquidity cost to short term assets based on LCR

■ Treatment of behavioural options in FTP (prepayments and liquidity treatment of items without deterministic maturity)

Day Two FTP curve set up ■ Short term FTP curve ■ Medium long-term curve Balance sheet

shaping through FTP curve: application of management overlays and incentive pre-mium scheme

Case study: FTP curve set up in major banks Case study: Balance sheet shaping through FTP

Calculation of transfer prices for different products based on LCR and NSFR ■ Introduction to the behaviouralisation

concept ■ Behaviouralisation of balance sheet items

Case study: pricing of corporate loans and committed lines including LCR and NSFR

• What if there are more behavioural lia-bilities than assets?

FTP- are there any pitfalls? ■ Importance of transparency ■ FTP as a right pocket – left pocket ■ What if FTP model is wrong?

Target Operating Model and governance around FTP ■ FTP implementation challenges ■ FTP policy ■ FTP Practice Guidelines

Conclusions and questions



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Contemporary Challenges in the Asset Liability Manage-ment in Banks

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The role of the active management of the banking book in the banking industry is constantly growing. This is dictated by heavily regulated landscape and increased competition for resources such as liquidity and capital. Given the market pressure, the relentless pursuit for the most efficient and productive use of a bank’s resources subject to consolidated risk and return appetite remains of upmost importance for banks of all size. Consequently, strategic ALM can significantly improve financial performance by delivering a better balance between returns and risks across the on and off-balance sheet items. This advanced 3 -day course covers best practice in Asset - Liability Management (ALM), as well as ALM role’s as a strategic function in financial institutions. The first day of the course focuses on the role of the ALM function and its set up within the financial institution. It provides the audience with the overview of the best market practice to ALM and its evolving role in the overall profitability of the bank. During the first day, presenter walks the audience through techniques for the interest rate risk measurement and management in the banking book (IRRBB) and emphasizes the importance of the active management of IRRBB in ALM though undertaking profitability enhancement strategies. The second day covers, in detail, the new regulatory requirements for IRRBB (Basel Committee on Banking Supervision Standards) and provides the methodological support in the implementation of this requirement. The second part of the day is focused on the analysis of the balance sheet maturity transformation and liquidity risks. In particular, it aims to answer the question what is the proper size of the liquidity buffer in the financial institutions. The third day provides the overview of the Funds Transfer Pricing process and the role of the ALM unit in the FTP framework. The second part of the third day is dedicated to the balance sheet optimization techniques and acts as an introduction to the concepts of quantification and optimization of asset and liability structures.

Day One ALM Introduction and Overview ■ The evolving role of ALM in financial institu-

tions ■ ALM role as a bank within the bank ■ ALM as a business unit ■ Maturity transformation as a main source of

earnings ■ ALM - Zero sum game ■ Creation and categorization of assets and

liabilities in the banking book ■ Why is it important to transfer risks to ALM? ■ Development of ALM in the future

IRRBB measurement, management and strategies ■ Re-ricing Gap analysis as an important tool

for the understanding of the IRRBB position of a bank

■ Measuring Net Interest Income (NII) risks with static and dynamic sensitivity analysis

■ Measuring Economic Value of Equity (EVE) and its sensitivity

■ Analysis of the interest rate shocks ■ Analysis of the impact of the automatic op-

tions on the EVE metric ■ Re-investment and re-funding risks

Case study: calculation of the NII sensitivity and EVE volatility under different interest rate scenarios ■ Analysis of the basis risks ■ Analysis of the Credit Spread Risk in the bank-

ing book ■ Discounting with commercial margin and with-

out – external and internal view for IRRBB ■ IRRBB stress testing and capital allocation

Case study: assessment of the basis risk through re-fixing gap analysis ■ Interest Rate positioning – decisions taken

within ALM ■ Should we be able to increase risks to profit

from expected market conditions? ■ Interest rate treatment of items without deter-

ministic maturity ■ Structural hedging – margin compression




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Course Content

■ Analysis of the IRRBB metrics ■ VaR – calculation of interest rate risk in the

investment portfolio Case study: analysis of the IRRBB metrics – is the IRRBB well manged? Day Two Basel Committee on Banking Supervision Standards and European Banking Authority – detailed analysis of the requirements for IRRBB ■ IRRBB metrics and shock scenarios ■ Treatment of automatic options ■ Treatment of behavioural options (CASA

and prepayments) ■ IRRBB governance ■ Challenges with the BCBS 368 implementa-

tion Introduction to the liquidity risk managed within ALM ■ Maturity transformation as a main source of

liquidity risk ■ Contractual vs behavioural maturity ladder ■ Short term liquidity risk and liquidity met-

rics ■ Funding risk and medium long-term liquidi-

ty metrics ■ Tactical liquidity management ■ Liquidity buffer and counterbalancing ca-

pacity of a bank ■ What is the proper size of the liquidity buff-

er?

Case study: calculation of the size of the liquidity buffer in a bank

Trade-off between hedging and funding strategies ■ Impact of IRR and liquidity mismatches on

NII ■ Understanding the “trade –off” between

profitability and risk - real challenge of ALM analysis

■ Important links for liquidity management and transfer pricing through ALM

Case study: undertaking different hedging and funding strategies – what happens?

■ Is it better to manage the ALM position through natural hedging or derivatives?

Case study: Pros and Cons of the use of derivatives – practical example

Summary of the main take away messages for the IRRBB and liquidity management through ALM

Contemporary Challenges in the Asset Liability Manage-ment in Banks



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Tresuary Products

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Course Overview

This 2 day course is for staff who have already attended the introductory course or have gained experience with treasury and derivative products. They will also have a good financial market knowledge and be familiar with market terms and phrases. It is suitable for middle and senior levels of staff who need to expanded their knowledge of treasury products and their risks. It is also suitable for staff studying for professional studies. The course includes many practical case studies and examples

Introduction: ■ Short Term & Long Term Treasury Products ■ Risk and Reward ■ Risk Management ■ Value-at-risk Explained

Treasury Products – The Risks: ■ Market Pricing – the bid/offer spread ■ Liquidity and the Lack of Liquidity ■ Credit and Credit Rating

Short Term Treasury Products ■ Money Market Rates and ICE LIBOR ■ Implied Forward Rates and Using Them ■ Futures and FRAs Compared ■ Implied Forward Rates from Futures (STIR) ■ Interest Rate Options

