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Financial Market Operations Management offers anyone involved with administering, maintaining, and improving the IT systems within financial institutions a comprehensive text that covers all the essential information for managing operations. Written by Keith Dickinson--an expert on the topic--the book is comprehensive, practical, and covers the five essential areas of operations and management including participation and infrastructure, trade life cycle, asset servicing, technology, and the regulatory environment. This comprehensive guide also covers the limitations and boundaries of operational systems and focuses on their interaction with external parties including clients, counterparties, exchanges, and more.
This essential resource reviews the key aspects of operations management in detail, including an examination of the entire trade life cycle, new issue distribution of bonds and equities, securities financing, as well as corporate actions, accounting, and reconciliations. The author highlights specific operational processes and challenges and includes vital formulae, spreadsheet applications, and exhibits.
* Offers a comprehensive resource for operational staff in financial services
* Covers the key aspects of operations management
* Highlights operational processes and challenges
* Includes an instructors manual, a test bank, and a solution manual
This vital resource contains the information, processes, and illustrative examples needed for a clear understanding of financial market operations.
Financial Market Operations Management offers anyone involved with administering, maintaining, and improving the IT systems within financial institutions a comprehensive text that covers all the essential information for managing operations. Written by Keith Dickinson--an expert on the topic--the book is comprehensive, practical, and covers the five essential areas of operations and management including participation and infrastructure, trade life cycle, asset servicing, technology, and the regulatory environment. This comprehensive guide also covers the limitations and boundaries of operational systems and focuses on their interaction with external parties including clients, counterparties, exchanges, and more.
This essential resource reviews the key aspects of operations management in detail, including an examination of the entire trade life cycle, new issue distribution of bonds and equities, securities financing, as well as corporate actions, accounting, and reconciliations. The author highlights specific operational processes and challenges and includes vital formulae, spreadsheet applications, and exhibits.
* Offers a comprehensive resource for operational staff in financial services
* Covers the key aspects of operations management
* Highlights operational processes and challenges
* Includes an instructors manual, a test bank, and a solution manual
This vital resource contains the information, processes, and illustrative examples needed for a clear understanding of financial market operations.
KEITH DICKINSON is Director of The Settlement & Management Research Consultancy Limited, Principal of Financial Markets Training Limited and a Senior Teaching Fellow at the International Business School Suzhou at Xi'an Jiaotong-Liverpool University, Suzhou. His career has spanned twenty years as an industry practitioner in operations and over twenty years in executive education and academia.
Preface xix
Acknowledgements xxiii
Part One
Chapter 1
Introduction to Operations 3
1.1 Introduction 3
1.2 Organisational Structure of an Investment Company 5
1.2.1 Front Office 5
1.2.2 Middle Office 6
1.2.3 Back Office/Operations 9
1.3 Operations' Relationships 10
1.3.1 Clients - External 10
1.3.2 Clients - Internal 11
1.3.3 Counterparties 11
