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An Energy Management Institute Training Program
• Howtomeasure,monitorandmanagemarketriskandcreditrisk.• Whichtypesofriskmanagementmodelsarebestsuitedtospecifictypesoftradingandhedgingportfolios.
• Howtomanagerisksthateludemeasurementviaquantitativemodels(suchasliquidityrisk,operationalrisk,systemicrisk,regulatory/legalriskandreputationrisk).
• Howtomeasureaportfolio’sVaRusingvariousmodels.• Theimportanceofaccountingforparadigmshiftsandpriceshocksinstresstestsofaportfolio.
• HowandwhymajorcorporationssuchasBaringsBankandEnronfailed.• Howtoavoidsuchfailureswithinyourowncorporationandhowtoidentifythewarningsignsofthesetypesoffinancialrisksamongyourcounterparties.
You will leave this course with a solid and immediately useful understanding of:
• HistoryoftheSecuritiesandExchangeCommissionandhowitledtotheSarbanes-OxleyAct.
• ImplicationsofDodd-FrankontradingofOTCenergyderivatives.
Best Practices & Financial RiskApril 9-10, 2014 -- Thomson Reuters -- New York, NY
Thiscritical2-daycoursewillgiveyouanintegratedframeworktounderstandvarioustypesoffinancialriskandhowtomeasure,monitorandmanagethem.Thecourseprovidesattendeeswithapracticalyetrigorousunderstandingofbusinessethicsandreputationrisk,complianceandregulatoryrisk(includingSarbanes-OxleyActof2002andFASB133complianceissues),legalrisk,systemicrisk,operationalrisk,marketrisk,liquidityriskandcreditrisk.Inaddition,thecoursecoverstoolsformanagingmarketrisk(includingValue-at-Riskandstresstesting),implementationofbroad-basedandspecificbestpracticesandtradingcontrols.FinallythecourseprovidesdetailedcasestudiesofbothfailuresintradingcontrolsaswellasaSOXcompliancecasestudy.
Thecourseisdesignedtohelpmanagement,traders,riskmanagersandback-officepersonnelintheenergyindustrygainathoroughunderstandingofwhatthesefinancialrisksareandhowtheycanbemanagedsuccessfully.
Bygainingathoroughunderstandingofthesevarioustypesoffinancialriskaswellasthetoolsusedtomonitorandmanagetheserisksclientscanidentifyandavoidthepitfallsthatledtospectaculardisastersbothwithinandbeyondtheenergyindustry.Consequentlyitisvitalforcorporateofficers,backofficepersonnel,tradersandriskmanagerstobeknowledgeableaboutthelatesttools,techniquesandtacticsforriskmanagementandmitigation.
3Easy Ways to Register
Venue Location
Registration Fees
Course Times8:30am-4pm,April98:30am-4pm,April10
What You Will Learn
Why You Should Attend
1stdelegate: $1,9952nddelegate: $1,7953rddelegate: $1,600
Feeincludesfullcourse,expertinstruction,coursematerials,continentalbreakfast&lunch.
IncludesimplicationsofDodd-FrankonthetradingofOTCenergyderivatives.Plusparticipateinareal-timeportfoliorisktradingsimulation!
Thomson Reuters 195BroadwayEastSkybox,5thfl.NewYork,NY10007Recommendedhotelsonregistrationform.
1CallPMAConferenceManagementat201.871.0474orsendemailto:register@pmaconference.com.
2 Complete&faxthisformto253.663.7224.
3Complete&mailtheformto:PMAConferenceManagement,POB2303,FallsChurch,VA22042.
