School of Regulatory Compliance (EU): PART I by Storm-7

s c h o o l

OF REGULATORY COMPLIANCE (EU)

ABOUT THE SCHOOL SHOULD I ATTEND? The S7C School of Regulatory Compliance has been specially designed to provide in-depth insight into the structure, workings, and operational practicalities of the individual elements of a host of new EU regulatory frameworks. The individual regulatory compliance modules are delivered by a Senior Consultant from the S7C team of industry acknowledged experts. Storm-7 Experts are able to draw upon a considerable wealth of regulatory compliance experience across legal, financial, and consulting sectors.

In addition to the insights gained from the in-session presentations and discussions you will be provided with a very comprehensive School Training Manual which can you use for reference purposes within your organisation. The School will equip you with superior industry knowledge and understanding and will allow you to cement your reputation within the field of European regulatory compliance.

● Can you clearly see the full breadth of the new EU Directives and Regulations programmes which are now being implemented in the EU? ● Do you fully comprehend the monitoring and sanctions powers which national competent authority regulators have acquired with the advent of new EU Directives and Regulations frameworks? ● Do you fully understand the interconnectivity of the individual EU Directives and Regulation frameworks, in order to streamline and enhance existing internal regulatory compliance systems? ● Do you fully understand the strategic business threats and opportunities which the EU Directives and Regulation frameworks will present for your organisation? ● Have you identified key regulatory timelines, in order to put in place appropriate and effective roadmaps, workflows, and systems, with a view to successfully achieving operational compliance within your organisation? ● Do you fully understand the operational issues and potential conflicts which the new Directives and Regulations frameworks will generate within your organisation? ● Can you afford <10% of your business turnover, withdrawal of your license, and damage to reputation (organisational and personal), invoked by national competent authority regulators for breaching new EU Directives and Regulations frameworks?

ABOUT THE EXPERT TRAINER

ATTENDEES:

Banking & financial services professionals.

MATERIALS:

Comprehensive Hard Copy Training Course Manual and Training Reference Materials, 4 x Electronic PowerPoint Presentations.

FIXED MODULES:

4 modules are provided per day.

EXPERT TRAINER Rodrigo Zepeda is Co-Founder and Managing Director of Storm-7

Consulting. He is an expert consultant who specialises in derivatives and banking and financial services law, regulation, and compliance. He is an expert in a very broad range of regulatory compliance frameworks such as FATCA, the OECD CRS, MiFID II, MAD 2 MAR, PSD2, CRD IV, Solvency II, OTC Derivatives, CCP Clearing, PRIIPs, BRRD, AML4, and the GDPR. He holds a LLB degree, a LLM master’s degree in international and Comparative Business Law and has passed the New York Bar Examination. He was an Associate (ACSI) of the Chartered Institute for Securities & Investment from 2004 to 2014 and is now a Chartered Member (MCSI). He has created and delivered numerous conferences and training courses around the world such as ‘FATCA for Latin American Firms’ (Santo Domingo, Dominican Republic, Panama City, Panama), ‘MiFID II: Regulatory, Risk, and Compliance (London), and ‘Market Abuse: Operational Compliance’ (London), ‘AEOI (FATCA & CRS)’ (Manama, Bahrain). He has also delivered numerous In-House Training Courses around the world to major international financial institutions such as The Abu Dhabi Investment Authority (MiFID II: Operational Compliance, Abu Dhabi, the United Arab Emirates), the United Nations Principles of Responsible Investment (MiFID II: Final Review, London), CAF, the Development Bank of Latin America (Swaps and Over-the-counter Derivatives, Lima, Peru), Rothschild Investment Management (UK) Limited (AEOI (FATCA & CRS), London) and Bethmann Bank AG (MAD 2 MAR, Frankfurt). He is a Reviewer for the Journal of Financial Regulation and Compliance and has also published widely in leading industry journals such as the Capco Institute’s Journal of Financial Transformation, the Journal of International Banking Law and Regulation, as well as e-books on derivatives law. Noted publications include “Optimizing Risk Allocation for CCPs under the European Market Infrastructure Regulation”; “The ISDA Master Agreement 2012: A Missed Opportunity”; “The ISDA Master Agreement: The Derivatives Risk Management Tool of the 21st Century?”; “To EU, or not to EU: that is the AIFMD question”; and “The Industrialization Blueprint: Re-Engineering the Future of Banking and Financial Services?”.