1.3.4 Suppliers 12
1.3.5 The Authorities 12
1.4 Other Business Functions 13
1.5 Summary 15
Chapter 2
Financial Instruments 17
2.1 Introduction 17
2.2 Why Do We Issue Financial Instruments? 18
2.3 Money Market Instruments 19
[...]o-Currency Deposits 19
2.3.2 Certificates of Deposit 23
2.3.3 Commercial Paper 23
2.3.4 Treasury Bills 25
2.4 Debt Instruments 26
2.4.1 A Bond Defined 26
2.4.2 Bond Issuance 27
2.4.3 Types and Features of Bonds 27
2.4.4 Other Key Characteristics of Bonds 28
2.4.5 Types of Bond 29
2.4.6 Form of Bonds and Interest Payment 30
2.4.7 Maturity and Redemption Provisions 31
2.4.8 Calculations 32
2.4.9 Accrued Interest 33
2.4.10 First Short Coupon 37
2.4.11 First Long Coupon 38
2.5 Equity Instruments 38
2.5.1 Equity Defined 38
2.5.2 Classes of Equity 41
2.5.3 Equity Issuance 43
2.5.4 Pricing and Calculations 44
2.5.5 Examples of Local Taxes 45
2.5.6 Disclosure 45
2.5.7 Summary of Cash Market Instruments 46
2.6 Derivative Instruments 47
2.6.1 Introduction 47
2.6.2 Definitions 48
2.6.3 Derivative Usage 49
2.7 Exchange-Traded Derivatives 52
2.7.1 Introduction 52
2.7.2 The Role of the Derivatives Exchanges 53
2.7.3 Major Derivatives Exchanges 53
2.7.4 Open Interest and Trading Volumes 56
2.7.5 Futures 58
2.7.6 Options 64
2.7.7 Summary of Exchange-Traded Derivatives 71
2.8 OTC Derivatives 71
2.8.1 Introduction 71
2.8.2 Forwards 72
2.8.3 Swaps 76
2.8.4 Summary of OTC Derivatives 80
2.9 Summary 81
2.9.1 Financial Products in General 81
2.9.2 Cash Markets 81
2.9.3 Derivatives Markets 81
Chapter 3
Data Management 83
3.1 Introduction 83
3.2 Importance of Reference Data and Standardisation 84
3.2.1 Introduction 84
3.2.2 Basic Securities Transactions 84
3.3 Types of Reference Data 86
3.3.1 Required Reference Data 86
3.3.2 Data Requirements - Securities 87
3.3.3 Data Requirements - Counterparties and Customers 91
3.3.4 Data Requirements - Settlement Information 92
3.3.5 Sources of Reference Data 93
3.4 Data Management 94
3.4.1 What is Data Management? 94
3.4.2 Approaches to Data Management 94
3.4.3 Data Processing 95
3.5 Legal Entity Identification 95
3.5.1 Background to Legal Entity Identification 95
3.5.2 The "Legal Entity" 96
3.5.3 The Global Legal Entity Identifier System (GLEIS) 96
3.5.4 LEI Structure 97
3.6 Summary 99
Chapter 4
Market Participation 101
4.1 Introduction 101
4.2 Market Players 102
4.2.1 Retail Clients 102
4.2.2 Institutional Clients 103
4.2.3 Banks 115
4.2.4 Sell-Side Intermediaries 126
4.2.5 Market Regulators and Market Associations 129
4.3 Market Structure 131
4.3.1 Introduction 131
4.3.2 Regulated Markets 131
4.3.3 Alternative Trading Venues 135
4.3.4 Over-the-Counter Market 136
4.4 Summary 137
Part Two
Chapter 5
Clearing Houses and CCPs 141
5.1 Introduction 141
5.2 Overview of Clearing and Settlement 142
5.3 The Clearing House Model 143
5.4 The Central Counterparty Model 145
5.4.1 Risk Management 147
5.5 Features of CCPs and Clearing Houses 148
5.5.1 The Committee for Payment and Settlement Systems' Statistics 148
5.6 Summary 150
Chapter 6
Securities Depositories (CSDs and ICSDs) 151
6.1 Introduction 151
6.2 Historical Context 151
6.3 Definitions 154
6.3.1 Domestic (Local/National) CSDs 154
6.3.2 International CSDs 154
6.4 Central Securities Depositories 154
6.4.1 Features of CSDs and ICSDs 154
6.4.2 Functions of CSDs 155
6.4.3 The Changing World of CSDs 158
6.4.4 CSD Links and Interoperability 161
6.5 International Central Securities Depositories 163
6.5.1 Background 163
6.5.2 Features of the ICSDs 164
6.5.3 Clearstream Banking Luxembourg (CBL) 164
[...]oclear Bank (EB) 165
6.6 Linkages - Exchanges, Clearing Systems and CSDs 167
6.6.1 United States of America 168
[...]ope 169
6.6.3 Rest of the World 170
6.7 CSD Associations 171
6.7.1 Introduction 171
6.7.2 Americas' Central Securities Depositories Association (ACSDA) 171
6.7.3 Asia-Pacific CSD Group (ACG) 171