An Energy Management Institute Training Program
Best Practices & Financial RiskApril 9-10, 2014 -- Thomson Reuters -- New York, NY
Who Should Attend
Thecourseisapplicabletoalllevelsoftheenergyinfrastructure,oil,naturalgas,electricity&coal.Individualsineveryfunctionalareaofresponsibilityinallenergyindustrieswhosedecisionshavesignificantfinancialimpactwillbenefitfromthisprogram.Managersfromareassuchastrading,riskmanagement,compliance,humanresources,ethics,credit,contracts,operations,marketing,sales,supply&distribution,purchasing,financial&accountingwillfindthecoursehighlybeneficial.Someofthemorespecificareasfollow:
• TradersofanyoftheEnergyproducts
• Wholesale/MarketingCompanies• Jobbers• Retailer• End-Users• CommercialFleetManagers• Governmentagencies–Federal-State-Municipal
• Transportationcompanies
• MajorOil&LargeIndependents:• Refiners• Marketers• Supply&Distributionpersonnel
• ExchangePersonnel• Terminalmanagers• RiskManagers• WholesaleandCommercialmanagers• RetailBranded&unbrandedmanagers• Traders
• LenderstotheEnergyIndustry• Futures&OTCBrokers–especiallybrokerscateringtotheabovecompanies
• Utilities&Powermarketers• NatGasMarketers• Accounting&financialpersonnel• BackOfficeadministratorsoftrading&hedgingoperations
• Cutting-edgeissuesincomplianceandregulatoryriskincludingFASB133andanin-depthstudyofSOX.• Whatlegalandsystemicriskareandhowtheseissuesaffectcompanieswithintheenergyindustry.• Differenttypesofmarketriskandhowhedgingofoutrightpriceriskresultsinbasisandoptionalityrisks.• The“Greeks.”• Allofthetoolsatyourdisposaltomanagemarketriskincludingtraditional,position-basedtoolssuchasstoplossplacementandvolumetriclimitsaswellasportfolio-basedtoolssuchasmark-to-market,Value-at-Risk,stresstestingandfixedfractionalmoneymanagement.
• ApplicationofstatisticaltheoriesandhowtheyrelatetocalculationofValue-at-Riskincludingassumptionsofanormaldistributionaswellashownon-normaldistributions(skewness,kurtosisandstableParetiandistribution)effectValue-at-Riskcalculations.IncludedaretoolssuchasExtremeValueTheoryandGARCHwhicharespecificallydesignedformeasuringthetailofastableParetiandistribution.
• ModelsforCalculatingValue-at-RiskincludingtheLinearmodel,theDelta-Gammamodel,theHistoricalSimulationmodelandtheMonteCarloSimulationmodel.AlsoincludedisadiscussionoftheprosandconsinherentinemploymentofeachofthefourmajortypesofVaRmodels.
• ApplicationoftheoriesoffinancialmathematicsandhowtheyrelatetocalculationofValue-at-RiskincludingthedifferencebetweenaVaRmeasure,VaRmodelandaVaRmetric.Alsocoveredareportfoliomapping,inferenceproceduresandtransformationprocedures.
• ModelingforPriceShocksandParadigmShifts.• Whatliquidityriskisandhowtointegrateitwithinadynamicmarketriskmanagementprogram.• Theimportanceofimplementationofbroad-basedandspecifictradingcontrolsinordertoreduceoperationalrisk.• Creditriskmanagementissuesincludingvariouscreditriskmodels(suchasCVaR,KMV,Z-Score,Econometric,ActuarialandRatingAgency)andmitigationtools(includingcreditderivatives).
• Financialriskcasestudies:CrayInc.,BaringsBankandEnron.
Thiscourseearns14CPEcredits.EMIawardscredithourstowardsCPEandCertifiedPurchasingManagerstatus(CPM).
CPE Credits
An Energy Management Institute Training Program
Course Syllabus: DAY ONE Overview of Financial Risks: Regulatory, Compliance, Legal, Systemic, Operational & Market Risks
Discussesthesixmajorcategoriesoffinancialriskthatareexperiencedbyallcorporationsthatareinvolvedintrading.Typesoffinancialriskexperiencedbyentitiesthatdonottradeaswellasadefinitionofbasictermssuchas“bestpractices”and“front”,“mid”and“back”officesarealsocovered.Thissectionalsoprovidesattendeeswithanoverviewofthehistoryofbusinessethicsaswellastwocontrastingschoolsofthoughtregardingbusinessethicsandreputationrisk,namelythe“utilitarian”modelandthe“corporatesocialresponsibility”model.
Best Practices & Financial RiskApril 9-10, 2014 -- Thomson Reuters -- New York, NY
ThissectioncoverstheDodd-FrankActincludingbroadgoalsoftheAct,theDodd-Frankregulatoryhierarchyforderivatives(alongwiththepotentialforfuture“regulatorycreep”aswellasregulatoryturfwars)andnewregulatoryterminology.ParticularemphasisisplacedonthekeypointsoftheActandhowthesepointsspecificallyrelatetothetradingofOTCenergyderivatives(includingTitleVIIaswellassections722,750,751and753).
