November 20, 2019

2019 Agenda

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CMD Ops 2019 Agenda

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November 20, 2019

8:30 AM - 8:40 AM

Chairperson’s Welcome & Opening Remarks

8:40 AM - 9:25 AM

The Right Determination

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Buy-side firms and others are trying to determine whether they fall into the Phase 5 or the recent Phase 6 grouping of the UMR rules and deadlines. If they are in scope, they will have to master the collateral and IM management compliance for swaps, FX options, non-deliverable forwards (NDFs), physical FX forwards, swaptions and hedging trades. To get there, firms may need a deeper dive into the AANA calculation process and ways to improve data management and data quality. They will also need an exploration of jurisdictional nuances, launch an implementation plan and get internal groups aligned. Overall, firms will need to sharpen their project management skills.

This session will explore several areas of concern:

  • How should firms prudently adjust their strategies given that they may have new deadlines and more time to achieve them?
  • What should firms be doing if they know that their clients are in scope? Will they have to do the AANA calculations for their clients?
  • What are some best practices for supplying the right data to affected clients and counterparties?
  • What are the challenges involved in aggregating the data that needs to be collected by the firm?
  • How should the firm and its internal groups effectively set and then review its goals to meet the UMR specifications?

Moderator:
Scott Linden, Collateral Management Expert and Senior Consultant 

Panelists:
Diana Shapiro, NAM Head of Collateral Services, Citi
Kashyap Sheth, Director, Derivatives Data and Valuation Services, IHS Markit

9:25 AM - 10:10 AM

The Nuts & Bolts of UMR Compliance

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Firms are making many internal and external choices about the collateral and custody aspects of UMR compliance beyond using ISDA’s Standard Initial Margin Model (SIMM). Firms need to find in-scope transactions, manage segregated accounts, revamp Credit Support Annexes (CSAs) and make certain IM calculations include time zones, settlement requirements, and workflows. Firms need to look externally starting with counterparties and their in-scope statuses. They will have to negotiate with custodians on collateral operational terms and systems testing, tackle two-way initial margining, choose the third party or the tri-party approach, make connectivity choices and rethink dispute management. Firms will need to explore the collateral types allowed via U.S. regulators, including the difficulties with posting cash as IM collateral. They may face dealers requiring symmetric CSAs. While extensive testing is a given, there may be unintended consequences such as firms miscalculating AANA and thinking they are not in scope. Additionally, asset managers using unreliable information from clients may fail to implement appropriate documentation. Failing to meet UMR requirements may endanger key trading relationships and lead to liquidity problems.
This panel will help firms deal with the practical impacts of UMR stipulations:

  • How can firms best negotiate IM terms and better navigate the documentation process that governs IM operations?
  • What are the differences between using a tri-party agent and a third-party provider for collateral segregation? What are their impacts on collateral/IM?
  • What are the connectivity and books-and-records considerations for tri-party arrangements?
  • What should a firm consider when creating dispute management processes?
  • How much of an infrastructure overhaul will the new margining model cause?
  • What are some ways that firms can avoid soaring costs caused by UMR?
  • What can firms do to prevent Phases 4 and 5 from harming internal workflows and Ops performance?
  • What should firms do if they have instruments that fall between the regulatory cracks?

Moderator:
Audrey Costable Blater, Senior Research Analyst, Aite Group

Panelists:
John Pucciarelli, Director of Strategic Initiatives, AcadiaSoft
Menashe Shua, Global Head Ready To Margin, Goldman Sachs
Karl Wyborn, Global Head of Business Development at CloudMargin

 

10:10 AM - 10:30 AM

Networking Break with Exhibitors

10:30 AM - 11:00 AM

Welcome to the Collateral Network!

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TriOptima's Mary Harris, Business Manager in North America for triResolve, will share her insights about what's in a network, the importance of interoperability and connectivity in the collateral space and the latest updates with collateral market infrastructure tools.

11:00 AM - 11:45 AM

Crossing the Threshold to Compliance

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A new world of collateral and margin management is being ushered in via the Uncleared Margin Rules (UMR). But navigating and then implementing the new rules will be a challenge for most industry participants under the scope of UMR either directly or indirectly. The legal side of the business has to translate the legalese for the many groups across the trading enterprise. But it is sometimes challenging to get all interested parties to communicate, but it’s the first step toward crafting clear strategies. It’s also a major effort to manage disputes with clients and counterparties over the actual margin requirements. This effort will mean that there will have to be closer interactions between the back and the front offices, and closer work with stakeholders across the legal, credit, and operations staffs to achieve effective resolutions.

This panel will provide an overview for the major issues of UMR compliance:

  • What steps should a firm take to make certain that all affected internal groups and external participants know that they are aware that they are in scope for regulation, especially if deadlines change?
  • What are some emerging best practices for internally setting up contracts, documentation, reporting and more related to UMR implementation?
  • How should firms handle custodians that may not yet be up to speed?
  • What are some effective ways to negotiate with dealers and other third parties?

