The securities operations market is constantly changing and new technology is being applied more and more. To fully apprehend the impact of these changes and new technology, it is important to understand the basics of Financial Markets, its instruments and the operational processes that run the ecosystem.
In the CIOP curriculum, we first lay the foundation by looking at the financial market; what is it actually? Which parties do we recognize? What financial instruments are there and how do they work? Then attention to the processes, systems and technology. What about AI applications and, for example, fund transactions based on blockchain technology? This training is suitable for employees in the Operations domain, IT and Change, Finance, Operational Risk Management, Audit.
CIOP is a unique training in which theory and theoretical insights within the securities operations domain are combined with a practical application. A certified member is not only able to learn the necessary subjects and pass the exams, but is also able to translate these into practice, including by writing a structured article and giving a management presentation (soft skills). The continuing education program safeguards the knowledge acquired by registered members.
The CIOP register and the CIOP brand are owned by CFA Society Netherlands (CFA Society Netherlands) which is part of the network of CFA Institute (CFA Institute).
First part of the CIOP training program
Introduction to Financial Markets
This module gives you an excellent overview of the financial markets, financial products and the several processes, which take place in the financial world. The course is divided into four parts:
- The financial market and its participants;
- Financial instruments;
- Processes in financial markets;
- Financial Markets today.
In order to present the theory in a more comprehensible way, the figure on the right is used to show the connection between the markets, its participants and the related processes. This figure is also the basis for the course presentation.
Upon successful completion of the course, participants receive the CIOP certificate Introduction to Financial Markets.
We will also cover the basics of financial mathematics:
- Simple interest and discount
- Application of simple interest and discount
- Compound interest
- Bond Yields
- Geometric versus arithmetic rates of return
- Measuring risk
- The normal distribution
- Covariance and correlation
The Portfolio Management course is designed for individuals who want to update or enhance their knowledge of portfolio management. The course combines theoretical knowledge with practical examples and real-life cases. It is the second course of the CIOP program, and participants who pass the exam receive the CIOP certificate for Portfolio Management.
The course covers various topics, including asset categories (shares, bonds, alternative investments), investment policy, risk management, international investing, behavioral finance, asset allocation, tactical asset allocation, equity valuation, bond market, real estate, commodities, hedge funds, private equity, and fund manager selection. It will also cover various Nobelprice-winning theories as the Modern Portfolio Theory and the Capital Asset Pricing Model.
Upon completing the course, participants will be able to understand the functioning of different asset categories, the risk-return relationship, modern portfolio theory, strategic and tactical asset allocation, and the valuation of equities and bonds. They will also gain knowledge about international investing, risk diversification, and methods for evaluating fund managers’ performance.
Upon successful completion of the course, participants receive the CIOP certificate Portfolio Management.
Securities Operations and Asset Servicing
Securities Operations and Asset Servicing is a comprehensive course in which the intricacies of the securities trading market delve into the various participants and processes involved in the clearing, settlement of trades, clearing processes, including novation, netting methods such as trade-for-trade and continuous net settlement, settlement methods, and risk mitigating measures like buy-ins, default funds, margin requirements, securities account and cash account structures, tax regimes, static data, and settlement instructions. Finally, we will explore the concept of interoperability, its current market situation, the complexity involved, the choice of clearinghouse, and its implications for the future. We will also explore different electronic solutions, including customer-specific tools, web-based platforms, and the widely used SWIFT messaging system.
The pre-settlement phase is critical in ensuring accurate and efficient trade processing. We will analyze the processes involved in direct link and sub-custodian arrangements, settlement at custodians, straight-through processing (STP) versus non-STP, foreign exchange transactions, matching, cancellation, and credit management.
Moving on to the settlement phase, we will discuss unmatched transactions, settlement confirmations, contractual versus actual settlement, cash management, and partial settlement. Post settlement, we will explore topics such as failing transactions, reconciliation, cost charging, reporting, and operational claims.
Understanding clearing processes is crucial, and we will explore the roles of central counterparties, clearing members, multilateral trading facilities, and dark pools. We will discuss various types of clearing, the traditional exchange model, settlement agents, and clearing-only processes.
Upon successful completion of the course, participants receive the CIOP certificate Securities Operations and Asset Servicing
Second part of the CIOP training program
Risk Management and Compliance
The Risk Management course, part of the CIOP program, is designed to update and enhance participants’ knowledge of risk management. The course combines theoretical knowledge with practical examples and real-life cases to facilitate learning. It consists of a 2-day intensive course, followed by the study of real-life cases and a final exam. Topics covered include risk management in organizations, risk management within financial institutions, risk regulation and supervision, risk categories (credit, market, liquidity, operational), risk management in banks and pension funds, hedging strategies, and market value assessment.
With regards to Compliance we will discuss the difference between being the container term Compliance and Regulatory Compliance. Compliance often refers to the adherence to the written or unwritten rules within a company with a reference to the deterrence theory (punishing wrong behavior) and nowadays also with motivational view, i.e. granting rewards to good behavior. Regulatory compliance describes the goal that organizations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations. During the course we will explain the most important regulation, not so much from a legal standpoint but what all this regulation implies for the role as the Compliance officer.
Upon successful completion of the course, participants receive the CIOP certificate Risk Management and Compliance.
AI in Finance
Due to the increasing amount of data and the lack of transparency (new) technologies like AI are needed that make it possible to interpret this data correctly in a timely manner and convert it into valuable actionable information. This is called applied data intelligence.