InthissectionweexamineFAS133intermsof“fairvalue”and“cashflow”hedging,specificcriteriatodeterminethe“effectiveness”ofahedge,“hedgeinception”and“on-goinghedges”.Thenweanalyzetheprosandconsof“qualifyingforhedgeexemption”.Nextweprovidesattendeeswithanoverviewofhowvariouskindsoflegalriskscanadverselyaffectacorporationanditexamineshowthefailureofoneplayerwithin
Throughanin-depthstudyoftheoperationalandtradingcontrolsfailuresatBaringsBankweintegratethetheoriesofoperationalrisk(coveredintheprevioussection)intothereal-worldspecificsexperiencedEngland’soldestMerchantBank.Particularemphasisisplacedonconflictsofinterest,thebreakdowninseparationofdutiesandalackofadherencetobasicprinciplesoffinancialriskmanagement.
Session 2: Overview of the SEC & Sarbanes-Oxley Act of 2002
ThissectioncoversthehistoryoftheSECincludingtheback-groundleadingtoitsformationandthephilosophygoverningitsmethodofoperation(e.g.“disclosure”).InadditionweexaminetheSarbanes-OxleyActof2002includingthehistoryleadinguptothepassageofthisSEClegislation,whatthelegislationentailsincludingdetailedcoverageofinternalcontrolsandCOSOaswellasbestpracticesandCOBITandpenaltiesfornon-compliance.Finallyweexaminethecosts,long-termstrategyguidelinesandacallforreformincludinganexaminationofthecostofSOXcompliance,examinesimpedimentstoimplementationofalong-termSOXcompliancestrategyanddiscussesthecurrentmovementtoreformSOX.
AnOverview,VaR&Statistics:Thisoverviewtothetopicofmeasuringmarketriskexaminesthe“twoschools”ofmarketriskmanagement:the“traditionalist”schoolwhichemploystoolslikestoplossesandvolumetricexposurelimits,andthe“portfolioanalysis”schoolwhichusesmark-to-market,volatilitiesandcorrelationsofassetswithintheportfolio.Wethenlookathowstatisticalanalysisappliestothemeasure-mentofValue-at-Risk.Specificallyattendeeswillexaminevolatility,correlations,normaldistribution,lognormaldistribution,skewness,kurtosisandthestableParetiandistribution.
Session 1: Overview of Course, Business Ethics & Reputation Risk
Session 5: Case Study – Barings Bank
Thisreal-timetradingsimulationwillenableparticipantstoexaminemarketriskofahypotheticalportfolioandsoallowattendeestofamiliarizethemselveswithcorrelationrisk,standarddeviationsoflinearassets,aswellasrisksofvariousoptionsheldwithinaportfolio.
Portfolio Risk Trading Simulation
Session 3: Dodd-Frank Act of 2010
Session 4: FASB 133 Derivatives Accounting, Legal,Systemic & Operational Risks
Thissectionexaminesthebasicflavorsofmarketriskincludingoutrightpricerisk,basisriskandoptionalityrisk.Inaddition,itlooksathowtheuseofoptionsasaninstrumenttohedgeoutrightpriceriskinturncreatesnon-linearmarketrisksincludingdelta,gamma,theta,vegaandrho.
Session 6: Market Risk
Session 7: Measuring Market Risk
theindustrycanadverselyaffectothersparticipantswithinthatindustry.FinallyweexamineOperationalRiskbydividingthetopicintotwosegments,humanandnon-humancenteredoperationalrisks.Regardingbothsubsections,specificemphasisisplacedonhowtheserisksrelatetoatradingoperation.
Session 4 Continued
An Energy Management Institute Training Program
Course Syllabus: DAY TWO Best Practices and the Measuring, Monitoring & Mitigation of Market, Liquidity & Credit Risks
Best Practices & Financial RiskApril 9-10, 2014 -- Thomson Reuters -- New York, NY
InthissectionattendeeswilllookatthesixVaRmodelinputs(prices,volumes,holdingperiod,confidencelevel,volatilityandcorrelations)andtogetherthegroupwillwalkthroughthecalculationofaportfolio’sVaRusingthelinearmodel.ThenwewilllookattheprosandconsofusingotherVaRmodels(delta-gamma,historicalsimulationandMonteCarlosimulation).
