MiFID II - Derivatives (EN)

The persons concerned by the Training Programme are all persons placed under the authority of a professional (or acting on his behalf) subject to prudential supervision by the CSSF, i.e. individuals providing investment advice (“Advisory profile”) or information (“Information profile”) on financial instruments, investment services or ancillary services to clients.

This module is part of the MiFID II Certification.

Based on the the ISO definition of derivatives specifying that a derivative instrument is a financial contract the value of which is “derived” from the value of underlying instruments or commodities, the content of module 5 on derivatives focuses on:

• Main characteristics of derivatives (based on ISO 10962)
  • Types of derivatives - Exchange-listed derivatives: Options, futures; OTC derivatives: Forwards, swaps, OTC options, others
  • Attributes of derivatives - Type, underlying assets, delivery, standardised/non-standardised
  • Pricing of derivatives - Exchange-listed derivatives (premiums, margin accounts, margin calls), OTC derivatives (swap prices, valuation of forwards)
  • Factors influencing the performance of a derivative - Price of the underlying asset, volatility, liquidity, macroeconomic factors
  • Costs associated with transactions and services involving derivatives - Brokerage, exchange fees, transaction fees, premiums, margin calls, collateral
  • Structure of the market for derivatives
  • Types of markets (regulated, OTC) - Exchange-listed derivatives, OTC derivatives, derivatives on MTFs, OTFs, SIs
  • Market players - Hedgers, dealers, speculators, arbitrageurs, derivatives exchanges, executing brokers, clearing houses, clearing brokers
• Financial instruments as investments
  • Market practice - Hedging, speculation, arbitrage, dealing, leverage
  • Main risks - Market risk, commodities risk, currency risk, liquidity risk, operational risk
  • Tax aspects - Withholding tax, capital gains tax, transaction tax, tax reclamation
  • Market forces that impact performance - Macroeconomic factors, price of the underlying asset, volatility, liquidity, interest rates, currencies
  • Understanding instrument’s performance - Market perspective, macroeconomic factors, volatility, liquidity
  • Documentation related to the instrument - Contract specifications, market

Experienced professional specialists selected on the basis of their in-depth knowledge of markets and financial products under MiFID rules I and II, and ESMA criteria.