• Caps (Vanilla/Digital) • Floors (Vanilla/Digital) • Collars

■ Overnight Index Swaps ■ Using OIS ■ LIBOR versus OIS ■ Structured Deposits Explained

Foreign Exchange Markets ■ FX Futures ■ FX Options on Futures ■ FX Options (OTC) ■ FX Exposure using Cross Currency Swap ■ Repo and Cross Currency Swap

Long Term Treasury Markets ■ Bonds and Bond Trading ■ Bonds Prices to Yield Curve ■ • Bootstrapping

• Using the Rates • Zero Coupon Curve • Forward Curve

■ Swap and Bond Prices ■ Using the Swap/Zero Coupon Rates

Interest Rate Swaps ■ Cross Currency Swaps ■ Mark to Market Swaps ■ Basis Swaps

Exotic Swaps ■ Constant Maturity Swaps (CMS) ■ Arrears Swaps ■ Accrual Swaps

Options ■ Pricing Options ■ BSOPM explained ■ Directional Trading Strategies ■ Volatility Trading Strategies ■ Option Arbitrage ■ Option Hedging Strategies

Exotic Options ■ Path Dependent Options

• Asian Options • Average Strike Options • Cliquet/Ratchet Options • Barrier/Knockout Options

■ Digital Options ■ Chooser Options ■ Delayed Options

Course Summary: ■ Structured Products in use ■ Clients using advanced treasury products cus-

tomers ■ Risk Management - Hedging ■ Discussion – Knowledge Expansion






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Client Relationship ManagementIn-house or via Live Webinar

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This course has been designed to assist senior investment banking executives to be completely comfortable marketing and selling products. Many banking delegates say it is surprisingly challenging to sell investment banking products and this is because of their special characteristics. First, they usually need to be explained in depth and this is not always easy to do quickly and succinctly. Secondly, some products can be complex making the explanation even more difficult and thirdly, there can be a lengthy decision process by either the bank or the customer or both. Banking and financial products are not bought lightly, or on impulse, and so they need to be sold in a careful and managed way. During this workshop style course, delegates will be encouraged to fine tune and improve on effective communication techniques and to share everyday experiences and challenges in managing client relationships in a fun environment The course is specifically designed to encourage group participation through the use of relevant exercises, role-plays and group discussions.

Session 1: Marketing Strategies ■ Positioning of investment banking products ■ Analysing the product range ■ Marketing channels ■ Target markets ■ Credit implications ■ Risk implications ■ Approval and sign off process

Role play/case study Session 2: Client Relationship Management ■ What is its purpose ■ How do we do it ■ Best practice/worst practice examples ■ Understanding the client ■ Ethical Banking considerations ■ Building the relationship ■ Sharia constraints where applicable ■ Setting strategic objectives for the relation-

ship ■ Presentation skills techniques

Role play/case study Session 3: What are “Investment Banking Products” ■ Conventional Credit Products ■ Islamic Credit Products ■ Private Banking Products ■ Treasury Products ■ Retail Products ■ Corporate Products ■ Wholesale Products ■ Institutional; Products


Session 4: The role of the Client Relationship Manager (CRM) ■ CRM in general ■ The CRM’s perspective ■ The client’s perspective ■ Dealing with success & disappointment


Session 5: Identifying Client Needs ■ Listening to the client ■ Non verbal communication ■ Need Reinforcement questions ■ The questioning structure ■ Uncovering sales opportunities ■ What does the customer actually need ■ Can you deliver this ■ Do you want to and on what terms

Role play/case study Session 6: Marketing Successfully ■ Client needs & strategy ■ Objection handling ■ The dos and don’ts of meetings ■ Differentiation & Positioning ■ Linking features to benefits ■ Negotiation versus selling ■ Planning the negotiation ■ Negotiating successfully ■ Negation styles ■ Closing the deal ■ Cross selling opportunities


Session 7: Prospecting – Including Cold Calling ■ How to prospect ■ The CRM’s priority list ■ Customer evangelism ■ Farming versus hunting ■ Targeting clients to call ■ Preparing for the calls ■ Pre-call communication ■ Handling the initial call


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■ Overcoming call resistance

Session 8: Planning the Sale ■ Getting the appointment ■ Building the relationship ■ The face to face meeting ■ Getting commitment ■ Measuring the stability of the relationship ■ When and how often to follow up

Role play/case study Session 9: Influencing Decision Making ■ Best practice ■ Worst practice ■ Closing the sale ■ Assumptive techniques ■ Cooling off periods ■ Handling resistance ■ Objection handling ■ Follow up ■ Monitoring ■ When to walk away

Role play/case study Session 10: Negotiating ■ Establishing what you can and cannot give up ■ WIIFM process ■ The art of negotiation ■ Negotiating fees and rates ■ Negotiating collateral requirements ■ What is “non negotiable” ■ Deal breakers ■ Client ”try-ons” ■ Key rules for a successful outcome


Session 11: Challenging Clients ■ The “problem” client ■ Overcoming Client resistance ■ Gaining commitment ■ Overcoming difficulties when Shariah inter-

venes Role play/case study Session 12: Making the Sale ■ Presentations ■ Explanations ■ Effective presenting techniques ■ Effective closing techniques ■ Presenting at the highest level ■ When to close ■ When not to close ■ Managing the process ■ Follow –up


Session 13: Follow Up & Success Indicators ■ How to follow up ■ When to follow up

■ Medium to use – phone, email or letter ■ Success indicators ■ Failure indicators ■ Managing indecision ■ The “trusted advisor” role ■ Closing ■ When to grant time ■ When to walk away

Role play/case study Session 14: Essential Self Management Skills ■ Time management ■ Planning ■ Monitoring delegated activities ■ Time out sessions ■ Internal records

Role play/case study Session 15: Cross Selling Techniques ■ How to achieve success ■ Only one “by the way” ■ Best practice ■ Poor practice ■ Avoiding sidetracking ■ Don’t conflict with “trusted advisor” role ■ Do sell something the client actually needs

Role play/case study Session 16: Telephone Selling Skills ■ Cold calling or pre-arranged ■ Farming or hunting ■ Planning the call ■ Making the call ■ Getting past “gate-keepers” ■ Keep it brief ■ Handling objections ■ Follow up actions ■ Dealing with success & disappointment

