Definition

The role of the Post-Market Operations Unit fits into AFT’s broader task, which is to ensure the management of the government’s debt and cash in the best interests of taxpayers, and as securely as possible. It has three main tasks, namely settlement-delivery, risk monitoring and management of margin calls:

  • settlement-delivery: the Post-Market Operations Unit monitors and settle financial transactions initiated by the Cash Unit and Debt and Market Operations Unit, and submits all the information necessary for their registration to the Ministerial Budget and Accounting Control Unit of the Ministry for the Economy, Finance, Government Action and Public Accounts;
  • risk monitoring: the Post-Market Operations Unit monitors credit risk, exposure, settlement commitment and counterparty risk, and makes daily and monthly reports to the Directorate General;
  • management of margin calls: the Post-Market Operations Unit trades and reviews margin calls on all market transactions on financial futures, derivatives and repo positions performed by AFT when they are subject to specific bilateral agreements.

The Post-Market Operations Unit manages all transactions performed by AFT on its behalf or for third parties (other Ministries, Treasury departments, etc.) when Agence France Trésor has a mandate.

The Post-Market Operations Unit also ensures that processes are constantly updated in line with new market regulations. It is in constant and close contact with the Agency’s Front Office and Cash Units, the Banque de France, the central government securities depository (Euroclear France) and with primary dealers’ back office and collateral management departments.

Settlement-delivery (back-office) : the Post-Market Operations Unit monitors and settle financial transactions initiated by the Cash Unit and Debt and Market Operations Unit, and submits all the information necessary for their registration to the Ministerial Budget and Accounting Control Unit of the Ministry for the Economy, Finance, Government Action and Public Accounts.

The settlement and delivery of securities, following auctions, active debt management transactions or repo transactions is performed through Euroclear France, the national central securities depository, which completes the transfer of ownership of securities and acts as custodian.

Settlement and monitoring of other types of transactions are performed based on events related to individual transactions. The back office issues payment and delivery messages to counterparties, intermediaries or market systems. Events associated with each transaction are monitored and managed, from trading to maturity.

Risk monitoring: the Post-Market Operations Unit monitors credit, exposure, settlement commitment and counterparty risk, and makes daily and monthly reports to internal control and the Directorate General. Risk monitoring takes into account the financial robustness of each Agence France Trésor counterparty and portfolio risk concentration by type of transaction.

Each risk measure is subject to regular review with the Directorate General, and with the internal control and risk control departments.

Management of margin calls: the Post-Market Operations Unit trades and examines margin calls on all AFT market transactions on financial futures and repo positions. Margin calls are an adjustment of guarantees to cover a change in the value of contracts in force.
They are regulated by specific and distinct bilateral agreements for financial derivatives and for repo positions. They are calculated daily based on the market value of each instrument.