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Islamic Derivative Instruments
A Two-Part Online Training Program

Date:  25th & 26th January 2021

COURSE INTRODUCTION

WHY THIS COURSE?

Since their inception, Islamic derivatives have received mixed reviews. Some Islamic banks avoid them, whilst others have embraced them. These products remain controversial, although the trend is moving towards more widespread acceptance. Islamic banks which can take advantage of their powerful risk management potential to transfer-away unwanted risks, whilst controlling their use for legitimate purposes, are able to achieve higher risk-adjusted returns by focusing on their core activities, including most importantly, the provision of credit.

This course is primarily for Islamic bankers, but also conventional bankers looking to structure Shariah compliant instruments. The program provides a clear understanding of how Islamic derivatives are structured, and how they are priced, executed and governed. The course will be highly valuable for Islamic bankers whose roles require a thorough appreciation and working knowledge of these products, as well as those seeking a deeper understanding of how Islamic derivatives are applied in practice to manage risk, and/or to generate income.

The course will also include a high level of interactive discussion, analysis of examples and case studies, and thorough instruction in multiple aspects of Islamic derivatives with learnings that can be applied immediately.

  • KEY HIGHLIGHTS
    • Understand Islamic derivatives structures and pricing
    • Understand how Islamic derivatives can be used to hedge risk and/or generate income
    • Learn how Islamic derivatives transactions are governed in practice

Fee

1 participant: RM1,450/$375
2 participants: RM2,900/$750
3 participants: RM4,350/$1,125
4 participants: RM5,800/$1,500
5 participants: RM7,250/$1,875

Early Payment Discount: Payments made on or before 18th January 2021 will receive a 7.5% discount. Payments received after this date will be re-invoiced for the full amount.

In-house/group training

If you are looking for an in-house training program or wish to send a group to an existing public program, kindly please contact Andrew Tebbutt at [email protected] or +603 2162 7802.
Learn More

Send me Details

For enquiries please contact:

Normariya Sariman
Account Manager, REDmoney Seminars
[email protected]
Direct Line: +603 2162 7800 ext 44

Ramesh Kalimuthu
Events Sales Director
[email protected]
Direct Line: +603 2162 7800 ext 65
Fax: +603 2162 7810

For sponsorship & speaking opportunities:

Andrew Tebbutt

Managing Director
[email protected]
Direct Line: +603 2162 7802

For marketing and media enquiries

Govina Selvanthran

Marketing Manager
[email protected]
Direct Line: +603 2162 7800 ext 22

Send me Details

Who Will Benefit?

  • This course has been specifically designed for the benefit of:
    • Chief Risk Officers, Chief Financial Officers, Chief Operating Officers
    • Financial risk managers, risk analysts, financial analysts
    • Treasurers, treasury dealers, middle office, and ALM professionals
    • Credit managers, credit administrators, credit portfolio managers
    • Asset managers
    • Operations personnel
    • Internal and regulatory auditors
    • Supervisors, regulators and risk standard setters

Fee

1 participant: RM1,450/$375
2 participants: RM2,900/$750
3 participants: RM4,350/$1,125
4 participants: RM5,800/$1,500
5 participants: RM7,250/$1,875

Early Payment Discount: Payments made on or before 18th January 2021 will receive a 7.5% discount. Payments received after this date will be re-invoiced for the full amount.

In-house/group training

If you are looking for an in-house training program or wish to send a group to an existing public program, kindly please contact Andrew Tebbutt at [email protected] or +603 2162 7802./p>

COURSE INTRODUCTION

WHY THIS COURSE?

Since their inception, Islamic derivatives have received mixed reviews. Some Islamic banks avoid them, whilst others have embraced them. These products remain controversial, although the trend is moving towards more widespread acceptance. Islamic banks which can take advantage of their powerful risk management potential to transfer-away unwanted risks, whilst controlling their use for legitimate purposes, are able to achieve higher risk-adjusted returns by focusing on their core activities, including most importantly, the provision of credit.

This course is primarily for Islamic bankers, but also conventional bankers looking to structure Shariah compliant instruments. The program provides a clear understanding of how Islamic derivatives are structured, and how they are priced, executed and governed. The course will be highly valuable for Islamic bankers whose roles require a thorough appreciation and working knowledge of these products, as well as those seeking a deeper understanding of how Islamic derivatives are applied in practice to manage risk, and/or to generate income.

The course will also include a high level of interactive discussion, analysis of examples and case studies, and thorough instruction in multiple aspects of Islamic derivatives with learnings that can be applied immediately.

  • KEY HIGHLIGHTS
    • Understand Islamic derivatives structures and pricing
    • Understand how Islamic derivatives can be used to hedge risk and/or generate income
    • Learn how Islamic derivatives transactions are governed in practice

AGENDA AND FORMAT

Each session will be interactive in a seminar format, with participants encouraged to engage with questions throughout.

