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Comprehensive programme featuring

numerous new exercises and case studies!

Back Office
Management And
Operations
Enhance Operational Processes
And Operational Risk
Management
By attending this cutting edge course you will:
• Learn best practice in operational risk management, with a special focus on
back office management and operations
15 – 19 February 2009 • Receive an overview of issues and effective solutions in managing back office
staff, transaction volume, new products and third party suppliers
Villa Rotana Hotel • Become familiar with traditional and recent developments in operational and
Dubai, UAE operations risk management and regulatory procedures applied in a typical
back office environment with their associated control, compliance and risk
management policies
• Identify areas where productivity can first be measured and then provide a
workflow roadmap for improving control and monitoring functions
Who Should Attend? • Learn how back office operations can improve the treasury performance and
  internal funds transfer pricing system in the ALM function
Delegates attending this course should • Explore the role of back office management in increasing the effectiveness
have a basic understanding of back and profitability of clearing, settlement, custodial, trading, treasury and ALM
office management and operations. From processes
Back Office Managers and Operations • Understand the role of managing corporate actions, asset servicing, client
Managers to Middle Office Managers and services and customer relationships
Treasury Managers, this course is for • Build and maintain an effective and efficient relationship with front and middle
managers that want to learn best offices
practice in operational risk management,
• Learn operational regulatory risk requirements and measurement under Basel II
with a special focus on back office
management and operations!

Organised By: Official Regional Recruitment Partner

Tel: 971-4-3352437 Fax: 971-4-3352438 Email: register@iirme.com Web: www.iirme.com/backoffice


About Your Expert Course Leader
Dr. John W. Dalle Molle’s current specialisations are in
the areas of quantitative risk analytics, modelling and
management and quantitative financial modelling.
He has acquired extensive experience in executive
financial training in Asia Pacific, the USA, and various
European countries. His clients include several large
financial institutions and central banks. In addition
to engaging in financial training seminars, Dr. Dalle Molle has made
numerous professional presentations in global conferences and
exhibitions such as Futures And Options World (FOW) in Singapore, the
New Zealand Econometrics Group Meeting, Quantitative Methods in
Finance Conference in Sydney, and EURORISK 2001 Conference in Paris,
Dear Operations Manager, France. Dr. Dalle Molle has an interdisciplinary PhD in Management
Science/Information Systems with a focus on financial econometrics,
As our market moves forward at lightening speed, the untrained
a Masters of Mathematics (with thesis) and a Masters of Science in
eye sees constantly evolving products and services with complex,
innovative approaches unprecedented in the region. Petroleum Engineering all from the University of Texas at Austin, and
a Bachelor of Science in Chemical Engineering from the University of
What they don’t see are the back office operations that go along Iowa. Dr. Dalle Molle is in the process of completing the following two
with these new offerings. These operations grow with even more volume book for John Wiley and Sons entitled: Enterprise-wide Risk
complexity than the new product or service on offer, including the Management: Volume I – The Essentials of Risk Assessment,
management of abstract variables such as risk monitoring and Measurement, and Management at the Individual, Portfolio, and
regulatory pressure. Firmwide Levels and Volume II – A Detailed Classification of Risk
Categories, published this year.
For these reasons, the demand for IIR’s Back Office Management
and Operations has been, and will continue to be, incredibly high.

This interactive five-day course will help you to develop a


management style that helps to continuously improve quality
“Well organised programme, effective
throughout the back office while at the same time establishing learning tools and effective speaker”
efficient processes and delivering cost-effective services.
Sulayman Harith, Senior Back Officer
Nigeria LNG Ltd., Nigeria
By attending this course, you will be able to;
• Implement best practice operational risk management
• Efficiently manage back office staff, transaction volumes, new
products and third party suppliers
• Measure productivity and improve control and monitoring
functions
• Use back office operations to improve the performance of the
treasury function and the internal funds transfer pricing system
• Build and maintain effective relationships with front and middle
offices

Don’t miss this opportunity to take yourself and your team to the
next level of professional Back Office Management and Operations!

John and I look forward to meeting you in February.

Kind regards,

Forthcoming Relevant Events


Keith Parker BC2888 Essentials Of Business Process Analysis, Mapping And
Conference Manager Modelling
15 – 19 February 2009 www.iirme.com/bpamm
P.S. Take advantage of Early Bird Discount
to save US$ 500 if you book by BC2896 Management Skills For Middle Managers
6 December 2008! 22 – 26 February 2009 www.iirme.com/msmm

P.P.S. Dr. John W. Dalle Molle incorporates BC2945 Certificate in Administrative Management
various concepts into this course and 22 – 25 February 2009 www.iirme.com/adminmgnt2
has been lauded for his impressive For more information on any of the above events please contact us on
presentation style! Tel: 971-4-3352483 or email: info@iirme.com

Tel: 971-4-3352437 Fax: 971-4-3352438 Email: register@iirme.com Web: www.iirme.com/backoffice


Back Office Management And Operations 15 – 19 February 2009

Course Timings
Registration will be at 8.00 on Day One. All five days will run from 8.30 to 14.30 with two breaks for coffee and refreshments at appropriate intervals. Lunch will be
served at the end of each day.