Role play/case study Session 17: Course Conclusion ■ Summary ■ Questions/Open forum

END


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Overview of the commodity markets ■ Major price drivers ■ Supply Constraints ■ The Impact of China ■ Investing in Commodities ■ Correlations ■ The markets

• Spot and forward markets • Futures & options • Trading options • Trading on margin

■ Benchmark Derivative Contracts

Course Content

Commodities Markets

The Energy Markets ■ Understanding oil & energy ■ Macro-economic events ■ Geo-political risk ■ Oil

• OPEC & non-OPEC production • Benchmarks • NYMEX WTI • ICE Brent • Light and Heavy Oil • Sweet and Sour

■ The energy exchanges • LME

■ Energy Products • Electricity and Gas Markets • Spark Spread

■ Trading & trading strategies

Base Metal Markets ■ About base metals ■ Price drivers ■ The exchanges ■ Base metals ■ Trading & trading strategies

Gold and Precious Metal Trading ■ Understanding gold ■ Silver & PGMs (Platinum Group Metals)

Agricultural Markets ■ Overview of Agricultural Products ■ Price drivers & seasonality ■ Weather ■ Trade associations & government control ■ The products ■ Market reports

■ Price drivers ■ Producer/retail hedging

The Economics ■ Global markets & supply & demand ■ Economic growth ■ Natural & man-made disasters ■ Producer data and inventories

Future Price Trends ■ Delegates are asked to look at past and pres-

ent price charts and come up with some ideas about the future trends for various commodi-ties.

■ We discuss their findings and discuss what sort of investment and/or trade would best match their risk / reward structure.


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Attendees will understand the basic concepts of what happens throughout the Life Cycle of a securities transaction. They will also gain a thorough knowledge of the recent and complex changes pre trade, trade and post trade environments, caused by the suite of regulatory changes sweeping the markets.

Course Content

Life Cycle of a Security

Trading Equities ■ Traditional Stock markets ■ MTFs ( Multilateral Trading Facilities) ■ Dark Pools ■ Light Pools

Trading Bonds ■ Is bond trading still an OTC market? ■ Basic market structure

• Banks • Asset Managers • Corporates, Sovereign Wealth Funds

etc.

MiFID II ■ Pre-trade transparency ■ Post-trade transparency ■ Best execution ■ Systematic Internaliser ■ Client categorisiation

Pre Settlement ■ Block Trades ■ Allocation ■ Tax and Commission ■ Confirmation and Matching

Clearing and Settlement ■ Multilateral Netting at the Clearing House

eg LCH Clearnet ■ Gross Settlement / DvP at the CSD ■ ICSDSs and Local CSDs ■ The role of the Custodian ■ Fails and Fails Management

Case Study: We follow a UK share trade through settlement at Euroclear London. Examining why trades are included in multilateral netting and the benefits of this procedure. Also why trades fail and the possible costs.

Funding ■ Funding the Trade

Exercise: A traders bond position is partly hedged with futures and funded by the bank. Delegates calculate the Net Interest Income (N.I.I.)

■ Funding the Bank • Liquidity Coverage Ratio ( LCR) • Net Stable funding Requirement (NSFR)

Case Study: We look at banks ratios, why it is a regulatory requirement to maintain them and how they are calculated. We also look at if a top bank is achieving these ratios.

Securities Settlement in Europe v USA ■ Fed and DTCC ■ Euroclear , Clearstream and Local European

CSDs ■ T+2 Settlement : Group Discussion: What is

the future for Securities settlement in Europe.

The Role of the Central Counterparty ■ Major CCPs ■ Role of the CCP ■ Multilateral Netting ■ Marginning ■ Collateralisation of Residual Net Exposures ■ Novation

Case study: How the CCP works. We look at a diagram putting all the individual parts together. Exercise: Delegates are asked to complete missing parts of the diagram, ensuring a full understanding of the process.

Securities Use as Collateral ■ What is Collateral? ■ Use in Securities Lending ■ Use in Repo

Exercise: Delegates are asked to take securities lending and repo trades and calculate margin calls, based upon haircuts, MTM and collateral type.


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Rehypothecation ■ What is Rehypothecation ■ Impact on Hedge Funds Funding

Regulatory Reporting ■ EMIR ■ How to Fulfil the Reporting Obligation ■ Data Repositories ■ Legal Entity Identifiers ■ Reduction of Capital through Collateral

Basel III/CRD IV ■ Capital Requirements ■ Leverage Ratio ■ Liquidity Rules ■ Supervisory Review ■ Disclosure ■ Large Exposures

Group Discussion: How much of this has been implemented? What effect will it have? Is there a need for more regulation?


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Quizzes, case studies and exercise are used though out to aid learning.

Course Content

Securities Settlement and Global Custody

OTC v Exchange Traded Securities The Settlement Cycle ■ Trade Capture / Matching / Settlement /

Reconciliation ■ Rolling Settlement (T+3) v Account Day ■ Replacement Risk

Central Securities Depositories (CSDs) ■ DvP and DFoP ■ RTGS v Netting

International CSDs ■ Euroclear and Clearstream ■ Their Role in the Market Place ■ RTGS (Real Time Gross Settlement)

Local CSDs Crest ■ Settlement in Central Bank Money ■ Multilateral Netting ■ DTC and Federal Reserve in the USA ■ Local CSDs

Reconciliation ■ Double Entry Book Keeping ■ Depo and Cash Accounts ■ Breaks

Case Study / Recognising a break and what to do next! Overview of the Life Cycle of a Securities Trade Trade Capture / Confirmation \ Instructions Validation / Matching / Reporting Unmatched Investigation and Repairs / Settlement and Fails / Fails Management Reconciliation / Breaks Simulation: Securities Settlement Delegates work in teams to settle basic transactions. This simulation is revisited throughout the course as delegates realise that even with confirmation, matching and reconciliation processes, you can still end up with failed trades and

monetary losses. They are encouraged to manage these losses through funding their nostros and utilising stock borrowing. Delegates quickly learn how easy it is for settlement to go wrong and the costs involved! And importantly what can be done about it.

Global Custody

Introduction – covering a definition of Global Custody, who provides the service, the users, their requirements and types of custody

What is a Sub-Custodian ? ■ The Risks!