6.7.4 Association of Eurasian Central Securities Depositories (AECSD) 172
[...]opean Central Securities Depositories Association (ECSDA) 172
6.7.6 Africa and Middle East Depositories Association (AMEDA) 172
6.8 Summary 173
Chapter 7
Securities Clearing 175
7.1 Introduction 175
7.2 Generic Clearing Cycle 176
7.2.1 Trade Capture 176
7.2.2 Trade Enrichment and Validation 177
7.2.3 Trade Reporting 177
7.2.4 Confirmation and Affirmation 178
7.2.5 Clearing Instructions 178
7.2.6 Forecasting - Cash 179
7.2.7 Forecasting - Securities 180
7.3 Trade Capture 182
7.3.1 Dealer's Blotter 182
7.3.2 Trade Input 182
7.3.3 Trade Output 183
7.4 Trade Enrichment and Validation 184
7.5 Regulatory Reporting 186
7.5.1 Background 186
7.5.2 Transaction Reporting 186
7.5.3 Transaction-Reporting Mechanism 187
7.5.4 Trade Repositories 188
7.6 Confirmation and Affirmation 188
7.6.1 Confirmations 189
7.6.2 Affirmation 190
7.7 Clearing Instructions 194
7.7.1 Types of Instruction 194
7.7.2 Instruction Validation 196
7.7.3 Instruction Matching 196
7.8 Forecasting - Cash 199
7.8.1 Introduction 199
7.8.2 Timing Issues 199
7.8.3 Cash Forecasting Methodology 200
7.8.4 Funding Uncertainties 201
7.8.5 Benefits of Predictive Forecasting 202
7.9 Forecasting - Securities 203
7.9.1 Introduction 203
7.9.2 Securities that are Available for Delivery 204
7.9.3 Securities that are Not Available for Delivery 204
7.10 Summary 205
Chapter 8
Settlement and Fails Management 207
8.1 Introduction 207
8.2 The Different Types of Settlement 208
8.2.1 Gross Settlement 209
8.2.2 Net Settlement 210
8.3 Delivery versus Payment 211
8.3.1 Definition of DVP 212
8.3.2 DVP Models 213
8.3.3 Settlement Instructions for DVP 214
8.4 Free of Payment Settlement 215
8.4.1 Settlement Instructions for Free of Payment 215
8.4.2 Where Settlement Takes Place 216
8.4.3 Settlement Conventions 216
8.5 Settlement Fails 217
8.5.1 Overview of Settlement Failure 217
8.5.2 Why Transactions Fail to Settle 218
8.6 The Move to Shorter Settlement Cycles 228
8.6.1 Background 228
8.6.2 Project Status 228
8.7 Summary 229
Chapter 9
Derivatives Clearing and Settlement 231
9.1 Introduction 231
9.2 Regulatory Changes 232
9.2.1 Background 232
9.2.2 Financial Stability Board (FSB) 232
9.2.3 Reform Requirements 233
9.3 Exchange-Traded Derivatives Contracts 234
9.3.1 Introduction 234
9.3.2 Derivatives Exchange and Clearing System 235
9.3.3 Give-Up Agreements 235
9.3.4 Clearing Process 236
9.3.5 Margin Calculations 237
9.3.6 Initial Margin - Eligible Assets 239
9.4 Cleared OTC Derivatives Contracts 240
9.4.1 Types of OTC Derivative that are Cleared Centrally 241
9.4.2 Trading Platforms 242
9.4.3 Trade Repositories 244
9.4.4 Central Counterparties 244
9.5 Non-Cleared OTC Derivatives Contracts 245
9.5.1 Documentation 245
9.5.2 Non-Cleared OTCD Processing 248
9.5.3 Trade Capture 248
9.5.4 Confirmation 249
9.5.5 Settlement 250
9.5.6 Collateral 251
9.5.7 Event Monitoring 254
9.5.8 Reconciliation 254
9.6 Summary 255
Part Three
Chapter 10
Custody and the Custodians 259
10.1 Introduction 259
10.2 Custody 260
10.2.1 What is Custody? 260
10.2.2 Forms of Securities 260
10.2.3 Ownership Transfer - Bearer Securities 261
10.2.4 Ownership Transfer - Registered Securities 262
10.3 Holding Securities 263
10.3.1 Register in the Custodian's Name 263
10.3.2 Nominee Account 264
10.3.3 CSD Nominee 266
10.3.4 Safekeeping Methods - Summary 267
10.4 The Custodians 267
10.4.1 Custody in a Local Market 267
10.4.2 Custody in Global Markets 271
10.4.3 Custody in the EuroMarkets 277
10.5 Target2Securities (T2S) 279
10.5.1 Introduction 279
[...]osystem 280
10.5.3 How T2S Will Work 281
10.5.4 Migration Plan 282
10.5.5 Further Information 282
10.6 Summary 283
Chapter 11
Corporate Actions 285
11.1 Introduction 285
11.2 Types of Corporate Action Event 286
11.2.1 Voluntary or Mandatory Events 286
11.2.2...
