Collateral Management for Financial Institutions

Date: 21^st January 2027
Venue: DoubleTree by Hilton Kuala Lumpur

Classroom Training

COURSE INTRODUCTION

Effective collateral management has become a strategic priority for banks operating in increasingly complex funding, liquidity, and regulatory environments. Financial institutions are expected not only to mitigate counterparty credit risk effectively, but also to optimize collateral usage across treasury, liquidity, derivatives, and financing activities while maintaining strong governance and operational controls.

This intensive 1-day course has been designed for practitioners from both conventional and Islamic banks. The course provides a practical and strategic understanding of collateral management across its full lifecycle, covering collateral usage in repo and secured funding transactions, derivatives and counterparty credit risk management, treasury liquidity management, and the regulatory capital treatment of collateral. The course also explores how Islamic banking structures influence collateral management practices. Particular attention is given to Shariah-compliant collateral (Rahn), the use of Sukuk as eligible collateral, and restrictions on rehypothecation and collateral usage. In addition to core operational workflows such as margining, settlement, reconciliation, and dispute handling, the course introduces delegates to collateral optimization techniques and practical decision-making frameworks. Numerical examples are used extensively to demonstrate competing collateral demands, opportunity costs, and liquidity considerations.

The course combines conceptual explanations with practical examples, worked numerical illustrations, and interactive discussion. Delegates will work through collateral optimization examples demonstrating the trade-offs between funding cost, liquidity preservation, and the impact of haircuts. Examples and discussions will include both conventional and Islamic banking perspectives to ensure relevance across the Malaysian banking sector. The course is highly practical and interactive, blending conceptual understanding with worked examples and case studies relevant to treasury, risk management, financing teams and collateral management practitioners.

Key Takeaways & Learning Objectives

Understand the economic purpose and strategic importance of collateral management
Learn how collateral supports treasury funding, liquidity, and counterparty credit risk mitigation
Understand margining mechanics, collateral eligibility, and haircuts
Explore collateral optimization techniques using practical numerical examples
Understand regulatory capital requirements for collateral
Learn how collateral practices differ in Islamic banks due to Shariah requirements

AGENDA

Session 1: Foundations of Collateral Management

What is collateral and why is it important?
Economic purpose of collateral and credit risk mitigation
Overview of the collateral lifecycle
Collateral calls, allocation, settlement, reconciliation, and reporting
Key risks: credit, liquidity, legal, operational, and valuation risk
Collateral usage across treasury, derivatives, secured funding, and corporate banking
Roles and responsibilities across treasury, risk, operations, legal, and compliance
Overview of bilateral and triparty collateral structures
What is Bank Negara’s position on collateral management?

Session 2: Margining, Haircuts, and Operational Processes

Exposure measurement and collateral valuation
Thresholds, Minimum Transfer Amounts (MTAs), and call frequency
Margin call workflow: calculation, validation, communication, and settlement
Collateral substitution and dispute management
Operational controls, reconciliations, and exception handling
Operational challenges in treasury and derivatives collateral management

Session 3: Collateral Optimization and Treasury Applications

What is collateral optimization?
Competing collateral demands across treasury, derivatives, liquidity, and financing
Managing collateral under liquidity and funding constraints
Opportunity cost, haircut cost, and liquidity-buffer impact
Optimization decision framework and allocation strategies
Numerical optimization examples using cash, government Sukuk, and corporate Sukuk

Session 4: Islamic Banking Considerations

Shariah recognition of collateral (Rahn)
Key Shariah requirements and restrictions on collateral usage and rehypothecation
Collateralization in Murabahah, Ijarah, Salam, and Istisna transactions
Collateralization of Islamic risk management and hedging structures
Use of Sukuk as eligible collateral

Session 5: Collateral Management and Regulatory Capital

Regulatory objectives
Overview of regulatory treatment of collateral
Simple versus Comprehensive approaches for collateral recognition
Haircuts and partial collateralization
Capital relief examples and collateral impact on risk weighted assets

Course Wrap-up

EXPERT COURSE DIRECTOR

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 microeconomics and worked in the GCC for 15 years in retail and 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 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 derivatives products used by Gulf-regional corporations to hedge FX and interest rate 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 risk-based pricing of the bank’s Islamic financing products. Dr. Ken is currently an Assistant Professor of Finance in the UK. He has published quantitative finance articles in peer-reviewed academic journals including the Journal of International Financial Markets Institutions and Money, the Journal of Risk, and Economics Letters, and during his earlier career, taught CFA and FRM professional certifications as a pastime for the Bahrain Institute of Banking and Finance.

WHO WILL BENEFIT?

This course has been designed for practitioners involved in collateral management, treasury, treasury operations, risk, and financing functions. Professionals most likely to directly benefit from the course include:
- Treasury and liquidity management professionals
- Collateral management and margining teams
- Repo and secured funding practitioners
- Market and counterparty credit risk managers
- Treasury operations and settlements teams
- Regulatory capital specialists
- Custody and collateral operations teams
- Compliance and internal audit professionals
- Central bank regulators and supervisors

REGISTRATION

*Please note there is a fee for attending this program. Please contact us for more details.

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By completing, signing and revised, sent separately us this registration form you are conﬁrming participants on the program. You are also conﬁrming your understanding of our Booking, Payment and Cancellation Policy.

Cancellation Policy: If participants cannot attend the program, replacement participants are always welcome. Otherwise, participants must notify us any of cancellations or requests to transfer to a diﬀerent program at least 14 days before the program date to be eligible for a refund, less a 5% administration on fee. Participants who cancel within 14 days of the program start date are liable to pay the full program fee and no refunds will be given. Instead fees will be converted to a REDmoney Seminars voucher equivalent to the original fee, less a 10% administration charge. This voucher is transferable within your organization and must be redeemed within one year of issue or become void. If a program is postponed for whatever reason registrations and fees will be automatically transferred to the new program date. Participants who wish to transfer to a diﬀerent program will be subject to the same terms as above and charged any diﬀerence in fees. No refunds or program vouchers will be issued for a no-show.
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FEE

Fee per participant: RM3,250/US$850

Please note that the Ringgit price is applicable to Malaysia-domiciled participants only. Discounts are available for group bookings. Please contact us for more details.

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.
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