RISK MANAGEMENT OF INVESTMENT & TREASURY PORTFOLIOS SIMULATION TRAINING@THE DEALING ROOM

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1 RISK MANAGEMENT OF INVESTMENT & TREASURY PORTFOLIOS SIMULATION DEALING ROOM Leading Excellence in Banking & Finance

2 OUR PARTNERS CapitalWave provides truly dynamic educational simulation training platforms. CapitalWave s instructors, consultants and management team have a wealth of financial knowledge and experience and have designed, developed and delivered training programmes globally to many of these leading capital market banks and financial institutions Amplify Trading was founded in 2009 and has three core operations of business: 1. Proprietary trading across all major asset classes 2. Professional development using trading technology for live & simulation-based training 3. Market analysis and research for clients Part of Henley Business School, the practical application of finance theory is one of the ICMA Centre s key advantages. This integration of theory with practice is achieved through the use of the Centre s three state-of-the-art dealing rooms. With over 100 terminals, All equipped by Thomson Reuters, the terminals run the latest industry simulation software as well as the Centre s own simulation software platforms; ICTrader and StockTrak. Amplify Trading delivers training to the world s leading global banks using its proprietary trading and simulation platforms. The BIBF Dealing Room has a Live link to Amplify Trading s dealing room in London. Participants will be exposed to the Live trading activity of Amplify s trading team. The CISI is the largest and most widely respected professional body for those who work in the securities and investment industry in the UK and in a growing number of major financial centres around the world. Formed in 1992 by London Stock Exchange practitioners, we now have more than 40,000 members in 110 countries. Thomson Reuters is the world s leading source of intelligent information for businesses and professionals, combining industry expertise with innovative technology to deliver critical information to leading decision makers in the financial and risk, legal, tax and accounting, intellectual property and science and media markets. SimArch was founded in 1999 and has developed simulations related to commercial banking businesses. The simulations model all key components of a commercial bank and its operating and regulatory environment. SimArch has conducted over 450 workshops in more than 40 countries. SELECTIVE CLIENTS OF BIBF S PARTNERS

3 The BIBF Dealing Room is a state of the art facility, the first of its kind in the MENA region, which powers technologyenabled learning by doing. The facility has over 20 trading stations, fully-equipped multimedia and market tools such as Bloomberg and Thomson Reuters Eikon. In order to provide cutting-edge training expertise and technology, BIBF has partnered with specialist training and technology providers in the UK and US. Our partners have a successful track record of providing training to bulgebracket global banks, including JPMorgan, Citigroup, HSBC, Morgan Stanley, Barclays Capital & Deutsche Bank. A comprehensive range of courses are offered, covering subjects of interest to professionals in the financial sector across Treasury, Investments, Capital Markets and Risk Management.

4 SIMULATION TRAINING IN RISK DEALING ROOM

5 RISK MANAGEMENT OF INVESTMENT & TREASURY PORTFOLIOS This intensive, 3-day course explores a large number of trading and portfolio analytics at different stages. You will gain a deeper understanding of how these analytics relate to risk. You will also create an environment where this function is perceived as a value added proposition, increasing the strength and profitability of the organisation. PRE-REQUISITE COURSES This is an Intermediate level course. Those interested in attending should have a foundational understanding of Risk Management principles and concepts. COURSE ACTIVITIES REAL MARKET NEWS TRADING GAME (RNTS) Each day begins with a class discussion of the current news stories; this reinforces the need for delegates to become news aware. Delegates are then broken into small groups that need to take trading positions within stated position limits across 6 markets using real market prices. The positions are marked-to-market and groups are able to change their positions during each analysis session. A leader-board ranks the team s performances and the winning team is one with the highest risk-adjusted profit at the end of the programme. TRADING SIMULATIONS Delegates take part in trading simulations using the Risk Management Simulator (RMS) playing the roles of both traders and risk managers. These fast paced market simulations allow delegates to experience the high pressure of trading and managing risk in volatile markets in a tightly controlled environment. WHAT YOU WILL LEARN Learn about the most effective strategies for managing risk in Investment & Treasury portfolios Understand specific risks in financial institutions and their impact on operational efficiency Explore risk in the context of Basel II, III and beyond Assess the risk culture and appetite Placing different types of risk within the broader context of enterprise risk management and corporate governance structures Understand the challenges of contingency planning for Black Swan events WHO SHOULD ATTEND From Commercial Banks, Central Banks, Investment Banks, Asset Management firms representatives, Pension Funds, Hedge Funds, Leasing companies, Insurance companies, Fund Managers, other financial institutions Financial Officers Risk Officers Internal Auditors Operational Risk Managers Investment Analysts Portfolio Managers Staff with roles and responsibilities in risk management departments, businesses and central departments Each delegate needs to manage their own positions, make prices, and react to market news while trying to manage risk and be profitable in an exciting and competitive environment. Delegates will take turns in playing risk management and trading roles to provide valuable perspective and bridge the gap between functions across financial institutions.

