ACF Academy
Operations and IT Training Training
 Operations and IT Training
Targeted Audience:
 This course is targeted at an existing securities operations audience, and is designed to take their current understanding to a new and much more detailed level. On a daily basis the Heads of Securities Operations fight to avoid the negative impact of failed trades, as the primary impacts are: 1) monetary loss against the bottom line, and 2) potential loss of clients. This seminar provides a greater awareness of what causes failed trades and the rectifying measures that can be taken.
CPE Credits:
 7 hours
Course Level:

Failed Trades Management

The principal objectives of this one-day seminar, viewed from an operations perspective, are to:
  Identify the point at which failed trades occur within the securities trade lifecycle
  Highlight the numerous points of impact of failed trades
  Understand how failed trades are identified
  Appreciate the various causes of failed trades
  Understand how failed trades can be prevented
  Appreciate how the impact of failed trades can be minimised
  Describe measures to enforce trade settlement
  Understand procedures for recovering lost interest

Course Outline
Definition: the meaning of the term 'failed trade'
Fundamentals: impact of fails on:
  • ownership rights
  • purchase cost/sale proceeds, and
  • matched settlement instructions
Impacts: highlights the various functions and business attributes that are affected by failed trades, including:
  • interest on cash
  • client relationships
  • corporate actions
  • counterparty exposure
  • capital adequacy (Basle II)
  • funding
  • financial statements
Markets: explores the fact that failed trades are common in some markets, but are not tolerated in others, and the underlying reasons
Causes: highlighting the various ways in which fails can occur, including:
  • unmatched instructions
  • insufficient stock
  • insufficient cash, collateral and credit line
Identification: how failed trades are recognised, the earliest point of identification, further impact of failure to identify
Prevention: pinpoints the trading actions and operational measures that maximise the chances of settling trades on their due date, including:
  • working within deadlines
  • resolution of non-matching instructions
  • securities realignment
  • securities borrowing
  • cash and collateral management
Minimising Impact: partial settlement
Enforcing Settlement: describes Buy-In and Sell-Out - the ultimate course of action open to buyers and sellers in order to force a counterparty to settle a trade
Interest Claims: identifies the circumstances under which lost cash interest is (and is not) recoverable from counterparties, including cash calculations, claiming procedure and internal monitoring of unpaid claims.


NB All practical sessions are highlighted like this:
means a Workshop or Simulation
means a Case study




"Excellent overall program… Practical applications were very helpful (modules on trading options)."

– Rafael P.