FINRA Trading Simulation and Compliance Issues Short Course

Duration: 2 days

Dates: 19 - 20 November 2008, FINRA, London

After reviewing the theory behind products and markets, participants undertake simulated trading sessions with a realistic view of the trading process. News-driven simulations are based on real events which are taken from Reuters and Bloomberg, and then programmed into the RiskManager simulation. Participants provide two-way prices to one another and request prices using open-outcry or telephones; trades are settled by counterparties using the RiskManager settlement system. The course also reviews and explains compliance issues specific to trading.

This course is part of the Capital Markets, Regulation and Compliance Diploma and Short Courses offered by the ICMA Centre and FINRA. You can study this course on a stand-alone basis or as part of the full Diploma.

Participant Profile

• Compliance staff with at least one year's experience; staff with more than five years' experience may benefit from individual short courses rather than the full diploma
• Operational risk and internal audit staff, who need greater insight into compliance and regulation
• Lawyers (0-2 PQE) who want a "real world" view of implemented compliance (short courses recommended)
• Regulators from other countries who want to better understand the challenges of implementation.

Content

The simulated trading sessions give graduates as realistic as possible a view of what life is like on a trading floor. The news driven simulations are based on real events (taken from Reuters and Bloomberg, and then programmed into the RiskManager simulation) that have occurred in the US Treasury bond markets in relatively recent times (with only a small amount of artistic license). Participants will be required to make two-way prices to other dealers in the trading system and will be able to deal on prices given to them by the same simulated dealers. To add a further layer of complexity and interest, participants can also request prices from each other using either open-outcry or telephones; trades done on this basis must then be settled by the counterparties using the RiskManager settlement system.

The participants will be split into pairs and each pair will represent a London based investment bank. Pairing is essential due to the intensity of the trading environment- there will be phones ringing, the system market makers and fellow participants will be asking for prices, there are important news events to read, digest and act on, there will be trades to settle, and finally, the open outcry will make it very noisy. Apart from the essential division of labour, the participants will get some idea of what it is like to work as part of a trading team. The aim of the game is to make as much money as possible whilst staying within pre-determined dealing limits, to be active market makers both with the system and with each other and to manage the risk (especially the overnight risk associated with the New York and Tokyo markets being open). The investment bank that makes the most money whilst fulfilling the other criteria will win a bottle of champagne. The second and third placed banks will win a bottle and a half bottle of champagne respectively. The finer detail of the sessions will be explained on the day.