MiFID II - Debt Instruments (FR)

This module focuses on debt instruments, exploring characteristics, primary bond markets, bond calculations, ratings, complex debt instruments, and associated risks. We'll cover market risk, credit risk, counterparty risk, costs, tax, reporting, and recent MiFID updates, including the ESG framework and MiFID III. Our experienced speakers will guide you through the content, providing in-depth knowledge of financial products under MiFID rules.

Based on the ISO definition for debt instruments specifying that a debt instrument is a financial instrument evidencing monies owed by the issuer to the holder on terms as specified, the content of this module on debt instruments focuses on:

• Main characteristics of debt instruments (based on ISO 10962)
  • Types of debt instruments - Bonds, convertible bonds, bonds with warrants attached, medium-term notes, money market instruments, structured instruments, mortgage- backed/asset-backed securities, municipal bonds
  • Attributes of debt instruments - Type of interest, guarantee, redemption method, form (bearer/registered), subordination
  • Pricing of debt instruments - Factors impacting price (e.g., ratings, yield, supply & demand), calculating the price of a debt instrument, different types of yield
  • Factors influencing the performance of a debt instrument - Spread against a benchmark (e.g., a government bond), ratings, strength of currency, market interest rates, inflation
  • Costs associated with transactions and services involving a debt instrument - Brokerage, exchange fees, transaction fees, custody fees
  • Structure of the market for debt instruments
  • Types of markets (regulated, OTC, MTF, OTF, SI) - Government bonds traded on regulated exchanges, corporate bonds traded on stock exchanges, Eurobonds traded over the counter, OTC debt instruments (e.g., collateralised debt obligations), use of MTF, OTF, SI for debt instruments
  • Primary and secondary markets - Descriptions of primary and secondary markets for Eurobonds, government bonds, corporate bonds
  • Market players - Primary market: Lead managers, syndicate members, listing agents, CSDs/ICSDs, exchanges; Secondary market: Brokers/dealers, regulated markets (e.g., exchanges), OTC, MTF, OTF, SI, paying agents, fiscal agents, CSDs/ICSDs, custodians, depositaries 

• Financial instruments as investments
  • Market practice - Primary market - On an exchange, OTC; Secondary market - On an exchange, OTC, transaction chain of securities processing; bond lending/ borrowing, repurchase agreements; CSDs/ICSDs, custody, corporate actions (e.g., coupon payments), redemptions (including early redemptions)
  • Main risks - Default risk, spread risk, settlement risk, migration risk, liquidity risk, interest rate risk, foreign exchange risk, operational risk
  • Tax aspects - Withholding tax, capital gains tax, tax reclamation
  • Market forces that impact performance - Interest rates, inflation, currency rates, rating agencies, market liquidity
  • Understanding instrument’s performance - Changes in interest rates, duration, ratings, bond indices, variable-rate bonds
  • Documentation related to the instrument - Prospectus, programme description, pricing sheet

The persons concerned by the Training Programme are all persons placed under the authority of a professional (or acting on his behalf) subject to prudential supervision by the CSSF, i.e. individuals providing investment advice (“Advisory profile”) or information (“Information profile”) on financial instruments, investment services or ancillary services to clients.

Experienced professional specialists selected on the basis of their in-depth knowledge of markets and financial products under MiFID rules I and II, and ESMA criteria.

Session delivery: French

Course material: English

Assessment and Certification: English or French

This module is part of the MiFID II Certification. For more details about this Certification, please click here.