OTC Derivative Operations: Products, Collateral, EMIR
Derivatives are now a global phenomenon. Nowadays, many types of derivative products are traded and settled directly between one party and its counterparty on an Over-the-Counter (OTC) basis.

For each product, its purpose and possible outcomes must be well understood by operations and other personnel within financial institutions, so as to provide top quality servicing of clients and to avoid processing losses.

Since the Global Financial Crisis in 2008, regulators around the globe have focused very closely on regulation and risk mitigation relating to OTC derivatives.

For all of the above, it is therefore essential that those responsible for processing OTC derivative trades possess a clear understanding of how trades and collateral are processed under the new regulations, the potential exposures and, critically, what mitigating measures are necessary.

By completing the course you will:

  • Become aware of the fundamental purpose of derivatives
  • Understand the similarities & differences between exchange traded and OTC derivatives
  • Identify the processing lifecycle of a range of OTC derivative products
  • Understand the purpose of collateral in the management of OTC derivative trades
  • Appreciate each step in daily counterparty risk mitigation within the collateral process
  • Understand the reasons for the introduction of the EMIR controls
  • Appreciate how central counterparties interact with clearing members on a day-by-day basis
  • Understand how clearing members interact with non-members in a central clearing environment
  • Appreciate what causes trades to be either centrally cleared or non-centrally cleared.

Who should attend?

The course is aimed at those currently working within a particular segment of derivative operations (e.g. trade processing, collateral management), who would appreciate the ‘big-picture’ and how their role relates to this.

Due to its broad content, the course is very beneficial to those working in other areas of the markets, from Trading and Sales to Operations, Risk Management, Compliance, Legal and IT.

The course is equally applicable to professionals within institutional investment firms and banks, and to those working within central banks, central counterparties, derivative exchanges, central securities depositories, custodians and management consultants.

Details of the next seminar

2-3 December 2019

Course Trainer
The course content is divided into several topic areas, which are then broken down into multiple subtopics:

1. Fundamental Derivative Concepts
  • Definition and Purpose
  • The Derivatives Marketplace
  • Basic Derivative Types
  • Investment Appeal of Derivatives

2. OTC Derivatives – Introduction
  • Essential Principles of OTC Derivatives
  • OTC Derivative Product Types (Overview)
  • Legal Documentation – Introduction

3. OTC Derivative Products and their Operational Characteristics     
  • The Generic OTC Derivative Trade Lifecycle (Overview)
  • Trade Processing versus Collateral Processing
  • OTC Derivative Products (Interest Rate Swaps, Credit Default Swaps, Foreign Exchange Swaps, Currency Swaps)

4. Exiting an OTC Derivative Trade
  • Unwind
  • Offset
  • Novation

5. Fundamental Collateral Concepts
  • Collateral Concepts for OTC Derivatives
  • How Exposures Arise on OTC Derivatives
  • Cash Collateral for OTC Derivatives
  • Bond Collateral for OTC Derivatives
  • Bond Collateral: Deriving Haircut Percentages
  • OTC Derivatives and the Credit Support Annex

6. The OTC Derivative Collateral Lifecycle
  • Portfolio Reconciliation
  • Marking-to-Market
  • Exposure Calculation
  • Exposure Calculation Simulation
  • Making & Receiving Margin Calls
  • Holding Collateral Received
  • Reuse of Bond Collateral
  • Collateral Substitution
  • Income and Corporate Action Events

7. Regulatory Change for OTC Derivatives – Introduction
  • OTC Derivatives & the 2008 Global Financial Crisis
  • Overview of Required Regulatory Changes

8. EMIR and Centrally Cleared Trades

  • Central Clearing Primary Concepts
  • Central Counterparty Services
  • Central Clearing: Advantages & Disadvantages
  • Central Counterparty Membership & Non-Membership
  • Clearing Member Margin Requirements: Introduction
  • Default Funds, Initial Margin & Variation Margin
  • Clearing Members Offering Client Clearing Services
  • The Clearing Obligation
  • Treatment of Legacy Trades
  • Central Counterparties and Interoperability
  • Central Clearing & the OTC Derivative Collateral Lifecycle
  • Collateral Transformation

9. EMIR and Non Centrally Cleared Trades - Overview

  • Definition of Non Centrally Cleared Trades
  • Reasons for Existence of Non Centrally Cleared Trades
  • Market Participants Exempt from the Clearing Obligation
  • Eligible Collateral
  • Initial Margin and Variation Margin Requirements
  • Mandatory Risk Mitigation Regulations
Details of next course


ICE Education

5th Floor Milton Gate
60 Chiswell Street
London EC1Y 4SA
United Kingdom

Based at ICE Education London offices: IntercontinentalExchange® (NYSE: ICE), is a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets.

2-3 December 2019

RegisterAdd to calendar

For security reasons, delegates who have not registered in advance will not be admitted to this course. Delegates will be required to provide photo identification on arrival, to ensure entry.


£1,650 for members and £1,950 for non-members.

Payment can be made by secure online credit card or by invoice.

Terms and conditions

Please click here to view our terms and conditions before registering.


Should you have any queries, please contact education@icmagroup.org

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