Course Description
The course is focused on managing back office operations with treasury, trading books and internal funds transfer pricing used as examples.
The procedures and principles discussed may be applied to all types of back offices in banks and financial institutions. The emphasis is on a proactive management
style to continuously improve quality throughout back offices while at the same time, establishing efficient processes and delivering cost-effective services. The
operational risk and operations management procedures are discussed in detail and from the perspectives of the treasury function, ALM function and the trading
functions.
The major back office services are covered in detail, problem areas are highlighted and procedures outlined to minimise errors and disruptions in order to facilitate
smooth processing and business continuity.

Training Aids
Throughout the course, you will use Excel-based models and be presented with case studies directly related to the material. Numerous real examples of loss events and
other adverse manifestations of the different risks will be discussed. Please remember to bring your laptop.

Course Outline

Day One – Sunday, 15 February 2009 - Participants involved in the corporate actions
- Summary of various corporate actions
Operational Risks And Operations Management • Managing client services and customer relationships
v EXHIBIT – Bankhaus Herstatt, German Bundesbank and FOREX
Operational Risk Categories, Factors, Issues And Sources settlement risk
v EXHIBIT – Bank of New York computer system failure, threats to CHIPS
• Operational risk spectrum – defining operational risks and exposures payment clearing system and payment systems risk
• Recent market developments leading to increased exposures to operational v EXHIBIT – Default or near-default of clearing-house members
risk
• Operational loss causes, factors, events, effects and consequences
• Decomposing operational risk - expected, unexpected and extreme losses Day Two – Monday, 16 February 2009
• Unexpected operational losses due to people, processes and systems risk
. EXCEL Exercise – Generating random occurring operational events Fraud, Outsourcing, Business Line Management, And
Systems And Technology And Operations Controls And
Overview Of Back Office Operational Structures
Management
• Operations and operational risk policies and organisation
Fraud – Controls, Detection And Prevention
• General structure of the back, middle and front offices
• Overview of the functions of the back, middle and front offices
• The nature of fraud
• Activities and information requirements of back, middle and front offices
• Defining internal and external fraud risk
• Back office and independent risk reporting
• The factors leading towards fraud events
v EXHIBIT – 1968 paperwork crisis and Wednesday trading halts on US
• The fraud triangle – opportunity, pressure and rationalisation
exchanges
• Defining fraud categories and events
v EXHIBIT – Tokyo blackout on August 14, 2006 and delayed NIKKEI 225
• Fraud detection, investigation and prevention
index updates
• Resolution of fraud and legal follow-ups
v EXHIBIT – Criminal prosecutions of financial fraud
Back-Office Operations – Clearing, Custody And Settlement
v EXHIBIT – Famous Ponzi schemes
Processes
Money Laundering
• An overview of operations functions and factors
• Fundamental tasks of the core elements of operations functions
• An overview of money laundering
• Responsibilities of the derivatives operations function
• The history of money laundering risk
• An overview of clearing and settlement processes
• Stages to implementing money laundering
• The settlement process
• Reporting of suspicious activities associated with money laundering
- Settlement conventions, cash flows, factors and issues v EXHIBIT – ABN-AMRO, wire transfers and money laundering
- Procedures and controls for the settlement process v EXHIBIT – Money laundering, Bank of New York and Russian
- Consequences of settlement failure organised crime
• The clearing process
- Clearing mechanisms and the role of the clearing house Systems, Technology And Operations Management
- Services offered by clearing organisations
- Comparing clearing procedures for securities and derivatives • An overview of systems and technology in the operations processes
• An overview of custody and custodial services
• Effects of poorly managed operations systems and technology
• Corporate actions and asset servicing related to custodial services
• Operations management and the relationship with the IT group
- An overview of corporate actions • Effects of IT procedures and controls on operations systems
- Announcement, record, pay and dates and deadlines v EXHIBIT – SWIFT electronic funds transfer communication system

Tel: 971-4-3352437 Fax: 971-4-3352438 Email: register@iirme.com Web: www.iirme.com/backoffice


