The Securities Trade Life Cycle

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Have you wondered what happens after a securities transaction is executed? The life cycle involves all the business, operational and technological activities involved in a securities trade from execution through to settlement. This course offers insight into the critical functional processes, referred to as the workflow of a trade. We break down the life cycle into three functional activity groups from Pre-trade to At-trade and Post-trade functionalities. The course will demonstrate how the entire process works and demystify the complexities of the chain of events that occur.

Key Learning Objectives

• Understand how trades are executed on exchanges and OTC markets
• Discuss electronification in securities markets
• Explore the transaction flow from trade execution through to settlement
• Recognise the importance of risk management provided by clearing houses
• Identify the operational risks in securities trading
• Discuss post trade responsibilities and regulatory obligations
• Analyse securities transaction costs and how to measure them

A full day course for those who are new to the investment industry or need to build their understanding of the securities value chain from trade execution to trade settlement.

• New entrants
• Client services and sales and marketing
• Finance and accounting
• HR and learning and development
• Investment professionals, investment administration and operations
• IT and software developers
• Risk management, legal, audit and compliance

09:30     The pre-trade phase – Trading and the environment

• The genesis of a trade and idea generation
• Ways to execute an order and how to execute a trade
• Execution strategy considerations – positioning, horizons etc.
• Pre-trade considerations and checks
• Legal and compliance issues – Know Your Customer (KYC) and product suitability
• Credit approval, risk limits and the ability to book the trade

10:45     Coffee break

11.00     The At trade phase – Trade venues and trade management

• The different trading mechanisms – exchange traded vs. over the counter (OTC)
• MiFID II market structure – What is a multilateral trading venue?
  • Who uses them? What functions do they perform?
  • Regulated Markets (RM), Multilateral Trading Facility (MTF) and Organised Trading Facility (OTF)
• Market liquidity and ‘Dark Pools’
  • What they are and how they are used
• Electronification in the marketplace – Direct Electronic Access (DEA) – a closer look
  • How it works and why it is needed
  • Direct Market Access (DMA) vs. Smart Order Routing – what   is the difference
• Overview of algorithmic trading
  • Why use algorithmic trading?
  • Overview of the different algorithmic trading strategies

12:30     Lunch

13:30     The Post trade phase – Settlement and the ‘Straight Through Process’

• The Straight-Through-Process
  • Overview of the post-trade life cycle – step by step guide
• Static data, trade capture and processing
  • What is static data and its primary functions?
• Trade confirmation, matching and settlement
  • The trade to settlement timeline – settlement instructions and content
  • Why do we match instructions? Why securities may fail?
  • Delivery vs. payment (DVP) and free of payment (FOP)
• Central clearing
  • The role of the clearing house
  • Portfolio compression – reducing operational risk and managing counterparty risk
  • The netting process and how it works
• Corporate action events overview

15:00   Coffee Break

15:15   The Post trade phase – Transaction Cost Analysis (TCA)

• Trade reporting
  • Trade vs. transaction reporting – what the difference?
  • Who needs to report what, when and where?
• What are transaction costs?
  • Calculating transaction costs – explicit and implicit
  • The sequence of events from placing the order to trade to getting the net return
  • Where does “best execution” fit in?
• The three key areas of a trading strategy that influence transaction costs
  • Turnover, liquidity and execution
• How to measure transaction costs – the estimation conundrum and how to estimate the implicit component
  • Implementation shortfall, bid/offer spread and slippage
  • FCA's approach to calculating slippage costs
  • How trades are benchmarked to Arrival Price, Sweep-To-Fill, VWAP and TWAP

16:30     Q&A and course conclusion

Russell Hammerson

Russell Hammerson is an experienced banker working with structured products and exotic options over 15 years.

Russell started his career in the fixed income trading division at Chase Manhattan in 1986. After having graduated from the Chase nine-month advanced financial risk analysis programme, he was seconded to the Chase insurance banking division for a year. Taking his insurance expertise with him, he later moved to Citibank to work in the financial engineering division, structuring fixed income and equity products for institutional investors.

From Citibank, Russell moved to Bear Stearns to help set up the newly established equity derivatives group as associate director responsible for marketing and structuring of European products prior to becoming head of structured products at Commerzbank.

Before moving into the technical training arena, Russell ran the structured product group at Banque Nationale de Paris followed by Bankgesellschaft Berlin, London, in a similar role as head of engineered products and international new issues and director of the London Management Committee.

Russell has been training all areas of capital markets since 2001. At BG Consulting (now trading as ZISHI Cornerstone), he specialises in structured products, equity and credit derivatives and exotic options.

IA Member £645.00 +VAT
Non-Member £795.00 +VAT

Pay using a credit card online, or if you wish to be invoiced please email your full details to: Training@theia.org

PLEASE NOTE: Full payment for the course must be made prior to the course commencement date.

• Any cancellation must be made in writing.
• For all cancellation received 15-30 days prior to the course start date, 50% of the course fee is still payable.
• No refund is given for a cancellation made 14 days or less prior to the commencement of a course.
• Transferring from one course to another is treated as a cancellation.
• You can substitute one delegate for another at no additional cost. In this instance, please give two business days’ notice.

Hybrid Training Courses:
We will continue to monitor and follow government guidance regarding coronavirus (Covid-19) to ensure the safety of our team and our members. Please be advised some training courses could change from hybrid delivery (being held in-person and virtually) to solely virtual delivery, should government guidance require.

There are a limited number of in-person spaces available on this course and