ABOUT STORM-7

Storm-7 Consulting is an international consulting company that provides premier intelligence, insight and support to global financial institutions. We provide cuttingedge conferences, events, public training courses, and in-house training courses to leading firms globally. We provide expert regulatory compliance training covering areas such as the General Data Protection Regulation (GDPR), the revised Markets in Financial Instruments Directive (MiFID II), Automatic Exchange of Information (Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS), revised Market Abuse Directive (MAD 2), Market Abuse Regulation (MAR), the revised Capital Requirements Directive (CRD IV), Packaged Retail and Insurance Based Investment Products (PRIIPs), Solvency II, the revised Payment Services Directive (PSD 2), Central Counterparty (CCP) Clearing, Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF), Stress Testing, and the Senior Managers and Certification Regime. We provide unique and highly innovative marketing services to firms operating in the banking, financial services, Regulatory Technology (RegTech), and Financial Technology (FinTech) sectors. We have designed our training events and materials to significantly enhance employeesâ&#x20AC;&#x2122; skills and knowledge levels in regulatory compliance frameworks. We also seek

to provide a unique, comprehensive, and superior blend of legal, financial, strategic, operational, and technological perspectives in our events. We have received enquiries and bookings from leading firms around the world, such as the Abu Dhabi Investment Authority, Rothschild Investment Management (UK) Limited, Bethmann Bank AG, Dubai Financial Market, CAF the Development Bank of Latin America, the Central Bank of Ireland, the Central Bank of Russia, APG Asset Management, Royal London Asset Management, Brandes Investment Partners, Eversheds, Erste Group, Millenium Information Technologies, Deutsche Bank, Bethmann Bank AG, ICBC Standard Bank, Gulf International Bank, Raiffeisen Bank International AG, and BGC Partners. We have collaborated with firms around the world, such as the United Kingdom Financial Conduct Authority, Thomson Reuters, Sopra Steria, Sungard AS, Capco, OTC Partners New York, IHS Markit, Eze Castle Integration, ICMA Centre, Sybenetix, Heriot-Watt University, J.P. Morgan Asset Management, Custom House Global Fund Services, Cass Business School, RiXtrema, Solum Financial, Objectivus Financial Consulting, D2 Legal Technology, Eurekahedge, Financial IT, HedgeConnection, Alpha Journal, ATMonitor, HF Alert, and CrowdReviews.

● Case Study: LCH.Clearnet Swapclear.

MIFID II COMPLIANCE AND TECHNOLOGY

MODULE 1:

MIFID II MARKET STRUCTURE, TRADE AND TRANSACTION REPORTING ● MiFID I, MiFID II, and MiFID III Directional Timeline, Systematic Internalisers, Organised Trading Facilities (OTF), Multilateral Trading Facilities (MTFs). ● Trade Execution Update, Data Publication, Consolidated Tape, Consolidated Tape Provider. ● MiFIR Reporting Framework, Reporting Obligations, Extended Scope of Financial Instruments, Approved Reporting Mechanism (ARM) Framework, Data Reporting Services Providers (DRSPs), ARM Providers.

MODULE 2:

ORGANISATIONAL REQUIREMENTS, INVESTOR PROTECTION, AND SUITABILITY AND APPROPRIATENESS

DAY 1:

This training course is one of the most cost-effective ways to comprehensively understand the new and highly complex revised Markets in Financial Instruments Directive (MiFID II) and Markets in Financial Instruments Regulation (MiFIR). The MiFID II Compliance and Technology training course is not simply about theoretical knowledge and training, it seeks to provide attendees with operational and strategic insight into MiFID II compliance and operational requirements. The training course will provide the ideal mix between theory and operational practice, as well as reviewing a range of MiFID II technologies. MiFID II is not just about compliance, it represents a key opportunity for firms to strategically differentiate themselves and capitalise on new and emerging financial markets and investment opportunities.