Basic Custody Services ■ Settlement

• The key settlement process steps ■ Safekeeping of securities ■ Income collection ■ Corporate Actions ■ Cash Management ■ Funding

• Interbank cash market • The importance of repo • Tri – partite repo

■ Withholding Tax reclamation

Value Added Services ■ Securities lending and borrowing

• Basic outline of a securities lending trade • The use of collateral • Fees, haircuts, margin calls

Exercise: calculating fees and margin calls on securities lending trades

• The role of ICMA and ISLA • The importance of securities lending to the

profitability of a Custodian ■ Investment Accounting ■ Operational Performance Measurement ■ Trustee services ■ Portfolio valuation ■ Derivatives


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Course Content

• The Derivatives market • ETD Clearing

ӹThe role of the clearing broker

Case study: we look at how trades are “given up” to the clearing broker for settlement and why this is important

• OTC Clearing ӹWhy and where are IRS and CDS trades now cleared?

■ Collateral Management • Why collateral must be managed! The

risks of poor management ■ Emerging Markets Coverage

Corporate actions ■ What are they? ■ Why do they occur?

• Common types of corporate actions and examples ӹEquity Restructuring ӹConsolidation or Reverse Split ӹCapital Repayment ӹBuy – Back ӹWarrant Exercise ӹDebt Restructuring ӹDebt Redemption ӹRaising of Capital ӹRights Issue ӹCase study

■ Dividend Life Cycle

Exercises: Basic dividend calculations

• Record date / ex date / pay date • Exercises are used to enable the dele-

gates to understand the importance and impact incorrect record keeping can have

• Market claims • The stock record

■ Impact of corporate actions on derivative products

■ The growing importance of proxy voting ■ Importance of timing

Custody Charges ■ What does Custody cost?

Request for Proposals (RFPs)

Case Study: Choosing a Custody Service Provider See below for details Request For Proposal Case Study

Delegates are put into teams and asked to “play the role” of a Middle Eastern investor looking to choose a Custodian. They are given the requirements of the investor, in terms of market coverage etc and then are asked to identify 10 key topics on which potential suppliers of your Global Custody services can differentiate themselves: Some of the Key Topics to be addressed during selection, should include: Importance of the custody division to the custodian’s overall business. Settlement standards and practices. Safekeeping standards and practices. Systems and communications. Corporate action procedures.

Income collection and tax reclamation Geographical coverage. Nature of global network. Quality of sub-custodian network Delegates will then be asked to give a short presentation on the key topics of their Request for Proposal (RFP)!


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Course Content

OTC Derivative Products, and their Life Cycle Beyond the Trade


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Course Overview

Overview of the ProductsThere will be simple exercises to check for understanding and answer any questions regarding the products:

■ Interest Rate Swaps• Recap of basic structure• Exercise: Buying a swap from a market maker• Exercise: Hedging a floating exposure• Case study; of a more complex product; amortising swap

■ Foreign Exchange Forwards• Recap of swap price and outrights• Exercise: Pricing a forward swap• Exercise: Corporate hedging a future revenue• Case study: More complex product example ; NDFs used for speculation and /or hedging

purposes. ■ Credit Default Swaps

• Overview of CDS and iTraxx structures• Exercise: Buying and selling CDS to make a profit• Using an iTraxx Index to create a basic investment

Major players in the OTC Derivative World and why they use Derivatives

■ Investment Banks ■ Asset Managers ■ Corporates ■ Sovereign Wealth Funds

ISDA Master Agreements ■ What is an ISDA and what role does it play

in OTC Derivatives ■ Credit Support Annex (CSA)

Mifid II ■ LEIs ….Legal Identity Identifiers (in appro-

priate locations) ■ Systemic Internalisers … How OTC deriva-

tives trade

How the Modern OTC Derivative Market Works ■ Which derivatives trade on electronic plat-

forms? ■ SEFs (Swap Execution Facility) and OTFs

(Organised Trading Facilities) ■ Central Counterparty Clearing (CCPs) ■ Collateral and how this works in a trade

■ Overview of CVA (Credit Value Adjustment) ■ How Banks can still make money from a

trade. (Bid / offer spread) Life Cycle of a Trade (Post trade)Valuation / Mark to Market (MTM) ■ How to value an IRS?

• Break a swap into 2 bonds Floating and Fixed

• Exercise: valuation of a vanilla swap ■ How to value an FX Swap

• Exercise: valuing an FX swap ■ Valuing a CDS and iTraxx

• Exercise: valuing an iTraxx trade ■ Mark to Model...what are the risks ?

Trade Reporting ■ EMIR Reporting

• The role of the AFM (Authority for Finan-cial Markets) in the supervision of EMIR

• Transaction reporting Obligation• Which investment Firm should report ?• Who doesn’t need to report ?• How do firms report ?• Dispute Resolution• Who are the top Repositories?


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OTC Derivative Products, and their Life Cycle Beyond the Trade


Course Content

OTC Derivative Clearing and Settlement ■ Confirmation and affirmation ■ Payments and Controls (SWIFT) ■ Nostro reconciliation and breaks ■ Novation

• How does it work …a solution to coun-terparty risk ?

• Tear Ups ■ The Central Counterparty clearing process

• Case study: clearing swaps ■ The major OTC Derivative platforms:

• Markit Serv• SwapClear• DTCC Deriv/SERV

■ TIW

Collateral Management ■ ISDA Master Agreements ■ Credit Support Annex ■ What types of collateral are accepted? ■ Reduction in Counterparty Risk ■ Portfolio Reconciliation ■ Dispute Reconcilation

• Dispute reconciliation exercise

Regulatory Summary ■ What impact is all the regulatory changes

having on the market place ? ■ Group Discussion and wrap up



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Course Content

Selling Derivative Solutions


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Course Overview

Delegates who attend this course will learn how Global Markets operate and what affects them on a day to day basis. They will understand the financial risks that Corporates have to deal with and how to advise them when creating a hedging strategy.Participants will learn how to gain the clients trust, by being able to discuss their needs and present basic potential solutions, which in turn creates business (selling derivatives) for Global Markets.They will be able to do this because they will have been given the tools to understand and explain the markets better and will have a broad based general understanding of what affects their client’s financial risks, from a political, economic and regulatory standpoint. They will have also gained an understanding of the risks involved, from both the clients and banks point of view and gained an appreciation of how the ever changing financial markets operate. Each region or country can have the course tailored to their needs. Is there a specific requirement for a more detailed look at a particular area, for example: an ISDA Master Agreement, or specific local rules, or hedge accounting then of course these can be included.