Moderator:
David Stryker, Principal, Markets, Greenwich Associates

Panelists:
Tara McCloskey, Head of Derivatives Middle Office, MetLife
Kevin T. Stein, Esq., Senior Legal and Compliance Counsel, BNP Paribas Asset Management

11:45 AM - 12:30 PM

More Margin Calls & Other Burdens

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As the industry adjusts to the new dynamics of UMR, there is likely to be a significant increase in the number of margin calls, inquiries and transactions that internal staff will have to handle and reconcile. During the transition, firms will have to process legacy trades and existing trades, review their fund management strategies, investigate bilateral IM, and implement quality assurance for IM calls. There will also be new demands put upon reconciliation systems and exception management workflows to clarify IM actions among participants. Firms will also have to make certain that their Criff files of standardized risk data do not cause any problems with ISDA’s Standard Initial Margin Model (SIMM) calculations.
This panel will focus on how staff members will cope with the increased workloads and new workflows:

  • What are some best practices for managing the additional margining that will come with UMR compliance?
  • How should firms prepare for the surge in reconciliations that are likely to occur?
  • How should buy-side firms prepare for sell-side dealers that will be posting margin to them?
  • Will the extra efforts require multiple project managers to facilitate the transition?
  • What are the best strategies for adapting to new workflows?
  • Do consultants and outsourcers have a role to play in this scenario?
  • What are the best ways to handle two-way initial margining situations?
  • What types of IT solutions are available to ease these new burdens?
  • What should firms keep in mind as they look for IT solutions?

Moderator:
Audrey Costable BlaterSenior Research Analyst, Aite Group

Panelists:

Eric Bolisay, Head of Derivatives Strategic Operations, T. Rowe Price
Jason Ang, Program Manager, SmartStream Technologies
Allen Lewis, MD, Custodian, Collateral and Investment Management, BNY Mellon

12:30 PM - 1:30 PM

Lunch

1:30 PM - 2:15 PM

Are Providers In Scope for Your Needs?

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Financial services firms have been moving quickly to meet UMR deadlines. As they overhaul systems and workflows, they are acutely aware of the fires they need to put out and their long-term needs. They have been compiling lists of their must-haves and going to market to find providers to help them meet their requirements. But finding the right providers is not easy even though there is a greater variety of them, and there are multiple approaches to solving the same problem. As the age of UMR emerges, the market offerings include platform-wide solutions, best-of-breed approaches, niche offerings, outsourced services, utilities, and third-party software vendors that offer regulatory IM calculations, reconciliation and margin workflows.

This panel will cover ways to help firms sort out the right vendor and the right approach:

  • What is the best strategy for a firm to find a vendor match for its needs?
  • How does a firm determine what its needs are?
  • What groups within a firm need to participate in the provider search?
  • What, if any, of the emerging disruptive technologies might help firms achieve their UMR compliance goals?
  • What role, if any, should consultants play in helping firms develop strategies to find providers?
  • What are the outsourcing and near-sourcing options that a firm should consider?
  • What kinds of data security protections are third-party software and services vendors providing to clients?

Moderator:
David Stryker, Principal, Markets, Greenwich Associates

Panelists:
Liam Huxley, CEO & Founder, Cassini Systems
Kevin Urlik, FRM, Vice President, Fintech Product Strategy, Brown Brothers Harriman
Sudhir Jain, Director, OTC Derivatives, NFA

 

 

2:15 PM - 3:00 PM

New IT for Middleware, Settlement & Clearing

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While business and risk mitigation issues are being finalized, IT and operations teams have critical middleware, clearing and settlement infrastructure matters to resolve and refine in time for the UMR deadlines. They have to oversee the new, tighter T+1 settlement requirement that will become more complex given that firms work in multiple time zones. Middleware and reconciliation providers will need to offer direction to help firms and their counterparties either build their own connections or use expanded products to ease interoperability with new IM systems.

This panel will pinpoint the key IT infrastructure issues that are tied to the UMR deadlines:

  • Is the IT mandate to create data and calculation capabilities in conflict with the need to clarify clearing, settlement and middleware problems?
  • What are some strategies that can help firms and their providers streamline the clearing and settlement maze?
  • What are some overhauls that need to happen to facilitate T+1?
  • What IT innovations will help firms best manage increases in reconciliation volume?
  • Will UMR-related reconciliation have to be intraday?
  • What can firms do to make certain that custodians and middleware providers are fully supporting counterparty onboarding and connectivity needs?
  • Do all providers need to participate in systems testing efforts?