● Client Classification, Investment Suitability and Appropriateness. ● Product Governance, Sales Targets, Remuneration Policies, Independent Advice, Conflicts of Interest, Exemptions, Compliance Function, Record Keeping. ● The Third Country Framework, Equivalence Assessment, Third Country Firm Legal and Taxation Considerations.

MODULE 3:

MIFID II COMPLIANCE AND TECHNOLOGY – PART I ● MiFID II Best Execution Requirements, Best Execution Technologies, Best Execution and Transaction Cost Analysis. ● MiFID II Recording of Communications (Investment Firm Client Obligations Strategic Considerations). ● A Review of MiFID II Best Execution Technologies and MiFID II Recording of Communications Technologies.

MODULE 4:

MIFID II COMPLIANCE AND TECHNOLOGY – PART II ● MiFID II Suitability and Appropriateness (Assessing Suitability, Assessing Appropriateness, Guidelines). ● MiFID II Research Unbundling, Research Payment Accounts, Broker Voting, Post-MiFID II Commission Sharing Agreements, Research Platforms, Research Technology Providers. ● A Review of MiFID II Research Unbundling Technologies and MiFID II Compliance Technologies.

MAD 2 MAR (MARKET ABUSE): OPERATIONAL COMPLIANCE MODULE 1:

DAY 2: This training course will provide attendees with comprehensive instruction on the new European Union (EU) market abuse regulatory framework governed by the European Securities and Markets Authority (ESMA). It will train attendees on the legal obligations and operational framework for the new Criminal Sanctions for Market Abuse Directive (MAD 2) (Directive 2014/57/EU) and Market Abuse Regulation (MAR) (Regulation No 596/2014). The course will guide attendees through new obligations for trading venues (Multilateral Trading Facility (MTF), Organised

Trading Facility (OTF), Emissions Allowances), issuers, financial services firms, and Persons Discharging Managerial Responsibilities (PDMRs). Attendees will obtain training on monitoring, detecting, and identifying suspicious orders and transactions under the new MAD 2 and MAR operational framework, and will also be guided through the new Buy-Back Programmes, Stabilisation Measures, Accepted Market Practices and Market Soundings provisions.

MODULE 3:

THE MAD 2 (DIRECTIVE 2014/57/EU) AND MAR (REGULATION NO 596/201/4) OPERATIONAL FRAMEWORK

MAR OPERATIONAL PRACTICES II: ACCEPTED MARKET PRACTICES (AMP) AND MARKET SOUNDINGS (MS)

● MAD 2 FRAMEWORK: (1) new minimum rules for criminal sanctions and criminal penalties and liability for natural and legal persons; (2) new obligations for trading venues (MTFs, OTFS, Emissions Allowances) and issuers; and (3) application to spot commodity contracts and transactions; and (4) benchmark manipulation. ● MAR FRAMEWORK: (1) New financial instruments covered; (2) obligations and offences (issuer disclosure of inside information; market soundings; transactions by persons discharging managerial responsibilities; suspicious transactions reporting; algorithmic and high-frequency trading); and (3) New whistleblowing obligations, reporting, protections, and financial incentives.

● AMP FRAMEWORK: (1) Establishing legitimate reasons and conforming with accepted market practice; (2) AMP Competent authority criteria (transparency, safeguards, market liquidity and efficiency, trading mechanism, integrity of related markets, investigations, market structural characteristics); (3) AMP Level II RTS compliance; (4) Competent authority reviews. ● MS FRAMEWORK: (1) MS operational framework (MAR, Article 11); (2) Procedural conditions and obligations for market participants (written records, consent, obligations to inform); (3) ESMA MS Guidelines; (4) Level II RTS and Implementing Technical Standards (ITS) on appropriate arrangements, procedures and record keeping requirements.