Who should attend: ■ Corporate Relationship Managers ■ Junior sales staff ■ Risk ■ Compliance ■ Anyone interested in derivatives or the process of selling derivatives to clients.

Understanding Global Market Conditions

■ What is the yield curve? ■ What do the major yield curves look like

today and why ■ Understanding of the types of yield curves

eg: spot and forward to gain credibility with our clients

■ Basic Pricing of Forward Curve ■ Overview of FX markets ■ What’s influencing the FX market today ■ Volatility: What is it and why is it a good

thing ■ Why it is important to engage clients in con-

versation about the markets and the specific risks that are affecting them.

■ Which derivative products are clients cur-rently using?

Exercise: Examining Market Conditions

Participants are given current and historical yield curves and currency graphs and asked the questions below, with a discussion to follow. ■ Can you spot any trends in the market

movements? ■ Do you think interest rate volatility is larger

or smaller than FX volatility? ■ What do you think are the sources of this

volatility? ■ Do these graphs tell you anything about

future market conditions, and if so, what? ■ Why we must never personally tell our

clients where we think the market is going.

■ What’s the client’s opinion on the market? ■ Risk Management Overview ■ Understanding types of risk ■ What is risk management? ■ Tactical and strategic exposures including

translation and transaction risk ■ Understanding the Risk Management

Matrix

Case Study – Risk Management Participants will examine one of two customer profiles depicted in the case studies. The cases are based on corporate clients Financial Statements. Groups will complete a Risk Management Matrix to analyze sources of risk and how they relate to the business and financial strategies of the company.

Client Meeting Case Study Part 1 – Groups of participants will now examine different clients in order to prepare for a “role play” meeting. They should be prepared to discuss:

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Course Content

Market reviewIdentifying exposures using the Risk Management MatrixInterest rate and FX risk management strategiesInterest rate and FX enhancement opportunities

Interest Rate Derivatives & Strategies ■ Basic interest rate swap structures ■ Using interest rate forwards, swaps and

futures ■ Amortizing, forward-start and basis swaps ■ Customizing swaps for clients ■ Fundamentals of options ■ Interest rate caps, floors and collars and

how to position them with clients

Foreign Currency Derivatives & Strategies

■ Major players in global and local FX markets and discuss role of each

■ Pricing techniques and regional hedging conventions on FX forward contracts

■ Discuss and calculate FX forward outright prices

■ Using currency forwards and swaps in local markets, including NDFs where applicable

■ Fundamental option strategies in forex ■ Advanced FX forward applications

Case Study – Part 2: Meeting the Client: Role Play

a) Participants will now enter in to a role play discussions with clients (the trainer and/or other delegates), Considering current market conditions and by discussing the clients financial position and risk, identify the client’s needs. Feedback would then be passed on to HSBC senior management leaders and/or derivatives markets product specialists to follow up with specific solutions.

b) Delegates will prepare basic solutions to their client’s needs, making sure to give 3 possible choices for each. The client gives feedback and Global Markets are contacted for a more detailed review.

Organizational Issues and Challenges Using Derivatives: The Risk side of Global MarketsFor sell-side and buy-side users of derivatives, there are a number of organizational issues associated with derivatives, including: ■ ISDA Master Agreement ■ Credit Support Annex (CSA)…… how collat-

eral works

■ Market Risk: VaR ■ Credit Risk: Counterparty risk (CVA and how it

effects pricing ■ Liquidity Risk: Ability to realize positions and

fund activities ■ Hedge Risk: Effectiveness of hedges ■ Operational Risk: Internal controls and safe-

guards

Case study: We look at a simple IRS and discuss the potential risks and decide how these can be mitigated theoretically and in practice.

■ Mifid II LEIs ….Legal Identity Identifiers (in ap-propriate locations)

■ Systemic Internalisers

How the Modern OTC Derivative Market Works

■ Which derivatives trade on electronic plat-forms?

■ SEFs (Swap Execution Facility) and OTFs (Or-ganised Trading Facilities)

■ Central Counterparty Clearing (CCPs) ■ Collateral and how this works in a trade ■ Overview of CVA (Credit Value Adjustment) ■ How HSBC make money from a trade. (Bid /

offer spread) ■ Covering the risk on options …delta hedging

Hedge Accounting ■ Referring to our Case study we discuss basic

Hedge accounting rules ■ Fair Value Hedging ■ Cash Flow Hedge ■ Investment Hedge ■ The 80/125 Rule

More Complex Products Case studies based on more complex products that clients are using: ■ NDFs (Non Deliverable Forwards) in practice ■ FX Options ■ Interest Rate Products

Overview of a Client Proposal and Final Thoughts

Appendix

Overview of other OTC Derivatives and Client Needs ■ Credit Derivatives (CDSs) ■ Equity Derivatives (Managing risk of other com-

pany interests and Employee option schemes) ■ Commodity Derivatives

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Course Content

Hedge Funds and Alternative Investments


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How do Hedge Funds fit into the Investing Universe? ■ Mutual Funds and OEICs ■ ETFs ■ UCITs and SICAVs

What is a Hedge Fund Looking to Achieve? ■ Absolute vs. benchmarked returns ■ Alpha vs. beta; portable alpha ■ Minimising correlations

Hedge Funds Characteristics ■ History, evolution and size of the hedge

fund industry ■ Market participants ■ Mutual funds vs. hedge funds

• Hedge fund characteristics • Trading approach, fee structures, mini-

mum investment, redemption and other differences

Hedge Fund Strategies and Associated Risks ■ Directional strategies

• Long/short equities • Global macro and managed futures • Emerging markets

■ Relative-value strategies • Equity market neutral • Convertible bond arbitrage • Fixed income arbitrage

■ Event driven strategies • Risk arbitrage • Distressed securities

■ Financial and trading risk • Market, model, liquidity, correlation,

credit and operational risks ■ Risk management

• Cash and margin accounts • Leverage

■ Money management • Controlling risk and volatility at the

trade level and the portfolio level

Performance Measurement ■ Profit ■ How use ful are Hedge Fund Benchmarks ! ■ Sharpe ratio ■ Sortino Ratio ■ Drawdowns