The module Artificial Intelligence (AI) in Finance gives the student insight into terms such as big data, artificial intelligence, machine learning and robotics and their working in various business cases. An important application of AI is in the field of KYC and AML and show the student a new equilibrium between human and artificial intelligence to combat financial crime.
The course covers the following topics.
Business Process Management: this topic delves into some fundamentals like Target Operating Models, Business Process Management and Business Process mining.
(Big) data management: this topic delves into some fundamentals like applied data intelligence, (Big) data, Data science.
Artificial Intelligence (AI); this topic delves into some fundamentals of of AI, the evolution of AI, branches of AI and potential & limitations of AI.
Machine Learning (ML) this topic delves into some fundamentals of of ML, Deep Learning (DL) and Natural Language processing (NLP).
Robotics Process Automation (RPA): this topic delves into some fundamentals of of RPA, benefits and business applications.
Applying AI in compliance with a KYC/AML business case.
Upon successful completion of the course, participants receive the CIOP certificate AI in Finance.
The Treasury Management course is designed to update and enhance participants’ knowledge of Treasury. It combines theoretical knowledge with practical examples and real-life cases to provide a comprehensive learning experience. The course is part of the CIOP program and concludes with an exam, leading to the awarding of the CIOP certificate for Treasury.
The topics covered in the course include:
Treasury: Historical perspective, definition, and positioning in the organization.
Treasury within financial institutions: The relationship between Treasury and Risk Management.
Cash Management: Efficient and effective management of cash flows within a financial institution.
Foreign Currency Management: International monetary systems, foreign currency markets, quotations, and forward rates.
Interest Rate Parity: Understanding interest rate differentials, inflation, purchasing power parity, and the Fisher Effect.
Interest Rate Management: Duration as an interest rate sensitivity factor and yield curve analysis.
Instruments: Interest rate swaps, inflation swaps, credit default swaps, and total return swaps.
Calculation of Market Values: Swaps, forwards, and futures.
Commodities as an Investment Instrument.
Hedging: Evaluating the sense or nonsense of hedging.
Asset and Liability Study: Understanding the importance of managing assets and liabilities.
Upon completion of the course, participants will have a better understanding of the treasurer’s role, the relationship between Risk Management and Treasury, the importance of effective cash and foreign currency management, and various financial instruments. They will also gain insight into commodities as an investment category and the significance of asset and liability management. The course is available in both English and Dutch, with materials provided in the respective languages
Upon successful completion of the course, participants receive the CIOP certificate Treasury.
Blockchain in Finance
Basic goal of this course is to get a good understanding of what Blockchain is and how it can be applied to processes that we know in Finance. Examples are: fund trading, corporate action processing, clearing, settlement. The course covers the following topics.
The Truth about Blockchain: This topic delves into the inner workings of blockchain technology, explaining how it functions and discussing patterns of technology adoption. It also explores the new architecture brought about by blockchain and provides a framework for organizations considering blockchain adoption.
Smart Contracts: The Blockchain Technology That Will Replace Lawyers: This section focuses on smart contracts, which are programmable agreements built on blockchain. It explores how smart contracts can be utilized and highlights their benefits.
Proof of Work vs Proof of Stake: A comparison between two consensus mechanisms used in blockchain networks: Proof of Work (PoW) and Proof of Stake (PoS). It explains the basics of each mechanism, compares their adoption rates, and details how transactions are verified under each model. The advantages of PoS over PoW are discussed, as well as potential disadvantages of the PoS model.
Bitcoin Energy Consumption: This topic addresses concerns about the energy consumption associated with Bitcoin mining. It explains the work performed by miners, discusses sustainability and carbon footprint issues, and provides estimates of energy usage. A comparison with other payment systems is made, and alternatives to reduce energy consumption are explored.
The Social Innovation of M-Pesa and Digital Currencies: The focus here is on M-Pesa, a successful mobile money platform, and the impact of digital currencies on the banking industry. The reasons behind M-Pesa’s success and its lack of replication in Western countries are analyzed. The transformative potential of open blockchains in the development finance industry is also discussed.
Ethereum – Hyperledger – Corda: This section highlights the technical differences between Ethereum, Hyperledger Fabric, and R3 Corda, which are popular blockchain platforms. Each platform is described, and their distinct features and use cases are explained. The concept of “Code is Law” is touched upon as well.
Governance in the Age of Blockchain Distributed Ledger Technology: The focus here is on the governance aspects of blockchain technology. It explores how blockchain affects governance, describes blockchain environments, discusses implications for risk functions, and presents a risk and controls framework by PwC. The concept of digital continuous audit is also introduced.
Upon successful completion of the course, participants receive the CIOP certificate for Blockchain in Finance.
The course aims to update and enhance participants’ knowledge of derivatives through a combination of theoretical learning and practical application. The training method includes studying a provided reader prior to the 1-day course, engaging in intensive training with real-life examples, reviewing cases with the trainer, and concluding with an exam. The course covers various topics such as the definition and history of derivatives markets, characteristics of derivatives, options pricing models (Black and Scholes and the binomial model), exotic options, option strategies (including covered call writing, bull and bear spread, strangles and straddles, condors, butterflies, not only the theory behind them but also in what market conditions to use them), risk management, and the processes involved in derivatives trading. We will talk elaborately about the important role of market making and the different kind of market makers. Upon completion of the course, participants will have a comprehensive understanding of derivatives, market functioning, terminology, pricing, strategies, risk parameters, volatility, and the role of institutional investors.
Upon successful completion of the course, participants receive the CIOP certificate Derivatives.
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The CIOP training program, which comprises of 6 modules and a thesis*, is only offered in partnership with CIOP.Academy.