Session 8: Measuring Market Risk: Fat-Tails & VaR
ThissectiondiscussesthedifferencesbetweenaVaRmeasure,VaRmodelandVaRmetric.ThesectionalsocoversthethreeprocedurescommontoVaRmeasures:portfolioremapping(accordingtokeyfactors),inferenceofhistoricaldata(basedonweightingfactorsandGARCH)andtransformationprocedures.WethenexaminestresstestingissuesforVaRaswellareviewofthetheoriesofmanagingandmodelingmarketriskincludingtraditional-istschoolmeasuresandportfolioanalysistheory.Tothesetheoriesofriskmanagementwethenaddothertoolssuchasfixedfractionalmoneymanagementtechniques.Finallythesectionincludesadiscussionofissuessuchaspriceshocksandparadigmshiftsandhowthesechangesinthecharacterofmarketvolatilitycanbemanaged.
Session 13: Case Study: Enron
ThiscasestudydocumentstheriseandfallofEnronwhileplacingparticularemphasisonthebreakdownofdisciplinedadherencetoGAAP,incentivebonusesbasedonabilitytoclosedealsasopposedtoprofitabilityandthebreakdowninindependenceofmidandbackofficeduetoill-advisedhumanresourceevaluationprocedures.Inaddition,thecasestudyexaminestheabilityofEnrontodismantletheindependenceofexternalauditorsandWallStreetbrokerageanalysts.
Session 9: Measuring Market Risk: Calculating VaR
ThisportionofthecourseexaminestheproblemswiththeassumptionofanormaldistributioninmodelingforVaRandhowtoolslikeExtremeValueTheorycanaddressthelimitationofnormaldistributiontailassumptions.Thissectionalsoexaminestheprosandconsofvariousmethodsoftailmeasurement.
Session 10: Financial Theory of Value-at-Risk & the RiskManagement Pyramid
Includedinthissegmentofthecourseisadefinitionofvarioustypesofliquidityriskandhowtoidentifyandmanagesuchrisks.InadditionweexamineCreditRiskbyprovidingattendeeswithanoverviewofcreditriskmanagementissuesincludingbestpracticeimplicationsofcreditriskissuesincludingtheestablishmentandadherencetocreditrisklimitsandtheestablishmentofacreditevaluationprocess.InadditionthesectionincludesproceduresforcreditriskquantificationbasedonvariouscreditriskmodelsincludingCVaR,Z-Score,KMV,Econometric,ActuarialandRatings-basedmethodologies.Finallyweexaminevariousriskmitigationtoolsforcreditriskincludingcollateral,bondinsurance,guarantees,lettersofcredit,nettingagreementsandcreditderivatives.
Session 11: Liquidity & Credit Risk
Session 12: Risk Management Procedures and TradingControls & Specific Best Practices Recommendations
Thissectionincludesspecificbestpracticesandtradingcontrolsrecommendationstopreventproblemsinopera-tionalrisk.Theserecommendationsincludeseparationofdutiesbetweenfront,midandbackofficepersonnelaswellasadherencetothestatedrisk-rewardtolerancesofthecorporation.Wethencoverspecificrecommendationsfortradingorganizationstoemployinordertoavoidbreak-downsintradingcontrols.Includedarespecifictradingroomsuggestionsthatareemployedbybrokeragefirms(suchastapingofallconversations,timestampingofallordersandimmediateentryofalltradeintothetradingcontrolssystem).
An Energy Management Institute Training Program
Best Practices & Financial RiskApril 9-10, 2014 -- Thomson Reuters -- New York, NY
EMI’s leading industry expertshaveanaverageofover30yearsofknowledgeandexperiencein:
Energy • Commodity trading • Risk management • Education • Consulting • Financial services
Plusmanyyearsofmanagingmarketing,internationaltrading,manufacturing,consulting,start-upoperationsandprojectfinanceoperationsofwell-knowncompanies;integratedmajoroilcompaniesaswellasinternationaltradingcompanies.