Accessing Hedge Funds and Portfolio Construction ■ Accessing hedge funds

• Single managers/managed accounts • Fund of funds • Guaranteed products • Benchmarking and investable indices • Offshore/ on shore funds

Due diligence process and hedge fund portfolio construction ■ Qualitative due diligence ■ Quantitative due diligence ■ Impact of adding hedge funds to a tradi-

tional portfolio

Operational, Legal, Regulatory Issues and Hedge Fund Marketing ■ Administration, legal and tax issues

• role of the administrator • role of the custodian • role of the prime broker

■ Domiciliation and regulatory issues ■ Tax issues

Marketing Hedge Funds ■ Investor demand and expectation ■ Outlook for hedge funds

Basic Statistical Tools for Assessing Performance ■ Basic statistics for hedge fund analysis

• Normal distribution/ skew and kurto-sis

• Performance to risk ratios • Correlation • Comparison to peers

Case Studies: Analysing and comparing various types of real-life funds

■ Convertible arbitrage fund ■ Long short equity fund ■ Global macro fund ■ Fund of fund

Recap on Hedge Funds ■ How big is the fund? ■ Drawdowns ■ Asset Quality ■ The role of the Custodian ■ Leverage ■ Performance

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Alternative investments ■ Characteristics of alternative investments ■ Role in a portfolio, impact on risks and

return ■ Trends in the industry ■ Valuation issues

Commercial Property ■ Sector performance – office, retail and

industrial ■ Direct investment versus collective ■ REITs

Private Equity ■ Venture capital, leveraged buy outs, mez-

zanine financing etc. ■ Valuing private equity ■ Comparison with listed equity ■ Advantages and disadvantages of invest-

ing in private equity

Others ■ Commodities, infrastructure. Distressed

Securities ■ Precious metals, oil and gas, base metals,

soft commodities etc.

Historic Performance of Alternatives

How to gain exposure ■ Listed shares ■ Funds, ■ Futures ■ ETFs

Alternative Alternatives ■ Art ■ Antiques ■ Wines ■ Cars

Comparison to hedge funds (liquidity, payoff, risk control)

Exercise: Delegates, in teams, are asked to decide where they would invest their portfolio of $10m

What are the potential rewards?

What are the risks?!!

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Real Estate Investement and Management - South Africa


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Course Overview

The course has four primary aims: ■ To create detailed knowledge of the issues, problems and opportunities for the property indus-

try ■ To develop a greater understanding of the role of property within the overall development and

investment strategy of an organisation ■ To appreciate the investment strategy into real estate required for a pension fund, especially in

the South African context ■ To enhance the management and organisational skills necessary for effective property manage-

ment

Day 1 Real Estate as an Investment Real Estate Background: ■ Real estate investment and management

within the larger global economy ■ Types of property and their performance

Case Study: The emergence of land and property as a crucial investment class

■ Valuation theory and Applications

Examples of Land and Property Valuations

■ Property taxation, valuation and legal framework

■ Real estate in South Africa – private own-ership, recent development, stock markets and family investments

■ Key stakeholders within the property in-dustry

■ Property professionals and their role

Case Studies: The Royal Institute of Chartered Surveyors and the Urban Land Institute

Financing Property Purchase ■ Bank loans for property investment ■ Secondary loans

Case Study: Debt formulation and deal structuring in real estate investment ■ ■ Equity investment ■ Calculation of returns

Examples of Excel financial models for real estate investment analysis –

different classes of investment

■ ARGUS DCF Valuation software demonstration

Property and Conveyancing Law ■ Legal principles, structure, court and devolu-

tion ■ Legal issues for property professionals

Examples of legal issues for property investment

■ Law of contract ■ Law of Tort, nuisance and negligence ■ Land law, property rights and obligations ■ Applied property law, legal issues in building

and construction, planning and development, liabilities for owners / occupiers

■ Islamic property legal issues ■ Mortgage Law

Case Study: the South African mortgage market ■ Differences in real estate law between South

Africa and other jurisdictions Case Studies of real estate law and legal decisions

Day 2: Property as an asset class All About Leases ■ Nature and creation of leases ■ Differences between types of commercial

property leases ■ Commercial leases and statutory control ■ Residential tenancies and statutory control ■ Structure of leases e.g. length of the lease

period; including options for tenant alter



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■ ations and expansion

Lease Calculations (with worked examples and exercises)

■ Rent reviews and lease renewal options ■ Covenants to leases e.g. repairing liability,

occupancy conditions, sub-leases, termina-tion, service charge provision

Tenant Management ■ Qualifying the prospective tenant financially

Case Studies: Do Ratings Work?

■ Marketing considerations for office build-ings – understanding the market, building a marketing plan, measuring marketing efficiency

Group work: preparing a marketing plan for a commercial building in Johannesburg

■ Advertising and public relations; how to get referrals; canvassing for tenants; preparing a rental sales plan

■ Security deposits and other negotiation issues

■ Inspections ■ Effectively handling inquiries and com-

plaints ■ What to incorporate in tenant and director’s

meetings

Group work: Handling tenant negotiations

■ Housing and tenant management Bricks and Mortar ■ Property Management ■ Advanced Operations And Facilities Manage-

ment ■ Occupational Health And Safety ■ Maintenance and Structural Preservation ■ Procurement and Supply Chain Manage-

ment ■ Property Life Cycle Planning ■ Sustainability and Real Estate Management ■ Information Technology ■ Staffing ■ Management ■ Contracts and Outsourcing

Business Management ■ Strategic business planning processes ■ Business life cycle

■ Analysing industry trends

Examples of real estate investment and occupancy strategies for pension funds and companies ■ Accounting and monetary practices ■ Insurance

Financial Management Principles ■ Reporting procedures in the management of

different kinds of properties ■ Preparing profit-and-loss statements ■ Tax implications; tax records; ■ Cash flows; depreciation; investment tax cred-

its; after-tax cash flow; ■ Risk management and how to obtain proper

insurance ■ Accounting theory and methods ■ Asset and liability valuations ■ Budgeting and cash flow analysis