Moderator:
Eugene Grygo, Chief Content Officer, FTF News

Panelists:
Marcus Cree FRM, General Manager Americas, OpenGamma      Mark Persiani, Director, Collateral Management, Blackrock

 

 

3:00 PM - 3:30 PM

Networking Break with Exhibitors

3:30 PM - 4:15 PM

When SMAs Are In Scope

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When it comes to UMR compliance, separately managed accounts (SMAs) that are engaged in derivatives trading present a new set of challenges for financial services firms. Investment firms that are catering to clients with SMAs will have to determine whether the client and its accounts are in scope for the UMR regime. In addition, firms will have to determine the appropriate regulatory jurisdiction for their clients’ SMAs, and then clarify compliance requirements for the specific jurisdiction. This is likely to be a complicated task as there are variations across jurisdictions and cross-jurisdictional considerations. For a particular client, the margin regulation will likely apply to all the investment managers that the client uses.
This panel will focus on the SMA aspects of UMR compliance:

  • When does an investment firm need to disclose to the client what it’s AANA calculation is and then ask the client to provide its aggregate AANA?
  • What are the first steps that a firm needs to take if a client with SMAs is in scope for Phase 5?
  • For the legal and operational considerations, what are the UMR requirements for initial margin thresholds and minimum transfer amounts as they apply to in-scope legal entities?
  • A new legal “account control” agreement may be required to support fully segregated initial margin accounts. How likely is it that an investment firm will need new account control agreements, which are a challenge for clients that may not have had to use one before?
  • Will investment firms have to support tri-party and third-party custody accounts for their clients who are likely to use their current custody relationships? How will this impact a firm’s operational model?

Moderator:

Allen Lewis, MD, Custodian, Collateral and Investment Management, BNY Mellon

Panelists:

Jeffrey Himstreet, Vice President & Corporate Counsel, PGIM Fixed Income
Eric Bolisay, Head of Derivatives Strategic Operations, T. Rowe Price

4:15 PM - 4:45 PM

Reality Check on Your Enterprise-Wide Overhauls

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The world of collateral and margin management is undergoing unprecedented change as the UMR deadlines overhaul derivatives processing and related operations. At the same time, a short-term lending crisis is jolting the repo market just as replacements are being sought for the scandal-plagued London Interbank Offered Rate (Libor). Simultaneously, markets are readjusting to the ongoing reforms of the European Market Infrastructure Reform (EMIR) legislation. Amid the shifts, Ops staffs are exploring advances in IT from blockchain to robot process automation (RPA) to rid themselves of end error-prone manual systems. As Ops managers strive for enterprise-wide transformations, they also must deliver greater efficiency on many fronts, including the back-office and the search for liquidity.

This panel will focus on helping firms understand where they are in their comprehensive strategies for margining and collateral systems. For 2020 and beyond, firms will have to optimize these formidable overhauls while leveraging resources for market advantage.

The panel will explore:   

  • How close are firms to achieving enterprise-wide strategies to meet margining obligations and to better manage collateral?
  • What more can be done to advance enterprise-wide change for these areas?
  • What is the best strategy for prioritizing projects that have overlapping or conflicting deadlines?
  • What other internal groups beyond Ops could benefit from a focused change management effort for collateral and margining?
  • Who within the firm should drive the enterprise-wide change management effort and see it all the way through?

Panelists:

Nihal Patel, Special Counsel, Cadwalader, Wickersham & Taft LLP

Ted Leveroni, Senior Principle, BNY Mellon Markets

 

4:45 PM - 5:00 PM

Chairperson’s Closing Remarks

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The conference was very informative and relevant for the current state of derivative regulations.  

- Michael Daley, Director of Fixed Income Operations, Loomis Sayles (DerivOps Attendee)

You always have insightful subject matter experts on your panels.  

- David Gallagher, VP, Collateral Management, Lombard Risk (DerivOps Attendee)

The conference provides relevant industry insights from practitioners for practitioners.  

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The event is essential for anyone who has a portfolio of derivatives or supports clients who have exposure to derivatives.  

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Excellent.  

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- Shannon Pacheco, Head of Operations, MEAG New York Corporation (DerivOps Attendee)

The speakers and topics covered were timely and very relevant to the current market environment.  

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The conference gave a very informative overview of the challenges faced by the industry currently.  It targeted at specific initiatives and regulations which are critical to derivative operations.  

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This was one of the best DerivOps conferences that has been put together.  

- Kathryn Landuyt, Securities Analyst, OTC Derivatives, PPM America (DerivOps Attendee)

The mix of presentations and panel discussions was great. Thank you!  

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Great experience. Thank you!  

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The speakers were great and the program was organized.  

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Great forum. Knowledgeable and well-versed speakers. Would love to attend future events.  

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The Forum format provides a great networking opportunity since there is a very focused topic and group of delegates.  

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FTF has provided a very thoughtful and relevant discussion of the changes currently impacting the industry.  

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Very helpful and insightful conference. Thank you.  

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Well organized and put-together. Impressive speakers and panelists.  

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Excellent forum. Very much enjoyed the more informal talks as it engaged the audience more.  

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