Erscheinungsjahr: | 2015 |
---|---|
Fachbereich: | Betriebswirtschaft |
Genre: | Importe, Wirtschaft |
Rubrik: | Recht & Wirtschaft |
Medium: | Buch |
Inhalt: | 472 S. |
ISBN-13: | 9781118843918 |
ISBN-10: | 1118843916 |
Sprache: | Englisch |
Einband: | Gebunden |
Autor: | Dickinson, Keith |
Hersteller: |
Wiley
John Wiley & Sons |
Verantwortliche Person für die EU: | Wiley-VCH GmbH, Boschstr. 12, D-69469 Weinheim, product-safety@wiley.com |
Maße: | 251 x 174 x 35 mm |
Von/Mit: | Keith Dickinson |
Erscheinungsdatum: | 23.03.2015 |
Gewicht: | 0,957 kg |
KEITH DICKINSON is Director of The Settlement & Management Research Consultancy Limited, Principal of Financial Markets Training Limited and a Senior Teaching Fellow at the International Business School Suzhou at Xi'an Jiaotong-Liverpool University, Suzhou. His career has spanned twenty years as an industry practitioner in operations and over twenty years in executive education and academia.
Preface xix
Acknowledgements xxiii
Part One
Chapter 1
Introduction to Operations 3
1.1 Introduction 3
1.2 Organisational Structure of an Investment Company 5
1.2.1 Front Office 5
1.2.2 Middle Office 6
1.2.3 Back Office/Operations 9
1.3 Operations' Relationships 10
1.3.1 Clients - External 10
1.3.2 Clients - Internal 11
1.3.3 Counterparties 11
1.3.4 Suppliers 12
1.3.5 The Authorities 12
1.4 Other Business Functions 13
1.5 Summary 15
Chapter 2
Financial Instruments 17
2.1 Introduction 17
2.2 Why Do We Issue Financial Instruments? 18
2.3 Money Market Instruments 19
[...]o-Currency Deposits 19
2.3.2 Certificates of Deposit 23
2.3.3 Commercial Paper 23
2.3.4 Treasury Bills 25
2.4 Debt Instruments 26
2.4.1 A Bond Defined 26
2.4.2 Bond Issuance 27
2.4.3 Types and Features of Bonds 27
2.4.4 Other Key Characteristics of Bonds 28
2.4.5 Types of Bond 29
2.4.6 Form of Bonds and Interest Payment 30
2.4.7 Maturity and Redemption Provisions 31
2.4.8 Calculations 32
2.4.9 Accrued Interest 33
2.4.10 First Short Coupon 37
2.4.11 First Long Coupon 38
2.5 Equity Instruments 38
2.5.1 Equity Defined 38
2.5.2 Classes of Equity 41
2.5.3 Equity Issuance 43
2.5.4 Pricing and Calculations 44
2.5.5 Examples of Local Taxes 45
2.5.6 Disclosure 45
2.5.7 Summary of Cash Market Instruments 46
2.6 Derivative Instruments 47
2.6.1 Introduction 47
2.6.2 Definitions 48
2.6.3 Derivative Usage 49
2.7 Exchange-Traded Derivatives 52
2.7.1 Introduction 52
2.7.2 The Role of the Derivatives Exchanges 53
2.7.3 Major Derivatives Exchanges 53
2.7.4 Open Interest and Trading Volumes 56
2.7.5 Futures 58
2.7.6 Options 64
2.7.7 Summary of Exchange-Traded Derivatives 71
2.8 OTC Derivatives 71
2.8.1 Introduction 71
2.8.2 Forwards 72
2.8.3 Swaps 76
2.8.4 Summary of OTC Derivatives 80
2.9 Summary 81
2.9.1 Financial Products in General 81
2.9.2 Cash Markets 81
2.9.3 Derivatives Markets 81
Chapter 3
Data Management 83
3.1 Introduction 83
3.2 Importance of Reference Data and Standardisation 84
3.2.1 Introduction 84
3.2.2 Basic Securities Transactions 84
3.3 Types of Reference Data 86
3.3.1 Required Reference Data 86
3.3.2 Data Requirements - Securities 87
3.3.3 Data Requirements - Counterparties and Customers 91
3.3.4 Data Requirements - Settlement Information 92