Case Studies; principles of real estate management budgets

■ Decision making based on cost data; indus-trial, commercial and property finance; ratio analysis

■ Property accounting principles for investors (including IAS)

■ Presentation to clients and management of client’s accounts

Case Study: financial management - outlining a property’s sources of income and types of expenses and how they are accounted and reported

Real Estate Strategy ■ Principles of property management within the

built environment and a business environment ■ Private and public strategy for the manage-

ment of property resources within an opera-tional plan

Case Study: Government real estate planning, institutions and strategies

■ Application of legal and planning restrictions on asset enhancement

■ Corporate property strategy

Case Studies: Sale and Leaseback

Ownership Forms and Goals ■ Ways investors can own real estate and their






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■ expectations for this type of investment ■ The role of real estate funds

Operational Property Portfolio Planning ■ Master, action and project planning ■ Change management and relocations ■ Selling property

Group work: preparing a sales marketing plan for a commercial property

Portfolio Analysis ■ Comparison of risk–return profiles of real

estate and financial investment assets ■ Measuring investment performance ■ Principles of portfolio diversification ■ The case for active portfolio management ■ Application of property within a larger

non-property investment market ■ The nature of risk and return from prop-

erty compared with bonds and equities

Case Studies: portfolio management and property investment – how much property should a fund hold?

Course Conclusion





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Real Estate Investement and Management - Hong Kong


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Course Overview




the Hong Kong context ■ To enhance the management and organisational skills necessary for effective property manage-

ment







■ Real estate in Hong Kong – private owner-ship, recent development, stock markets and family investments















Case Study: the Hong Kong mortgage market ■ Differences in real estate law between Hong

Kong and other jurisdictions Case Studies of real estate law and legal decisions









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Group work: preparing a marketing plan for a commercial building in Hong Kong

■ Advertising and public relations; how to get referrals; canvassing for tenants; preparing a rental sales plan




meetings





Business Management ■ Strategic business planning processes ■ Business life cycle

■ Analysing industry trends
























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Course Conclusion





Course Content



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Real Estate Investement and Management - UAE


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Course Overview




the UAE's context ■ To enhance the management and organisational skills necessary for effective property manage-

ment







■ Real estate in UAE – private ownership, recent development, stock markets and family investments















Case Study: the UAE mortgage market ■ Differences in real estate law between UAE

and other jurisdictions Case Studies of real estate law and legal decisions









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Group work: preparing a marketing plan for a commercial building in Dubai ■ Advertising and public relations; how to get

referrals; canvassing for tenants; preparing a rental sales plan




meetings





Business Management ■ Strategic business planning processes ■ Business life cycle ■ Analysing industry trends
























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Course Conclusion





Course Content



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Real Estate Valuation - South Africa


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Course Overview

This course covers the methods, concepts and application of real estate valuation. At this course, you will learn to value most typical forms of real estate using a variety of techniques and methods, in the same way as a chartered surveyor. The focus is on properties and market conditions in South Africa, but with plenty of international examples, including land, properties with development potential, and different classes of property such as offices, retail, hotels, and warehouses as well as residential property valuation.

Top 5 Learning Objectives ■ Understand the most widely-practiced property income and capital valuation techniques ■ Identify the cost of capital for real estate ■ Successfully implement discounted cash flow valuation frameworks ■ Acquire the ability to value a range of different types of properties ■ Appreciate international differences in valuation approaches

Day 1

Real Estate As An Investment ClassProperty Performance Analysis ■ How is property measured? ■ Identifying what makes a good property ■ Problems and issues with performance

evaluation ■ Sources of data ■ Evolution of data measurement ■ International comparisons of performance ■ Current issues in performance manage-

ment

Case Study: Best international practice in property performance measurement

Property In The Investment Portfolio ■ Concept of Modern Portfolio Theory (MPT) ■ Measuring variance (Beta and equivalents) ■ Constructing a portfolio ■ Property correlation with other assets ■ Best international practice on property in a

portfolio ■ International trends in property correlation

Case Study: Pension fund and private equity investment in African property

RICS Valuation Standards ■ Appraisal of income property – RICS Valu-

ation Practices and international compari-sons

■ Comparison with corporate finance valua-

tion ■ Reporting according to IFRS standards ■ Types of valuation approach ■ Important aspects of the RICS Valuation

Standards (including valuer independence)

IFRS Valuation and Real Estate

Concepts of fair value ■ Accounting implications of the valuation of

non-financial assets i.e. investment properties and property plant and equipment, leasing, impairment, and comparisons with equity

Relevant IFRS standards for real estate ■ 8 Operating segments ■ 13 Fair Value ■ 16 Property, plant and equipment ■ 17 Leases

Case Study: Does the transaction fall under IAS 17? If so, is it a finance or an operating lease?

■ 23 Borrowing costs ■ 36 Impairment ■ 40 Investment property ■

Case study: Deciding whether a property is an investment property

Case Study: Ascertaining the reliability and accuracy of the values taken into financial statements in compliance with IFRS statements



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Basic accounting decisions and their implications for preparers and users ■ Choosing between the cost model and the

fair value model ■ Cost model: how to determine initial cost

including borrowing costs and appropriate depreciation schedule

■ Identifying relevant indicators for impair-ment review

■ Estimating recoverable amount: ‘Value in use’ versus ‘Fair value less costs to sell’

■ Fair value model: Estimating fair values (a) of unique assets and (b) in illiquid markets

■ Setting valuation assumptions ■ Trading and development properties

Case study: Property leases: some special issues and their impact on the financial statements

■ Rent-free periods and other incentives ■ Tenants’ improvements ■ Step-up rents ■ Disclosures, especially with regard to

management judgements, impairment and revaluations

■ Review of corporate accounts, GAAP and IFRS consolidation rules and other issues associated with SPVs

Worked exercises: Comparing corporate annual reports with real estate values calculated

Group discussion: Is valuation in South Africa adhering to best international practice?

