Derivatives Clearing Organizations

Since The Wall Street Reform and Consumer Protection Act(Dodd-Frank) was passed in 2010, tremendous changes have been taking place in US and other financial centers. One of the major changes has been that most vanilla Over the Counter (OTC) derivatives have to be transacted through clearing entities. This development has significant risk management and compliance implications for financial institutions as well as for any corporation transacting derivatives. Understanding the mechanics and risks of Derivatives Clearing Organizations as well as how they are regulated is very important for any derivatives market participant. This two day course will consist of an interactive lecture and cases. Additionally, relevant articles highlighting recent trends in risk management will also be used for discussions.

Target Audience

Front, middle, and back office professionals, regulators, risk managers, auditors, and compliance officers. 

Learning Objectives

After completing this module, you'll be able to:

  • Describe the role of a Derivatives Clearing Organization (DCO)
  • Identify the DCO's core principles and how they are applied
  • Discuss best practices expected at a DCO
  • Evaluate key requirements for good risk management at a DCO

Course Syllabus

I. Structure and Responsibilities of a DCO

  • Identify how a DCO should function:
  • Acceptance of transactions for clearing
  • Daily reconciliation of transactions
  • Daily settlements
  • Guaranty of financial obligations

Case Study

III. Clearing Requirements for Swaps

  • Describe requirements to clear swaps
  • Do they apply to swaps that existed before Dodd-Frank?
  • Identify the steps to apply for CFTC and/or SEC permission
  • Discuss whether swaps can be transacted if not cleared
  • Define purpose of a Swaps Date Repository (SDR)

Case: How does ICE clear credit default swaps?


II. DCO Core Principals

  • Enumerate DCO core principles
  • Discuss challelnges complying with the core principles

Articles for discussion

IV. Potential Risks of DCOs

  • Define and discuss call risk
  • Idenfity the Internationals Swaps and Derivatives Association's (ISDA) with Dodd-Frank's requirement for DCOs
  • Discuss what is needed for effective risk management in DCOs


No sessions currently available. Contact client services to get the next available date.


Professional Credits:
CPE Credits 14
$1,989 USD
Duration 2 Days
Advance Preparation
No advance preparation required.
This course has no prerequisites.
Instructional Method