MODULE 2:

MAR OPERATIONAL PRACTICES I: SUSPICIOUS TRANSACTION AND ORDER REPORTS (STORS), BUY-BACK PROGRAMME (BBP), AND STABILISATION MEASURES ● STOR FRAMEWORK: (1) STOR content; (2) reasonably suspicious orders (RSOs) (detection, level of suspicion, personnel training; cancellation and modification of orders); (3) Level II Regulatory Technical Standards (RTS) obligations (general requirements, prevention, monitoring, detection, training, reporting, timing, content, templates). ● BBP AND STABLISATION FRAMEWORK: (1) BBP exemption (trading in own shares); (2) qualifying operational conditions (disclosure, reporting, limits); (3) qualifying programme conditions; (4) stabilisation of securities exemption; (5) qualifying operational conditions (duration, disclosure and notification, price limits); and (6) BBP and stabilisation measures Level II RTS compliance.

MODULE 4:

MAD 2 AND MAR OPERATIONAL COMPLIANCE PROGRAMMES ● COMPLIANCE: (1) MAD 2 and MAR compliance programmes; and (2) modification of existing Information Technology (IT) infrastructures. ● NEW EXEMPTIONS: (1) trading in own shares in buy-back programs; (2) trading in securities for the stabilization of securities exception and eligibility conditions; (3) public authorities in pursuit of monetary, exchange rate, or public debt management policy; (4) EU Agricultural Policy and Climate Policy; (5) Chinese Walls. ● NEW POWERS AND SANCTIONS: (1) Minimum Supervisory and Investigatory Powers (document and data access; interviews; dawn raids, inspections, recordings, data traffic, telecommunications operators, temporary prohibitions); (2) Administrative Sanctions and Measures; and (3) Financial Penalties (individuals, companies).

CCP CLEARING, RISK MANAGEMENT, RECOVERY AND RESOLUTION (EU)

MODULE 1:

THE CENTRAL COUNTERPARTY (CCP) CLEARING MODEL ● An Overview of the CCP Clearing Model (Functional Definition; CCP Ownership; CCP Advantages and Disadvantages; Novation; Cleared Products; Margining; Multilateral Netting; Risk and Default; Loss Mutualisation; Auctions; Portability). ● CCP Regulation v. ‘Too Big To Fail’. ● Case Study: LCH.Clearnet Swapclear.

MODULE 2:

THE EU CCP REGULATORY FRAMEWORK

DAY 3:

This training course will provide Attendees with a comprehensive understanding of central counterparty (CCP) clearing models and operational frameworks in the European Union (EU). Attendees will receive in depth instruction on the EU CCP regulatory framework governed by the European Securities and Markets Authority (ESMA) and the European Market Infrastructure Regulation (EMIR). Attendees will be able to practically compare a range of key issues affecting CCP offerings in the EU. The training course will also provide deep coverage of margining practices, clearing models and agreements, operational risks, and risk management frameworks affecting CCPs. Finally, Attendees will be guided through the intricacies of effective CCP Recovery and Resolution Plans, and CCP Default Management, Recovery and Continuity Frameworks.

● ESMA and CCP authorisation, recognition and supervision in the EU. ● CCP operating, clearing and reporting obligations under the EMIR framework, CCP Cleared Products, Reporting, Interoperability, Third Country CCPs. ● Basel III capital treatment/risk weightings for Qualifying and Non-Qualifying CCPs.

MODULE 3:

CCP CLEARING MODELS AND AGREEMENTS (DIRECT AND INDIRECT) ● CCP and Client Clearing Documentation and common negotiated provisions (Margin, Termination Events, Pre-Default Porting). ● Customer clearing under modified Master Agreements. ● An Overview of ISDA® Clearing Agreements and Addendums (EU International Swaps and Derivatives Association (ISDA)/Futures Industry Association (FIA)Cleared Derivatives Execution Agreement + Addendum).