EMI’sindustryexpertshavealsoprovidedriskandvaluemanagementanalysis,advice,information,andservicestoavarietyofcompaniesintheelectricpowerindustry.Clientshaveincludedpowermarketers,integratedutilities,retailpowerproviders,hedgefunds,andpowerplants.Highlights of our instructors’ experienceinclude:•Developingasuiteofmodelsforavarietyofpowermarketsthatquantifyvalueandrisk•Managingsparkspreadportfoliosforhedgefundsinthepowermarkets•Operatinginfuturestradingpitsasamarketobserverinthepowermarkets•Developingworkingpapersforinvestigationsandperformingcomplianceauditsinthepowerindustry•HelpingTexacoinitiateitsfirstuseoffuturesexchangesasanintegralpartofhedging/tradingstrategy•ChiefOperatingOfficerofTriwellMarketingandrefining•DirectorofOPIS,OilPriceInformationService,amanagement-consultingandeducationalservicesgroupthatsolelyfocusedonthedownstreamenergyindustry•MemberofBoardofDirectorsofLongviewRefinery•MemberoftheNewYorkMercantileExchangePetroleumAdvisoryBoard•ExpertwitnessforahearingbeforethesubcommitteeonsurfacetransportationfortheCommerce,Science,andTransportationCommitteeoftheUSSenate•SuppliedexperttestimonytoaUSSenatesub-committeehearingondieselpetroleumproductpricing•SuppliedtestimonytotheFederalHighwayAdministrationregardingfueltaxevasion•ExpertwitnessinaMTBElitigationagainstthemajoroilcompanies•PublishersofTheDailyHedger,BTU’sDailyGasWireandBTU’sDailyPowerReport,whichadvisethousandsofpetroleumprofessionalsdaily.
Ourinstructorsarefrequentexpertspeakersfornumerouspetroleumindustryeventsandtradeassociationsincluding:•DOEDESCWorldEnergyConference•OPISFleetFueling•NYMEX•FuelManagementUniversity•NATSO•ATA•AAA•DairyDistribution•eyeforEnergyeCommerce•OPISSupplySummit•CIOMA•AmericanSocietyofMechanicalEngineers•AmericanSocietyofLubricatingEngineers•AmbrustAviation•NACHA.
OvertheyearsEMIhasdevelopedaseriesofintensivecoursescoveringallaspectsofEnergyfromproductionallthewaytomanagingtheimpactpriceandvolatilityonthemarginofend-users,resellers,traders,marketers,shippers,retailersandrefiners.Ourinstructorshavehadtheprivilegetoinstructthousandsofprofessionalsrepresentingallaspectsoftheenergyindustry,includingeverymajoroilcompany(i.e.ExxonMobil,BP,Shell,Equilon,Motiva)majorpowerutilities(i.e.Sempra,EdisonMission,Berkley,TorontoHydro,Dominion,Conectiv)smallmarketers(i.e.Sprague,Getty,SouthernCounties,WesternPetroleum)truckingfleetsfrom50to10,000(i.e.UPS,U.S.PostalService,Yellow,Pepsi,Werner),gasoline-poweredfleetshyper-markets(i.e.ThePantry,Wawa,BJsWholesale)andmanyfortune500energyconsumers.
EMIexpertsarefrequenteditorialcontributorstopetroleummagazines&aretrustedbytoday’sleadingnewssources.
Ourexpertshavebeenfeaturedin:
FuturesMagazine• TheWallStreetJournal•USAToday• TheNewYorkTimes• TheWashingtonPost•JournalofCommerce•CNN•NBC•CBS•ABC• Bloomberg•Reuters
Learn From the Experts that Experts Trust
An Energy Management Institute Training Program
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3Easy Ways to Register$1,995forfullprogram
Thisfeeincludesexpertinstruction,coursematerialsandlunch.
Best Practices & Financial RiskApril 9-10, 2014 -- Thomson Reuters -- New York, NY
Discount for Additional Attendees
2nddelegate:$1,7953rddelegate:$1,600
Refund/Cancellation Policy
Attendeesmayrescheduleforadifferentdateorcoursewithnopenalty.AttendeesmaysubstituteacolleagueinplaceofthemselvesaslongaspriornoticeisgiventoEMI.Coursefeesare100%refundableupto14dayspriortocoursedate,80%refundableupto5dayspriortocoursedateand50%refundableupto2dayspriortocoursedate.Cancellationsarenon-refundablethereafter.
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Thomson Reuters 195BroadwayEastSkybox,5thfl.NewYork,NY10007
Millenium Hotel55ChurchStreetNewYork,NY10007212.693.2001http://www.hilton.com
Gild Hall Hotel – Wall Street (0.3milesSE)15GoldStreetNewYork,NY10006212.232.770http://www.thompsonhotels.com/hotels/nyc
New York Marriott Downtown(0.4milesSW)85WestStreetNewYork,NY10038212.385.4900http://www.marriott.com/NewYorkCity
1CallPMAConferenceManagementat201.871.0474orsendemailto:register@pmaconference.com.
2 Complete&faxthisformto253.663.7224.
3Complete&mailtheformto:PMAConferenceManagement,POB2303,FallsChurch,VA22042.
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