ACF Academy : : Operations and IT : : Failed Trades Management

Category: Operations and IT

The principal objectives of this one-day seminar, viewed from an operations perspective, are to:

	Identify the point at which failed trades occur within the securities trade lifecycle
	Highlight the numerous points of impact of failed trades
	Understand how failed trades are identified
	Appreciate the various causes of failed trades
	Understand how failed trades can be prevented
	Appreciate how the impact of failed trades can be minimised
	Describe measures to enforce trade settlement
	Understand procedures for recovering lost interest


	Definition: the meaning of the term 'failed trade'
	Fundamentals: impact of fails on: • ownership rights • purchase cost/sale proceeds, and • matched settlement instructions
	Impacts: highlights the various functions and business attributes that are affected by failed trades, including: • interest on cash • client relationships • corporate actions • counterparty exposure • capital adequacy (Basle II) • funding • financial statements
	Markets: explores the fact that failed trades are common in some markets, but are not tolerated in others, and the underlying reasons
	Causes: highlighting the various ways in which fails can occur, including: • unmatched instructions • insufficient stock • insufficient cash, collateral and credit line
	Identification: how failed trades are recognised, the earliest point of identification, further impact of failure to identify
	Prevention: pinpoints the trading actions and operational measures that maximise the chances of settling trades on their due date, including: • working within deadlines • resolution of non-matching instructions • securities realignment • securities borrowing • cash and collateral management
	Minimising Impact: partial settlement
	Enforcing Settlement: describes Buy-In and Sell-Out - the ultimate course of action open to buyers and sellers in order to force a counterparty to settle a trade
	Interest Claims: identifies the circumstances under which lost cash interest is (and is not) recoverable from counterparties, including cash calculations, claiming procedure and internal monitoring of unpaid claims.

NB All practical sessions are highlighted like this:
	means a Workshop or Simulation
	means a Case study