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 Duration 14 hours

Course Outline

The Global Capital Markets

  • Defining the 'financial market place'
  • Historical evolution of the contemporary global financial system
  • The influence of financial media
  • Architecture of major capital markets:
    • Exchanges, clearinghouses, and regulatory bodies
    • The recent surge in global investment activity
    • Variations in 'Stock Exchange' structures
    • The position of Stock Exchanges within modern markets
    • Stock Exchanges in the US, Europe, the Middle East, and Asia

Financial Markets Regulation:

  • Capital adequacy standards
  • Basel I framework
  • Basel II framework
  • Basel III and its practical implications
  • Innovation as a source for new product development

The Different Asset Classes and Their Markets

  • Current tradable instruments on Stock Exchanges
  • Equities: Common and Preferred shares
  • Bonds: Corporate and Government issues
  • Bond varieties: Fixed, floating, and zero-coupon rates, along with the Yield Curve
  • Money Market instruments
  • Currency markets
  • Investor motivations for buying and selling
  • Distinguishing Income generation from Capital Gains
  • Interconnections among various asset classes
  • The synergy between Exchange-traded and Over-The-Counter markets

Short Term Money Market

  • Certificates of Deposit
  • Treasury Bills (T Bills)
  • Commercial Paper
  • Trade paper and Bankers' Acceptances (BAs)
  • Standard market norms and practices
  • Key market participants

The Different Types of Stock Exchange investor

  • Retail and institutional investors
  • Fund managers
  • Hedge funds
  • Direct Stock Exchange participants
  • Investment banks, Stockbrokers, Hedge Funds, and Prime Brokers
  • Intra-market dynamics: the buy and sell sides of the industry

The Role of the Stock Exchange

  • Identifying trading venues for various products
  • The significance of the OTC market
  • Historical development of Stock Exchanges
  • Principal Stock Exchanges in the current global landscape
  • Structural differences among US, European, and Asian markets
  • Asset classes traded on Stock Exchanges worldwide
  • Major Primary and Secondary markets
  • Key hubs: New York, Euronext, London, Shanghai, and Hong Kong
  • The appeal of 'listed' companies to investors
  • Leveraging Stock Exchanges for liquidity pooling and capital raising
  • Methods of raising capital
  • Various methods for 'Floating' a company

Clearing & Settlement

  • Settlement processes and associated risks
  • Varying Settlement Conventions across major markets
  • Handling Equities, Bonds, and derivatives
  • The Derivatives Clearing procedure
  • The function of the Central Counterparty (CCP)
  • Services offered by CCPs to Stock Exchanges
  • Margin requirements
  • The security trade settlement workflow
  • Pre-settlement stages
  • Final Settlement
  • Managing potential issues: unmatched trades, delays, and delivery failures
  • Enforcement of Stock Exchange Settlement Discipline
  • The 'life cycle of a trade': connecting execution to settlement
  • The role of International Central Securities Depositories (ICSDs) and Central Securities Depositories (CSDs) – including LCH.Clearnet, Euroclear, Crest, Clearstream International, and the DTC

Custody

  • The function of Custodians in Stock markets
  • Settlement and safekeeping services
  • Collection of Income and processing Corporate Actions
  • Cash management and funding transactions
  • Supplementary services
  • Accounting procedures
  • Stock Lending and collateral management
  • Trustee services
  • Valuation reporting

Alternative Investments

  • Defining Alternative Investments
  • Structured products: Risk and return profiles
  • Hedge funds: Risk management and control mechanisms
  • Venture Capital: Valuation challenges, risk, and control
  • Private Equity and Angel Finance
  • Application of derivatives in Asset Management
  • Comparing OTC vs ETD
  • Derivative types utilized in Asset Management
  • Futures contracts
  • Options contracts
  • Risk and control for derivatives, covering documentation, valuation, and reporting

The Management of Quoted Equity Investment

  • Risks in acquiring securities
  • Risks in managing securities portfolios
  • Risks related to corporate actions
  • Pricing methodologies for quoted equity investments
  • Primary sources of investment risk
  • General control frameworks within equity investment
  • Risks specific to international equity markets

The Management of Quoted Fixed Income Investment

  • Risks in acquiring and disposing of fixed income securities
  • Utilization of credit ratings and related risk considerations
  • Risks associated with fixed income pricing
  • Risk and control mechanisms in corporate fixed income processing
  • Risks specific to Government Securities
  • Sovereign risk ratings
  • Valuation of government securities
  • Risk and control in sovereign bond processing

The Market and Credit Risks of investing in Global Market

  • Market risk assessment
  • Value at Risk (VaR) calculations
  • Market risk modeling techniques
  • Identification of Credit Risks
  • Measuring credit exposure
  • Risks in Global Markets
  • Risks in Money Markets
  • OTC-specific risks
  • Exchange-based risks

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