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Course Level
Introduction
Delivery Method
Classroom Instructor-Led Course
Professional Development Credit Hours
16
Pre-requisites
Recommended: Fundamentals of Energy Futures or equivalent knowledge.

"Speaker was extremely knowledgeable, examples were relevant, materials were very effective." Agrium

Faculty

Larry G. Lawrence President of Enterprise Risk Consulting, LLC, has over 30 years of experience in energy risk management and trading. His experience includes financial trading in energy and equity markets, physical and financial risk management and trading consulting, physical and financial portfolio management, technical and options analysis, corporate education, advisory service publishing, and institutional sales. Mr. Lawrence has extensive experience in trading and risk management implementation for energy companies. His experience includes hedge strategy development, tactical trading assistance, the development of trading and risk management policies, procedures, and control structures, the review and assessment of risk management programs, risk and performance measurement, risk assessment, trading and risk system selection and implementation, transaction structuring, real option valuation and modeling, market structuring, development of forward price curves and term structures of volatility, credit risk management, and trading and risk management education. His work includes the evaluation and development of risk system functionality to support internal and external compliance with risk policies.

Accreditations

NASBA: Mennta Energy Solutions is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org

CPD Certification Services: The CPD Certification Service works with Mennta Energy Solutions to ensure valuable knowledge is structured to complement the universal guidelines of Continuing Professional Development. Mennta Energy Solutions courses are approved by CPD at one credit per training hour.

BAC: Mennta Energy Solutions is pleased to be endorsed by the BAC for Independent Further Education as a Short Course Provider. Endorsement covers courses delivered in the UK only.

GARP: Mennta Energy Solutions is registered with GARP as an Approved Provider of Continuing Professional Development (CPD) credits.

Front to Back Office: Trading Controls, Risk Measurement and Modelling (CLASSROOM) - FTBOE

Course Summary

This fascinating and interactive two-day workshop will give delegates a thorough understanding of best practice controls to be applied in commodity trading activities. It also offers in-depth coverage of systems requirements, credit risk management best practices, risk and performance measurement, and a strong focus on capital adequacy issues. Subject areas covered include recent developments in regulatory and legal compliance, and ethics.  

Through interactive group case studies, delegates will analyze examples of control inadequacies leading to:

  • Expensive trading mistakes
  • Liquidity crises
  • Market manipulation
  • Misuse of leverage

Who Should Attend?

Class delegates include everyone from support staff to management from trading, risk management, operations, accounting, credit, and contracts groups. This workshop is perfect for those concerned with "front office", "mid-office", and "back office" functions for international and domestic energy commodity companies (crude oil, petroleum products, natural gas, electricity and coal) and other commodities (grains, metals, etc.).

Course Content

  • Key types of risk (faced by management and the trading room)
  • Details of recent spectacular failures
  • What happened and why
  • Same company or different planets?
    • Front Office
    • Mid-Office
    • Back Office
  • The overall controls process
  • Trading controls "Best Practices" guidelines
    • Executive management
    • Trading management
    • Traders
  • Trading authorities - limits and layers
  • Prioritizing more deals vs. better controls
  • Trading room controls
  • Capital Adequacy
    • Credit risk management and controls
      • Calculating credit exposure
      • Portfolio credit risk measurement
      • Forward-looking credit models
      • Determining credit thresholds
      • Key issues with credit and collateral annexes
    • Market price risk management and controls
      • Foundations for risk measures
      • Risk modeling issues
      • Price volatility issues
      • Application and strengths/weaknesses of value-at-risk
      • Other uses of value-at-risk
    • Additional risks to control: operational, regulatory, others
    • Stress Testing
      • Types of stress testing
      • Stress testing versus “at risk” measures
    • Determining adequate capital
      • Key measures of capital adequacy
      • Cash-flow-at-risk
      • Impact of margin (collateral) on working capital
      • Capital adequacy framework
    • Risk adjusted performance measurement
    • Determining risk tolerance
  • Regulatory and legal compliance
    • Regulation of trading and market manipulation
      • Overview of regulatory organizations
      • Market manipulation defined
    • Dodd-Frank Act
      • Overview of the new regulatory regime
      • Swap Dealers and Major Swap Participants
      • End user exemptions
      • Clearing, margining, reporting and credit risk issues
      • Implications of Dodd-Frank
  • Ethics
    • Definitions
    • Shades of gray
    • Organizational perceptions
    • Ethics in energy trading

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