MODULE 4:

DESIGNING EFFECTIVE CCP DEFAULT MANAGEMENT, RECOVERY AND CONTINUITY FRAMEWORKS ● The 2012 Committee on Payments and Market Infrastructure - Organization of Securities Commissions (CPMI-IOSCO) Principles for Financial Market Infrastructure. ● The ISDA® Principles for CCP Recovery and CCP Default Management, Recovery and Continuity. ● Developing new Total Loss Absorbing Capacity (TLAC), Bail-inable debt standards for CCPs, and Developing Standardised Regulatory Stress Testing and Disclosure.

ANTI-MONEY LAUNDEING (AML) & COUNTER THE FINANCING OF TERRORISM (CFT) OPERATIONAL COMPLIANCE SESSION 1:

DAY 4:

With today’s modern advancements in global banking and financial services technologies and interconnectivity, implementing effective, robust, and proportional Anti-Money Laundering (AML) and Counter the Financing of Terrorism (CFT) compliance frameworks has grown ever more challenging. Not only must firms be able to implement riskbased assessments that are proportional to the size and nature of a firm’s activities, they must also ensure that these systems can seamlessly integrate third party systems in order to provide effective monitoring of AML and CFT risks.

This training course has been specifically designed to provide a firm’s compliance and front office employees with highly comprehensive training on AML global trends and challenges, as well as a thorough review of money laundering methods and ways of concealing beneficial ownership. By attending the training course individuals will be thoroughly trained on global money laundering techniques and will be equipped to be able to more effectively carry out internal client AML and CFT checks and risk assessments. The training course provides practical and interactive training combined with contextual case studies to exemplify global AML and CFT practices.

SESSION 3:

AML AND CFT GLOBAL TRENDS AND CHALLENGES

CONCEALMENT OF BENEFICIAL OWNERSHIP

● Global View of AML and CFT Cases and Fines, Developments in High Risk Third Countries, Developments in Higher Risk Third Countries ● An Update on High End Money Laundering, Strategy and Action Plan. ● A Review of the Latest AML and CFT Compliance Technology Features (Artificial Intelligence (AI) RiskDriven Databases (Companies, People); AML Real Time Facial Recognition Identification).

● Misuse of Legal Persons and Arrangements (Capital Companies, Partnerships, Limited Liability Companies, Foundations, Trusts). ● Techniques used to Obscure Beneficial Ownership (Complex Ownership and Control Structures, Use of Individuals, Use of Financial Instruments, Falsifying Activities). ● Case Studies (Australia); Case Studies (Argentina); Case Studies (Belgium); Case Studies (Bolivia); Case Studies (Canada); Case Studies (Cayman Islands); Case Studies (China).

SESSION 2:

SESSION 4:

A REVIEW OF MONEY LAUNDERING METHODS ● Assets (gold, jewellery, raw diamonds, antiquities, art); Real Estate (Legal Estate, Equitable Interests, Property Values, Cash Deposits); deposit boxes; private cash deals; currency exchange offices, loans and mortgages. ● The growing use of Third Party Intermediaries (TPIs) (Consulting Firms; Legal Professionals; Trust and Company Service Providers; Accountants) and New Areas (Capital Markets; Mergers and Acquisitions). ● TPI Vulnerabilities (Shelf Companies, Directorship, Trustee, Virtual Office, Mailbox Services, Trusts, Client Accounts, Client Advocacy and Brokerage Services), and Environmental Vulnerabilities (Jurisdictional Vulnerabilities, Vulnerable Business Practices).

ADVANCED RISK ASSESSMENT METHODOLOGIES AND MONITORING ● Client Risk Rating (Jurisdiction, Political Status, Legal Persons and Arrangements, Industry Type); Country or Geographic Risks; Product Type Risks; Delivery Channel Risks; Risk Rating Methodologies; Risk Rating Scale. ● Integration of Third Party Systems (Criminal Records, Black Lists, White Lists, PEPs, Corruption Indexes, Negative News Screening, Data Feeds (Application Programming Interfaces (APIs))). ● Transaction Filtering and Monitoring, Automated Analytics, Internal Audit (Audit Committee Participation, Subject Matter Knowledge, Escalations, New Business Committee).