Outsourcing Risks And Business Line Management Asset/Liability Management, Internal Funds Transfer Pricing
Systems And Economic Transfer Prices
• Best practice for business line risk management
• Business continuity management and contingency planning • An overview of asset/liability management (alm) desk
• Outsourcing risks - Overview of asset/liability management
- Overview of outsourcing - Components of an alm programme
- Categories of outsourcing risk - Alm interest rate risk measurement techniques
- Recent examples of outsourcing • Funds transfer pricing (ftp) systems
- Objectives of a funds-transfer pricing system
Operational Control And Operations Risks - Internal pools of funds and funds transfer pricing systems
- Limitations of traditional funds transfer pricing
• Workflow analysis and operations performance assessment • Guidelines for setting economic transfer prices (etps)
• Short and long-term approaches for controlling operations risk - Economic transfer pricing, arbitrage opportunities and the maturity
• General approaches for controlling operations risk spread
- Novation, netting arrangements and the reduction of operations risk - Pricing schemes and economic transfer prices for lending activities
- Confirmation matching and transactions netting - Transfer prices and cost of funds and resources for lending activities
- Reconciliation of cash, bank, nostro and vostro accounts • Matched funds transfer pricing and capital allocation
- Margin and collateral management and risk reduction
• Effects of operations on operational risks Managing A Trading Book From The Perspective Back Office
• Monitoring operations controls and limits
v EXHIBIT – Martha Stewart, ImClone Systems and insider trading • Introduction to trade processing – the anatomy of a deal
v EXHIBIT – April 1992, flooding of the Chicago financial district • Organisation and operations of a brokerage and trading firm
• Underwriting – the birth of a security
• Over-the counter versus exchange traded markets
Day Three – Tuesday, 17 February 2009 • Operations structure in the trading room
• Order room and trade execution
Treasury Management, Funds Transfer Pricing Systems - Basic order information, order types and order processing
And Trading Book Management From The Back Office - Trade execution and capture
Perspective - Trade reconciliation and recording
• Purchase and sales (P&S)
Managing The Treasury Function - Confirmation, recording and booking
- Figuration including accrued interest
• Functions of the treasury - Comparison and reconciliation
• Treasury risk spectrum • Cashiering
• Centralising the treasury functions - Receiving, delivering, and vaulting of securities
• Payment systems and their effect on the treasury function - Security loans/borrowing and transferring
• Cash management - Hypothecation of security for margin accounts
- Cash management, operating cycles and cash flow timelines • Stock record accounting
- Cash aggregation, receipts and disbursements • Margin account management
- Managing cash inflows – collection activities - Initial, maintenance and variational margins account
- Managing cash outflows – concentration and distribution systems - Margin account maintenance - margin calls and close outs
• Liquidity management • Brokerage accounting
- Defining liquidity and liquidity risk - Establishing accounts and dual-entry bookkeeping
- External and internal sources of funds - Daily cash reports and profit and loss statement
- Cash budgeting and liquidity management tools - Bank-brokerage relationship
- Managing cash shortfalls • Clearing and settlement
• Interest rate management - Functions of clearing organisations and settlement systems
- Interest rate exposure reduction - Clearing and settlement for bonds, equities, and derivatives
- Asset-liability management and gap analysis • Custody services
- Hedging using interest rate derivatives and structured products v EXHIBIT – Trading Process (Short) Case Studies
• Credit risk management u Salomon Brothers and manipulation and illegal trading in the US
- Current, potential, notional and aggregate credit exposures treasury markets
- Counterparty credit quality assessment, spreads, ratings, and scoring u London Stock Exchange, Big Bang, and cancellation of the TARUS
- Traditional credit risk mitigation: collateral, limits, and netting trading system
- Hedging using credit derivatives and structured products u Nic Leeson, Barings Bank, inappropriate control of front and back
• Foreign exchange management operations
- Foreign exchange settlement u Toshihide Iguchi, Daiwa Bank and 30,000 unauthorised treasury market
- Internal cash management and currency netting trades
- Exchange rate risk – translation, transaction, economic and operational u Yasuo Hamanaka, Sumitomo Corporation, failure to segregate back and
exposures front office, and 10 years of unauthorised copper trades
- Hedging using currency derivatives and structured products u National Australia Bank (NAB) and unauthorised foreign currency trades
• Risk management in the treasury v EXHIBIT – Margining Systems – SPAN and TIMS
- Risk management practice in the treasury group . EXCEL – Calculating margins using the SPAN margining systems
- Risk measurement, sensitivity analysis, scenario analysis and stress testing
- Contingency planning and disaster recovery
• Treasury information systems and technologies

Tel: 971-4-3352437 Fax: 971-4-3352438 Email: register@iirme.com Web: www.iirme.com/backoffice