3.3.5 Sources of Reference Data 93
3.4 Data Management 94
3.4.1 What is Data Management? 94
3.4.2 Approaches to Data Management 94
3.4.3 Data Processing 95
3.5 Legal Entity Identification 95
3.5.1 Background to Legal Entity Identification 95
3.5.2 The "Legal Entity" 96
3.5.3 The Global Legal Entity Identifier System (GLEIS) 96
3.5.4 LEI Structure 97
3.6 Summary 99
Chapter 4
Market Participation 101
4.1 Introduction 101
4.2 Market Players 102
4.2.1 Retail Clients 102
4.2.2 Institutional Clients 103
4.2.3 Banks 115
4.2.4 Sell-Side Intermediaries 126
4.2.5 Market Regulators and Market Associations 129
4.3 Market Structure 131
4.3.1 Introduction 131
4.3.2 Regulated Markets 131
4.3.3 Alternative Trading Venues 135
4.3.4 Over-the-Counter Market 136
4.4 Summary 137
Part Two
Chapter 5
Clearing Houses and CCPs 141
5.1 Introduction 141
5.2 Overview of Clearing and Settlement 142
5.3 The Clearing House Model 143
5.4 The Central Counterparty Model 145
5.4.1 Risk Management 147
5.5 Features of CCPs and Clearing Houses 148
5.5.1 The Committee for Payment and Settlement Systems' Statistics 148
5.6 Summary 150
Chapter 6
Securities Depositories (CSDs and ICSDs) 151
6.1 Introduction 151
6.2 Historical Context 151
6.3 Definitions 154
6.3.1 Domestic (Local/National) CSDs 154
6.3.2 International CSDs 154
6.4 Central Securities Depositories 154
6.4.1 Features of CSDs and ICSDs 154
6.4.2 Functions of CSDs 155
6.4.3 The Changing World of CSDs 158
6.4.4 CSD Links and Interoperability 161
6.5 International Central Securities Depositories 163
6.5.1 Background 163
6.5.2 Features of the ICSDs 164
6.5.3 Clearstream Banking Luxembourg (CBL) 164
[...]oclear Bank (EB) 165
6.6 Linkages - Exchanges, Clearing Systems and CSDs 167
6.6.1 United States of America 168
[...]ope 169
6.6.3 Rest of the World 170
6.7 CSD Associations 171
6.7.1 Introduction 171
6.7.2 Americas' Central Securities Depositories Association (ACSDA) 171
6.7.3 Asia-Pacific CSD Group (ACG) 171
6.7.4 Association of Eurasian Central Securities Depositories (AECSD) 172
[...]opean Central Securities Depositories Association (ECSDA) 172
6.7.6 Africa and Middle East Depositories Association (AMEDA) 172
6.8 Summary 173
Chapter 7
Securities Clearing 175
7.1 Introduction 175
7.2 Generic Clearing Cycle 176
7.2.1 Trade Capture 176
7.2.2 Trade Enrichment and Validation 177
7.2.3 Trade Reporting 177
7.2.4 Confirmation and Affirmation 178
7.2.5 Clearing Instructions 178
7.2.6 Forecasting - Cash 179
7.2.7 Forecasting - Securities 180
7.3 Trade Capture 182
7.3.1 Dealer's Blotter 182
7.3.2 Trade Input 182
7.3.3 Trade Output 183
7.4 Trade Enrichment and Validation 184
7.5 Regulatory Reporting 186
7.5.1 Background 186
7.5.2 Transaction Reporting 186
7.5.3 Transaction-Reporting Mechanism 187
7.5.4 Trade Repositories 188
7.6 Confirmation and Affirmation 188
7.6.1 Confirmations 189
7.6.2 Affirmation 190
7.7 Clearing Instructions 194
7.7.1 Types of Instruction 194
7.7.2 Instruction Validation 196
7.7.3 Instruction Matching 196
7.8 Forecasting - Cash 199
7.8.1 Introduction 199
7.8.2 Timing Issues 199
7.8.3 Cash Forecasting Methodology 200
7.8.4 Funding Uncertainties 201
7.8.5 Benefits of Predictive Forecasting 202
