MiFID II - Derivatives (EN)

This module is part of the MiFID II training programme and focuses on the main features and functioning of derivative instruments within financial markets. It provides an overview of the regulatory framework, market structures and key characteristics of derivatives in a MiFID II context. It is intended for professionals involved in investment services who require a solid understanding of derivative products and their associated risks.

At the end of this training, participants will be able to:

·       understand the main characteristics of derivative instruments

·       identify the functioning of derivatives markets (regulated and OTC)

·       recognise the main risks associated with derivatives

·       understand the role of derivatives in investment services

Based on the the ISO definition of derivatives specifying that a derivative instrument is a financial contract the value of which is “derived” from the value of underlying instruments or commodities, the content of module 5 on derivatives focuses on:

- Introduction: high level definition, history, use and players/conventions

- MIFID II & Derivatives: types of derivatives (ISO, MiFID II), Trading obligation, Trading environment (e.g., execution, market landscape – execution venues), Clearing obligation, EMIR,  Clearing, MIFID II impact on the transaction chain

- Exchanges listed derivatives: Options (e.g., types, features, functioning , value, Greeks, basic patterns,  example of P&L calculation for equities/indices/Interest rates/swaptions options), Futures (e.g., types, features, functioning – quotes/settlement/rolling/margins/basis trading, P&L calculation for Bonds/Index futures),  Commodities futures & MiFID II (e.g., Commodities regime)

- OTC Derivatives: Forwards (e.g., definitions, difference vs Futures, FX Forwards, P&L calculation FX forwards, FRAs, functioning of FRAs, P&L calculation), Swaps (e.g., definitions, functioning, types and use, P&L calculation for Interest rates swaps/FX swaps/Cross currencies swaps, Equities swaps, CDSs), Structures (e.g., types, structured products use and history)

- Risk, Performance and Documentation

- Conclusion

- Appendices: Acronyms, List of movies and documentaries

The module is fully updated taking into account all the lates updates/regulatory changes that took place in that space since inception, including changes in market infrastructures.

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.

English

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