Day Four – Wednesday, 18 February 2009 Day Five – Thursday, 19 February 2009
Operational Loss Databases, Operational Risk Operational Risk Measurement, Risk Capital Allocation,
Assessment, Identification, Measurement, Comparing Operational Regulatory Capital Charges And Model
Credit, Market And Operational Risk And Enterprise Risk
Risk Management
OPVaR Forecasting, Stress Testing And Scenario Analysis
Operational Event And Loss Databases
• Common models for loss severities, loss frequencies and loss event duration
• Information sources for operational events, losses and indicators • Mapping correlations between operations and operational risks
• Elements, responsibilities and benefits of an operational event collection • Defining an operational Value-at-Risk (OPVaR) estimate
policy • OPVaR forecasting with collective and individual risk models
• Setting capture thresholds for operational loss event collection • Modelling operational loss exposures using the historical simulation
• Managing, control and monitoring operational event databases VaR model
v EXHIBIT – Mizuho Securities, erroneous trades and the “Fat Finger • Stress testing and scenario analysis for forecasting operational risk
Syndrome” measures
v EXHIBIT – OPVaR forecasting for various frequency and severity
Operational Risk Assessment, Identification, Measurement distributions
. EXCEL Example - OPVaR forecasting using historical simulation var
• Overview of operational risk assessment, identification and measurement and different categories of random occurring Monte Carlo loss
• Top-down and bottom-up approaches to operational risk assessment and events
measurement
• Defining and identifying the key operational risk factors, indicators, drivers Operational Risk Performance Analysis And Risk Capital
and escalation triggers Allocation
• Operational risk profiling and factor selection for operational risk
identification • Backtesting operational risk models
• Qualitative operational assessment techniques including risk maps, risk • Operational risk audits and reviews
scorecards, workflow charts and tracking charts • Operational risk and event reports
• General quantitative techniques for measuring and modelling operational
loss severities, event frequencies and event durations Modelling Operational Regulatory Capital Charges Under Basel II
• Operational risk loss event classification - risk sources and related risk
indicators • An overview of operational risk capital charges under Basel II
• Basel II and the three complementary pillars of operational risk
Comparing Credit, Market And Operational Risks - Pillar 1 – minimum requirements for capital charges
- Pillar 2 – supervisory review process
• Categories of credit, market and operational risks - Pillar 3 – public disclosure requirements
• Loss categories for credit, market and operational risks • Basel II risk measurement and regulatory capital measurement approaches
- Loss categories for credit risk - Basic indicator approach
- Loss categories for market risk - Standardised approach
- Loss categories for operational risk - Advanced measurement approaches
• The relationship between credit, market and operational risks • An overview of the advanced measurement approaches
• Recent examples of credit, market and operational losses - Internal measurement approach
- Recent examples of credit risk losses - Loss distribution approach
- Recent large market losses attributed to rogue traders - Risk scorecard approaches
- Examples of the recent extreme operational risk losses • Factors for selecting an operational regulatory risk measurement
• Identification, management and measurement for credit, market and approach
operational risks • Operational Risk and the Quantitative Impact Studies (QIS)
• Loss distribution definitions and assumptions for market, credit and v EXHIBIT – Basic indicator approach, the standardised approach, and
operational risks advanced measurement approach for operational regulatory capital
• Defining value-at-risk (var) forecast for market, credit and operational risks measurement
• Data availability for credit, market and operational risk modelling
Model Risk
Enterprise-Wide Aspects Of Operational Risk Management
• Sources of model risk - general types of modelling errors
• Dimensions to the enterprise risk management (ERM) functions process • Categories of model risk
• Comparing traditional and enterprise risk management functions - Risk of choosing the wrong model
• Implementing erm procedures and policies – best practice - Risk of incorrectly using a model
• Benefits and limitations of enterprise-wide risk management - Incorrect model calibration
• Contributions of operational risk management procedures to ERM - Market data processing issues
effectiveness - Improper model application
• Implementing a enterprise-wide operational risk management policy • Controlling, monitoring and managing model risk
v EXHIBIT – Recent examples of model risk

Tel: 971-4-3352437 Fax: 971-4-3352438 Email: register@iirme.com Web: www.iirme.com/backoffice


IIR Middle East certified by

Back Office Management And Operations


15 – 19 February 2009 • Villa Rotana Hotel, Dubai, UAE

FIVE EASY WAYS TO REGISTER


971-4-3352437 971-4-3352438 register@iirme.com

IIR Holdings Ltd. GCS/IIR Holdings Ltd.


PO Box 21743, Dubai, UAE P O Box 13977, Muharraq, Kingdom of Bahrain

www.iirme.com/backoffice
For further information and Group Discounts*
contact 971-4-3352483 or email: r.devnani@iirme.com
*Group discounts are only applicable on the full event price
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And Operations (Save US$ 500) (Save US$ 200)

If you have eight or more delegates who need this training, contact IIR In-House on 971-4-3352439 or inhouse@iirme.com
Course fees include documentation, luncheon and refreshments. Delegates who attend all sessions will receive a Certificate of Attendance.
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