PLATFORM

This two-part training program will be delivered online through a stable, secure and free-to-access platform. The program itself will be delivered through lectures, worked examples and case studies in order to ensure a detailed and practical understanding of the program content. Participants will have plenty of opportunity to ask questions and interact with the program director. Login details and program materials will be sent to participants upon receipt of payment

AGENDA

Day 1: Products, Hedging, and Sales

Islamic Derivatives Products
  • What is a derivative?
  • What is the difference between conventional and Islamic derivatives?
  • Linear versus non-linear derivatives: forward versus option
  • Shariah compliant structuring blocks: Wa’ad and Murabaha
  • Shariah compliant structures:
    • FX Forwards
    • FX Options
    • Profit rate swaps
    • Currency swaps
  • Quiz
Using Islamic Derivatives to Hedge Risks
  • How do banks use derivatives to hedge their own risks?
    • Interest rate risk in the banking book (IRRBB)
    • Earnings at risk and net interest margin (NIM) volatility
    • FX risk management
Structuring Client Derivatives Solutions
  • How do banks use derivatives to generate income?
  • What is a back-to-back trade?
  • When should a bank retain residual risk and how can banks limit their potential losses?
  • What are the steps in selling derivative solutions to clients?
  • Quiz

Day 2: Pricing, Governance and Operations

Derivatives Pricing with Numerical Examples
  • Currency
    • FX forwards
    • Currency swaps
    • FX Options
  • Interest rates
    • Forward rate agreements
    • Profit rate swaps
  • Quiz
Understanding Derivatives Governance
  • What departments are involved in derivatives transactions and how are responsibilities allocated?
    • Treasurer versus dealers
    • Treasury operations
    • Middle office
    • Risk management
    • Financial control
    • Legal department
    • Shariah advisors
  • How is derivatives pricing managed leading up to, and at the time, of dealing?
  • How is derivatives risk controlled after transacting?
    • Counterparty credit risk and derivatives risk limits
    • Back-to-back deals and netting arrangements
    • Valuation and cash collateralization
  • Quiz
Treasury Operations for Derivatives Transactions
  • Reducing operational risk during deal execution: importance of sequencing
  • Confirmation: getting it right
  • Settlement
  • Important Documentation issues: ISDA, IIFM Master Agreement
  • Quiz

EXPERT COURSE DIRECTOR


Dr Ken Baldwin 
Former Director, Financial Policies & Planning, Islamic Development Bank

Dr. Ken Baldwin has worked as a practitioner in banking and finance for over 25 years in senior positions spanning the front and middle offices. Having graduated from Oxford University with a first-class honors degree in Physics in 1989, he qualified as a Chartered Accountant with PWC, before joining UBS, and then later Credit Suisse, in derivatives risk and control functions based in London.

He gained a PhD in the microeconomic theory of risk sharing in Islamic contracts, and worked in the GCC for 15 years in Islamic retail and Islamic investment banks. Whilst at Abu Dhabi Islamic Bank, Dr. Ken built an ALM analytic technology platform capable of capturing liquidity and interest rate risks inherent in the many varied Islamic financing products used at retail and corporate levels. He then moved to take up the position of MENA Regional Head of Quantitative Analysis for Citigroup. At Citicorp, Dr. Ken worked on structuring complex products used by Gulf-regional corporations to hedge FX and interest risks. Still residing in Bahrain, Dr. Ken then joined Investcorp, where he worked on the risk due diligence of corporate private equity and real estate private equity transactions and portfolio management. After leaving Investcorp, he set up the risk management department for venture capital bank, providing Basel III compliance and deal analysis for the bank. He then operationalized a new Islamic investment bank as its Chief Operating Officer for 3 years, before his most recent industry role at the Islamic Development Bank, where he set up and ran a new department tasked with developing Financial Policies and Planning underpinned by robust financial analytic tools and methodologies designed specifically for the IDB. Dr. Ken is currently a senior university lecturer in finance in the UK. He has published quantitative finance articles in peer-reviewed academic journals including the Journal of Risk, and during his earlier career, taught CFA and FRM professional certifications as a pastime for the Bahrain Institute of Banking and Finance.

Ken is a British Muslim.

WHO WILL BENEFIT?

  • This course has been specifically designed for the benefit of:
    • Chief Risk Officers, Chief Financial Officers, Chief Operating Officers
    • Financial risk managers, risk analysts, financial analysts
    • Treasurers, treasury dealers, middle office, and ALM professionals
    • Credit managers, credit administrators, credit portfolio managers
    • Asset managers
    • Operations personnel
    • Internal and regulatory auditors
    • Supervisors, regulators and risk standard setters

For enquiries please contact:

Normariya Sariman
Account Manager, REDmoney Seminars
[email protected]
Direct Line: +603 2162 7800 ext 44

Ramesh Kalimuthu
Events Sales Director
[email protected]
Direct Line: +603 2162 7800 ext 65
Fax: +603 2162 7810

For sponsorship & speaking opportunities:

Andrew Tebbutt

Managing Director
[email protected]
Direct Line: +603 2162 7802

For marketing and media enquiries

Govina Selvanthran

Marketing Manager
[email protected]
Direct Line: +603 2162 7800 ext 22

About Us

REDmoney Events designs, organizes and hosts industry-leading conferences, forums, roadshows and seminars focusing on the Islamic financial markets across a global, regional and national level.

+603 2162 7800
[email protected]

Our Publications

  • Islamic Finance news
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