Upon completion of this program, participants will be able to:

• Describe the full lifecycle of a securities and derivatives trade, from execution to settlement.
• Explain the role of the Central Counterparty (CCP) in mitigating counterparty credit risk through **novation**.
• Analyze the mechanics of **margin** and **collateral management** in a CCP environment (initial, variation).
• Understand the legal and operational implementation of **Delivery-versus-Payment (DvP)** and its risk reduction.
• Evaluate the adequacy of a CCP's default fund and the loss allocation waterfall.
• Interpret and apply the **CPMI-IOSCO PFMIs** specific to CCPs and CSDs.
• Assess the risks and opportunities of using Distributed Ledger Technology (DLT) for securities settlement.
• Formulate a comprehensive plan for managing liquidity and operational risk in a settlement system.

• Clearing House and FMI Risk Management and Operations Staff
• Commercial Bank Securities Operations and Treasury Professionals
• Regulators and Supervisors of Securities Markets
• Derivatives Traders and Collateral Management Teams
• Legal and Compliance Officers for Capital Markets
• Internal Auditors specializing in Post-Trade Infrastructure

CCP Default Waterfall simulation, Margin calculation workshops, Case studies on historical default events, Group project on PFMIs assessment for a CSD, Technical deep dives into DvP mechanics, Policy debates on DLT/Atomic settlement.

Unit 1: Post-Trade Infrastructure and Risk Reduction

• Overview of the key post-trade functions: clearing, settlement, and custody.
• The role and operational flow of a Central Securities Depository (CSD).
• The process of Delivery-versus-Payment (**DvP**) and its ability to eliminate principal risk.
• Understanding trade repositories and their role in risk aggregation.

• The core function of the CCP: acting as buyer to every seller and seller to every buyer (**novation**).
• How a CCP achieves multilateral netting and reduces overall exposure.
• The legal framework for the enforceability of novation and close-out netting.
• Systemic importance of CCPs and the concept of "too central to fail."

Unit 2: CCP Risk Management: Margin and Default

• Types of margin: initial margin (IM) for potential future exposure and variation margin (VM) for mark-to-market.
• Methodologies for margin calculation (e.g., VaR, historical simulation, standardized approaches).
• The role of collateral management: eligibility, valuation, haircuts, and segregation.
• Margin procyclicality and mitigating its impact on market liquidity.

• The defined steps in a CCP's loss allocation scheme (the "Default Waterfall").
• The function and funding of the CCP's Default Fund.
• Procedures for managing a participant default (e.g., porting, auction, tear-up).
• Stress testing the CCP's financial resources against the **Cover 2** requirement.

Unit 3: Settlement Systems and Technology

• The role of the CSD in book-entry transfer and legal ownership records.
• The concept of "good funds" and the use of central bank money for settlement.
• Addressing settlement failures (buy-ins, penalties) and their operational impact.
• The link between CSDs and Real-Time Gross Settlement (RTGS) systems.

• Potential for Distributed Ledger Technology (DLT) to eliminate the need for separate clearing/settlement systems.
• Analysis of DLT proofs-of-concept for atomic DvP settlement.
• Regulatory challenges of legal ownership and finality on a distributed ledger.
• Cyber and operational resilience for DLT-based post-trade systems.

Unit 4: Regulatory Oversight and Governance

• In-depth review of the PFMIs specific to CCPs (e.g., risk management, default procedures).
• Regulatory requirements for CCP governance, disclosure, and transparency.
• The role of the central bank/regulator in overseeing the CCP's RRP.
• Cross-border challenges and regulatory cooperation for global CCPs.