REVISED PAYMENT SERVICES DIRECTIVE (PSD2): REGULATION AND INNOVATION

MODULE 3:

A REVIEW OF EBA REGULATORY TECHNICAL STANDARDS AND GUIDELINES ● Analysis of the European Banking Authority (EBA) Regulatory Technical Standards (RTS): (1) Strong Customer Authentication and Common and Secure Communication; and (2) Passport Notifications. ● Analysis of the EBA Guidelines: (1) Major Incidents Reporting; (2) Minimum Monetary Amount for Professional Indemnity Insurance; and (3) Authorisation and Registration. ● Overview of the Revised Payment Services Directive (2015/2366/EU) (PSD2), Payment Services (Account Information Services (AIS), Payment Initiation Services (PIS), Payment Institutions (Banks, Building Societies, Money Remitters, E-Money Institutions, FinTech Platforms, Acquirer Payment Institutions, Non-Bank Credit Card Issuers and Merchant Acquirers).

MODULE 4:

PSD2 STRATEGIC REGULATORY CHALLENGES AND OPPORTUNITIES ● PSD2 Strategic Regulatory Compliance (Third Party Providers (TPPs), Access to Accounts (XS2A), Open Application Programming Interfaces (APIs), and Open Banking Technical Standards). ● PSD2 Strategic Challenges and Opportunities for FinTech Firms, and a Review of Existing FinTech Firm Offerings (AccessPay, Adyen, AstroPay, Azimo, Currency Cloud, DoPay, Flypay, Droplet, Judo, GoCardless, Ixaris, Monese, MoneyMover, Osper, Mondo, Moni, Pockit, Revolut, SumUp, Yoyo).

DAY 5:

MODULE 1:

AN OVERVIEW OF THE PSD AND PSD2 OPERATIONAL FRAMEWORKS ● Overview of the Payment Services Directive (2007/64/EC) (PSD), Harmonization and Integration of Retail Payments in the European Union (EU), Consumer Protection, Payment Efficiency, and Payment Chain Security Risks. ● Overview of the Revised Payment Services Directive (2015/2366/EU) (PSD2), Payment Services (Account Information Services (AIS), Payment Initiation Services (PIS), Payment Institutions (Banks, Building Societies, Money Remitters, E-Money Institutions, FinTech Platforms, Acquirer Payment Institutions, Non-Bank Credit Card Issuers and Merchant Acquirers).

MODULE 2:

UNDERSTANDING THE NEW PSD2 FINANCIAL LANDSCAPE ● The PSD2 Operational Framework, the Single Euro Payments Area (SEPA), Payment Services Providers, and Exemptions (Commercial Agency, Limited Network, Digital Device, Automated Teller Machine (ATMs); Third-Party Account Access, Account Information Aggregators, AIS Providers (AISPs), PIS Providers (PISPs), and Execution of Payment Transactions. ● PSD2 Security Framework (Data Protection, Operational Risks, Security Risks, Authentication, Fraud Controls, Incident Notification); Consumer Protection (Complaints Procedures, Dispute Resolution, Penalties, Surcharge Restrictions, Refund Rights, Liability for Unauthorised Transactions).

There can be no doubt that the new Payment Services Directive (2015/2366/ EU) (PSD2) is set to revolutionise banking services throughout the European Union (EU) and usher in a whole new host of unique and innovative payments systems and ideas. Given the sheer breadth of Payment Institutions affected by PSD2, the complexity of this new payments landscape should not be underestimated. Firms need to not only become PSD2 compliant, but without a shadow of a

doubt they also need to arm themselves with strategic insights that will allow them to successfully navigate and thrive in this newly forecasted complexity of payments systems and institutions. This training course seeks to provide firms with highly comprehensive yet logical guidance through the new PSD2 framework, in addition to presenting insights into new strategic regulatory challenges and opportunities which came into force on 13th of January 2018.

Contact: Telephone: Email: Online:

Client Services UK + 44(0)20 7846 0076 client.services@storm-7.com www.storm-7.com