Corporate Membership
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The Financial Options Research Centre is funded by its Corporate Members who enjoy a close relationship with the work of the Centre and participate in shaping its research directions. The Members form a key group of financial institutions with major interests in derivative instruments and risk management. The Centre undertakes academic studies of direct relevance to its Members. Corporate Members receive the following benefits: Educational
Research Resources
Liaison
Prospective Members should note that, important though these benefits are, they are independent of the main function of FORC, which is to undertake applied research on derivatives and related topics for publication. All our Members receive identical privileges. In defining the benefits described above we have to be careful to safeguard the resources of the Centre for its main research function. Financial Commitment Membership of FORC works on a 3-year rolling basis, so that each year the Members review their commitment for the 1 year period that begins 2 years into the future. The annual Membership fee is determined in advance for the period for which Members are committed and is currently £22,000 annually. This arrangement enables FORC to provide contracts of sufficient length to attract the highest calibre research staff. For new Members a one-year 'trial Membership' is available at a fee of £25,000, and a continuation of one-year Membership for £27,000. Membership Benefits Membership of the Centre offers a wide range of benefits for each Corporate Member. Overall, we classify the benefits under three main headings: Education, Research and Liaison. Education One of FORC's main aims is to increase awareness and understanding of modern securities markets and methods of analysis. In an increasingly volatile environment, derivative securities have become the fundamental building blocks for our understanding of real world problems, as well as a means of providing practical solutions to them. These ideas, in the main, are only about twenty years old. The staff at FORC have considerable experience in teaching advanced material in the simplest possible way. Accordingly, the Centre organises at least two educational courses per year (depending on demand) for its Corporate Members and their clients. Each course is over a two to three day period, reflecting the background and demands of the attendees. A unique feature of the courses is that it is assumed that everyone attending has a basic knowledge of derivative securities, both in regard to pricing, hedging and strategies. In addition, for most courses, attendees are assumed to have a suitably quantitative background (eg, A-level mathematics). The purpose of the courses is to bridge the gap between introductory ones on investment and portfolio management, and those required to read articles in the professional and academic journals such as Risk and the Journal of Finance. Each Member may send either its own employees, or those of its clients, on the courses (up to some reasonable limit of numbers). There is a modest course fee for each attendee to cover the costs of running the course. A second, type of activity we wish to foster is the organisation of specialist workshops for our Members. These act as a forum and so enable Members to discuss openly issues of mutual interest. Topics may, for example, easily range from capital adequacy requirements and their effects on securitisation, to ones relating to the need to have standard models for risk exposure monitoring. Workshops also provide us with an opportunity to communicate new ideas, work in progress for comment, or to present the results of new research. Alternatively, they could be extended seminars on topics and issues raised by the Members. A key aspect of the workshop is the generation of interaction and interchange among FORC and its Members. Finally, a major feature of our annual activities is the yearly Conference, 'Options: Recent Advances in Theory and Practice'. This is a unique event. It enables many distinguished practitioners and academics to gather together in one of the University's specially designed Conference Centres. The orientation of the Conference is twofold. First, the topics are at the cutting edge of research in finance, particularly the derivative securities field. Second, the Conference serves as a forum, providing ample scope for discussion to help bridge the gap which can exist between academia and the real world. It is vital to today's financial services industry that this gap should be closed. Accordingly, our Members receive up to two places at the annual Conference at marginal cost. Research Resources Recent British government sponsored surveys of British Universities have consistently rated Warwick University as achieving the highest standards in teaching and research. Particularly relevant for today's financial markets and services industries is Warwick's internationally recognised strengths in Economics, Econometrics, Law, Mathematics and Statistics. Further, the Business School, in which FORC is based, is rated as one of the top two institutions in Britain. As a result, FORC has access to a set of research resources virtually unparalleled elsewhere. This enables FORC to offer unique value to its Members. FORC has a bibliographic database and library of research papers. The library currently contains about 1800 papers related to derivative securities. The database which catalogues this material is available as a hard copy and on floppy disk in a variety of formats. FORC has rare expertise in many of the technical issues associated with the pricing and hedging of complex financial securities, and other related matters. FORC staff are available to provide a reasonable amount of free advice to Members. In addition, FORC frequently develops software during its general research programme. This software with related documentation and advice is available to FORC Members. FORC can also facilitate consulting arrangements for more extensive proprietary projects. An important aspect of the MSc in Economics and Finance, and the MBA, is the dissertation. The dissertation is usually based on a project undertaken within a company. When the company is a Member of FORC, the Centre will help select the student and then supervise them. (Access to Research Fellows of FORC for project supervision is not normally available to non-Members.) Student projects take place during the months of July, August and September. The project sponsor is asked to cover reasonable out-of-pocket expenses incurred by the student. There is an increasing demand for part-time and long-distance research based degrees. Much of our research activity at FORC is motivated by the day-to-day activities of our Members. Frequently we find that employees of Member and other organisations in the financial services industry wish to enhance their knowledge and skills through a research based degree. Accordingly, providing that the usual University conditions are satisfied, it is possible for employees of Corporate Members to have the opportunity to study for a research based degree, in particular the MPhil/PhD. Liaison The Financial Options Research Centre is funded by its Corporate Members who enjoy a close relationship with the work of the Centre and participate in shaping its research directions. The Members form a key group of financial institutions with major interests, for example, in derivative instruments, portfolio management, regulation and risk management. In order to foster the relationship, each Member is assigned a specific Research Fellow as a contact point within the Centre. This designated Research Fellow should be thought of as the first line of communication with the Centre, and is responsible for managing and co-ordinating all aspects of the relationship between the Member and the Centre. In particular, an important role is to draw attention to work on topics where the Member has expressed an interest. A second area in which the Centre is a major resource is the area of graduate recruitment. Various faculty Members of the Centre are involved in teaching on the undergraduate and postgraduate degree courses. Postgraduates who take the Advanced Financial Management option in the MBA degree, or the MSc in Economics and Finance, have strong mathematical and computing backgrounds combined with a firm knowledge of valuation and hedging methods. The Centre is able to give Corporate Members explicit assistance in recruiting students from the Warwick University degree programmes. In particular, we are able to focus on specific needs of Members, thus increasing the probability of a suitable match when hiring new staff. A very important part of our channels of liaison and communication is the Centre's quarterly Newsletter. Among other things, it lists papers presented at seminars and conferences, as well as the list of the Centre's pre-prints. In addition, in each Newsletter there is a brief review of recently published papers, bringing them rapidly to the attention of the staff of the Corporate Members. Finally, and by no means least, Corporate Membership of the Centre entitles the organisation to have a direct influence on the direction and focus of FORC. Each Member has its own representative on the Advisory Committee of FORC. Both of these committees monitor and comment on FORC's detailed research programme. Members are also represented on the Executive Committee which meets more frequently to advise on the direction of the Centre.
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