Residential Property – Assessing Capital Value ■ Why buy residential real estate? ■ Does rental income matter for residential

property? ■ What are the main problems? ■ Measurement criteria for residential real

estate – hedonic approaches ■ Qualitative issues, competition, style and

marketing

Case Study: Residential price trends in South Africa – comparative analysis

Day Two

Discounted Cash Flow For Real Estate Investments

Net Operating Income (NOI) ■ Gross and net income ■ Differences in calculating NOI ■ Overall capitalisation rate ■ Capital expenditure issues ■ Differences between property types ■ Approaches to the cap rate

Case Study: The band of investment approach

Projecting Cash flows ■ The dynamic behaviour of the 4-Q model: sta-

bility versus oscillations ■ Real estate pricing behavior: backward or for-

ward looking? ■ Forecasting markets: univariate analysis, vec-

tor auto regressions, structured models. ■ Forecasting examples ■ The definition and evaluation of “risk”

Case Study: Forecasting techniques

Creating And Using A Detailed Discounted Cash Flow (DCF) Model ■ Debt service and pre-tax cash flow ■ The sinking fund ■ Lease variations ■ Differences between sectors ■ Estimating resale value ■ Terminal capitalisation rates

Exercises: Delegates will use a number of real world examples to create and use spreadsheets for DCF valuation

Real Estate Valuation and the cost of capital ■ What is the significance of the cost of capital? ■ Differentiation between debt and equity ■ Hybrid products ■ The pecking order theory of cost of capital ■ Market derived cost of capital

Case Study: estimating the cost of capital for a real estate company

Land Prices ■ Should land prices be calculated separately? ■ How cyclical are land prices? ■ Modelling land prices ■ Empirical evidence on land prices ■ Forecasting land prices ■ Land price issues in South Africa ■

Case Study: Data availability on land prices






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The Cost Approach ■ Type of costs ■ Methods of evaluating costs ■ Sources of cost estimation ■ Incurable and curable depreciation ■ Market extraction method

Exercises: Delegates will use spreadsheet models to calculate a range of cost estimates for individual properties

The Sales Comparison Approach ■ Value, worth and price ■ Sources of comparable data ■ Identifying points of comparison and differ-

ence ■ Sales comparison approach example

Exercises: Using the sales comparison approach in practice

Highest And Best Use Approach ■ Definitions of HBU ■ Site value ■ Improved value ■ Calculating HBU

Case Study: Business Plan for a major project analysed

Leasing Analysis ■ Introduction to leases

Exercises: Stop calculations, lease valuation and feasibility rents

■ Analysing comparables ■ Analysing rental prospects

Exercises: Depreciation, net operating income and yield calculations

■ Securing tenants in relation to valuation and finance

■ Quality control and finance ■ Forecasting and limiting operating costs ■ Leases in Africa – issues, the law and values

Day FourIntroduction To Real Options ■ How to calculate real option value ■ Comparing the Black-Scholes and Binominal

Expansion model ■ Real world examples ■ Problems with real option calculation ■ Application to distressed firms’ equity and

other financial

■ Applications

Exercise: Delegates will study a range of real option calculations using customised spreadsheet models

■ Does property possess real options? ■ Examples of possible real estate real options ■ Call Option approach to land value ■ Samuelson-McKean approach ■ Difficulties of measurement ■ Potential benefits

Exercise: Delegates will value a potential development on the basis of conventional DCF and real option analysis

Valuation In Practice ■ How is valuation practiced by chartered sur-

veyors? ■ What are the key elements of the RICS valua-

tion guidelines? ■ What is the evidence on valuation practice in

COUNTRY? ■ What to look for in a valuation report ■ What are the differences between countries?

Case studies: Examples of real estate valuation reports (RICS and others)

Course Conclusion





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Real Estate Valuation - Hong Kong


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Course Overview

This course covers the methods, concepts and application of real estate valuation. At this course, you will learn to value most typical forms of real estate using a variety of techniques and methods, in the same way as a chartered surveyor. The focus is on properties and market conditions in Hong Kong, but with plenty of international examples, including land, properties with development potential, and different classes of property such as offices, retail, hotels, and warehouses as well as residential property valuation.


Day 1



ment




Case Study: Pension fund and private equity investment in ASPAC property



■ Comparison with corporate finance valua-

tion ■ Reporting according to IFRS standards ■ Types of valuation approach ■ Important aspects of the RICS Valuation















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Group discussion: Is valuation in Hong Kong adhering to best international practice?




marketing

Case Study: Residential price trends in Hong Kong – comparative analysis

Day Two

Discounted Cash Flow For Real Estate Investments

Net Operating Income (NOI) ■ Gross and net income ■ Differences in calculating NOI ■ Overall capitalisation rate ■ Capital expenditure issues ■ Differences between property types ■ Approaches to the cap rate











Land Prices ■ Should land prices be calculated separately? ■ How cyclical are land prices? ■ Modelling land prices ■ Empirical evidence on land prices ■ Forecasting land prices ■ Land price issues in Hong Kong







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■ Quality control and finance ■ Forecasting and limiting operating costs ■ Leases in Hong Kong – issues, the law and

values



other financial ■ Applications









Course Conclusion





Course Content



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Real Estate Valuation - UAE


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Course Overview

This course covers the methods, concepts and application of real estate valuation. At this course, you will learn to value most typical forms of real estate using a variety of techniques and methods, in the same way as a chartered surveyor. The focus is on properties and market conditions in UAE, but with plenty of international examples, including land, properties with development potential, and different classes of property such as offices, retail, hotels, and warehouses as well as residential property valuation.


Day 1



ment




Case Study: Pension fund and private equity investment in Middle Eastern property



■ Comparison with corporate finance valuation ■ Reporting according to IFRS standards ■ Types of valuation approach ■ Important aspects of the RICS Valuation















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Group discussion: Is valuation in UAE adhering to best international practice?




marketing

Case Study: Residential price trends in UAE – comparative analysis

Day Two

Discounted Cash Flow For Real Estate InvestmentsNet Operating Income (NOI)

■ Gross and net income ■ Differences in calculating NOI ■ Overall capitalisation rate ■ Capital expenditure issues ■ Differences between property types ■ Approaches to the cap rate











Land Prices ■ Should land prices be calculated separately? ■ How cyclical are land prices? ■ Modelling land prices ■ Empirical evidence on land prices ■ Forecasting land prices ■ Land price issues in UAE







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Course Content


Real Estate Valuation - UAEContinued...

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Course Content













■ Quality control and finance ■ Forecasting and limiting operating costs ■ Leases in Middle East – issues, the law and

values



other financial ■ Applications









Course Conclusion




The specialist in highly technical, market-driven banking and corporate finance training