7.9 Forecasting - Securities 203
7.9.1 Introduction 203
7.9.2 Securities that are Available for Delivery 204
7.9.3 Securities that are Not Available for Delivery 204
7.10 Summary 205
Chapter 8
Settlement and Fails Management 207
8.1 Introduction 207
8.2 The Different Types of Settlement 208
8.2.1 Gross Settlement 209
8.2.2 Net Settlement 210
8.3 Delivery versus Payment 211
8.3.1 Definition of DVP 212
8.3.2 DVP Models 213
8.3.3 Settlement Instructions for DVP 214
8.4 Free of Payment Settlement 215
8.4.1 Settlement Instructions for Free of Payment 215
8.4.2 Where Settlement Takes Place 216
8.4.3 Settlement Conventions 216
8.5 Settlement Fails 217
8.5.1 Overview of Settlement Failure 217
8.5.2 Why Transactions Fail to Settle 218
8.6 The Move to Shorter Settlement Cycles 228
8.6.1 Background 228
8.6.2 Project Status 228
8.7 Summary 229
Chapter 9
Derivatives Clearing and Settlement 231
9.1 Introduction 231
9.2 Regulatory Changes 232
9.2.1 Background 232
9.2.2 Financial Stability Board (FSB) 232
9.2.3 Reform Requirements 233
9.3 Exchange-Traded Derivatives Contracts 234
9.3.1 Introduction 234
9.3.2 Derivatives Exchange and Clearing System 235
9.3.3 Give-Up Agreements 235
9.3.4 Clearing Process 236
9.3.5 Margin Calculations 237
9.3.6 Initial Margin - Eligible Assets 239
9.4 Cleared OTC Derivatives Contracts 240
9.4.1 Types of OTC Derivative that are Cleared Centrally 241
9.4.2 Trading Platforms 242
9.4.3 Trade Repositories 244
9.4.4 Central Counterparties 244
9.5 Non-Cleared OTC Derivatives Contracts 245
9.5.1 Documentation 245
9.5.2 Non-Cleared OTCD Processing 248
9.5.3 Trade Capture 248
9.5.4 Confirmation 249
9.5.5 Settlement 250
9.5.6 Collateral 251
9.5.7 Event Monitoring 254
9.5.8 Reconciliation 254
9.6 Summary 255
Part Three
Chapter 10
Custody and the Custodians 259
10.1 Introduction 259
10.2 Custody 260
10.2.1 What is Custody? 260
10.2.2 Forms of Securities 260
10.2.3 Ownership Transfer - Bearer Securities 261
10.2.4 Ownership Transfer - Registered Securities 262
10.3 Holding Securities 263
10.3.1 Register in the Custodian's Name 263
10.3.2 Nominee Account 264
10.3.3 CSD Nominee 266
10.3.4 Safekeeping Methods - Summary 267
10.4 The Custodians 267
10.4.1 Custody in a Local Market 267
10.4.2 Custody in Global Markets 271
10.4.3 Custody in the EuroMarkets 277
10.5 Target2Securities (T2S) 279
10.5.1 Introduction 279
[...]osystem 280
10.5.3 How T2S Will Work 281
10.5.4 Migration Plan 282
10.5.5 Further Information 282
10.6 Summary 283
Chapter 11
Corporate Actions 285
11.1 Introduction 285
11.2 Types of Corporate Action Event 286
11.2.1 Voluntary or Mandatory Events 286
11.2.2...
Erscheinungsjahr: | 2015 |
---|---|
Fachbereich: | Betriebswirtschaft |
Genre: | Importe, Wirtschaft |
Rubrik: | Recht & Wirtschaft |
Medium: | Buch |
Inhalt: | 472 S. |
ISBN-13: | 9781118843918 |
ISBN-10: | 1118843916 |
Sprache: | Englisch |
Einband: | Gebunden |
Autor: | Dickinson, Keith |
Hersteller: |
Wiley
John Wiley & Sons |
Verantwortliche Person für die EU: | Wiley-VCH GmbH, Boschstr. 12, D-69469 Weinheim, product-safety@wiley.com |
Maße: | 251 x 174 x 35 mm |
Von/Mit: | Keith Dickinson |
Erscheinungsdatum: | 23.03.2015 |
Gewicht: | 0,957 kg |