6 COURSE OUTLINE DAY 1: RISK MANAGEMENT IN FINANCIAL INSTITUTIONS On the first day delegates establish a common foundation of the principles and concepts of Risk Management. Delegates are challenged with applying what they learned to simulations exposing them to shorter and longer term market risks. Module 1: Risk Management in Financial Institutions Risk in Financial Services Why does Risk Matter Risk Mitigation Approaches Taxonomy of Financial Institutions, Services and Risk Module 2: Risks in Providing Financial Services Learning practical means to identify sources of Interest Rate, Foreign Exchange, Credit and Equity Risk What causes Industry concentration Risk Identifying Counterparty Risk Impacts of Legal Risk 7Real News Trading Game Module 3: Benchmarking & Investment Returns Understanding Correlation, Correlation Impacts and volatility Investment timeframes blurring trading and investing Understanding Risk as it relates to Investment & Treasury Management The Importance of Benchmarking Risk adjusted returns and the Sharpe ratio Additional Risk Measures Module 4: Trading and Investing Strategies Equity market Indexes - Usage and Construction Equity Trading News and Events Volume Weighted Average Price (VWAP) Pricing Managing downside risks and protection Use of Futures and Options for hedging purposes Trading Approaches Long/short strategies and stock selection Technical Trading Methods DAY 2: TREASURY AND INVESTMENT MANAGEMENT OVERVIEW On the second day delegates apply their practical experiences from Day 1 to identify, analyse, and use more complex strategies and products. Delegates are challenged in the simulations with understanding and practicing different risk management methods using structured and alternative instruments. Module 1: Structured Products An overview of structured products and their building blocks Use of structured products in hedging strategies The attraction of principal protection strategies Enhanced return strategies Benefits and Risks of Structured Products Credit linked products 7Creating Structured Products Module 2: Alternative Strategies Hedge Funds & Private Equity What are hedge funds and private equity funds? Fund of funds and portfolio diversification The impact of the changing political landscape Module 3: Measuring Performance Geometric and arithmetic returns Path dependency in returns Module 4: Returns & Risk Measuring the risk premium Holding period and the NAV Correlations and covariance, and macroeconomic considerations Value at Risk (VaR) Financial Markets Crises and the fat tails Systematic and unsystematic risk Hedge Fund Strategies Directional strategies: growth, macro and timing Relative value and market neutral strategies Opportunistic and event driven strategies Risk and money management

7 DAY 3: MEASURING PORTFOLIO PERFORMANCE On the final day delegates analyse their portfolio risk and performance from Days 1 and 2 using several performance measures, understanding the similarities and differences of various measurement methods. They conclude with review and discussion of the global financial crisis in the light of their newly developed competency. Module 1: Common performance Measures Practical means of measuring Sharpe ratio, Sortino ratio, Jensen s Alpha and Treynor measure Tracking error and the information ratio Measuring performance attribution Module 2: Investment Risk and Allocation Investment Classifications Investment Reactions and Economic Conditions Risk Allocation Illustrated through Case Studies Module 3: Measuring Returns and Risk Lessons from the 2007/9 Global Financial Crisis Nature of correlation Instability of correlations at times of crisis, and mitigating strategies Module 4: Regulation and Risk Management Financial Regulation USA Federal Reserve, Treasury, Sec, CFTC, FDIC Dodd-Frank and Volcker Rule Sarbanes-Oxley UK Bank of England, Financial Policy Committee European Union ECB and European Stability Mechanism (ESM) Basel II and III ECB Supervision

8 BIBF plays a vital role in the training and development of human capital in the Kingdom of Bahrain. Our commitment to excellence has strengthened our position as the top provider of quality education across all major business disciplines. We serve as a partner to numerous world-class institutions; delivering thought leadership, research and advisory, assessment and training solutions in the areas of Accounting and Finance, Academics, Executive development, Banking, Leadership and Management, Insurance, Islamic Finance and Information Technology; resulting in a complete business solution. BIBF covers a wide spectrum of subject matter, with over 300 different courses offered to the financial and corporate market; tailor-made training solutions based on organisational requirements; specialised programmes taught by leading market specialists; and professional qualifications and degree programmes in partnership with major international organisations. BIBF continues to exceed global benchmarks for many of the qualifications it offers with its affiliates. Contact Details: Tel: [email protected]