Fundamentals of Fails Management - In house

Fundamentals of Fails Management Training Course

Content

Failed Trades

- Overview: Introduction to failed trades, including definition, overview of impact, and linking to the trade lifecycle.

Trade Lifecycle

- Overview: The primary components of the securities trade lifecycle (to ensure all attendees have a similar understanding) highlighting the point at which fails occur.

Impact of Failed Trades

The positive & negative impact. The functions and business attributes that are affected by failed trades, including:

• Interest on cash
• Client relationships
• Corporate Actions
• Counterparty
• Exposure
• Capital adequacy (Basle II)
• Financial statements

Identifying Failed Trades

Methods by which fails are highlighted to an organisation by its custodians and central securities depositories.

Causes of Failed Trades

Identifies the various causes of fails, including

• non-matching settlement instructions
• seller having insufficient securities
• securities in different location

Prevention of Failed Trades

Pinpoints the operation & trading actions that maximise possibility of settling trades on their due date including:

• working within deadlines
• resolution of non matching instructions
• securities realignment
• securities borrowing
• cash and collateral management Additionally covers the advantages/disadvantages of partial settlement, free of payment settlement and use of statistics to minimise potential fails.

Enforcing Trade Settlement

Describes the ultimate course of action open to buyers and sellers inn 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.