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Course Outline

The Global Capital Markets

  • The definition of a ‘financial market place’
  • The historical evolution of the modern global financial market
  • The influence of financial media
  • The structural composition of major capital markets:
    • Exchanges, Clearing houses, and Regulatory bodies
    • The contemporary surge in global investment activity
    • Distinctions among various types of ‘Stock Exchanges’
    • The position of Stock Exchanges within today’s market landscape
    • Stock Exchanges across the US, Europe, the Middle East, and Asia

Financial Markets Regulation:

  • Capital Adequacy Requirements
  • Basel I Framework
  • Basel II Framework
  • Basel III and its regulatory implications
  • Innovation in 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 issued
  • Bonds – Fixed, Floating, and Zero coupon rates, including the Yield Curve
  • Money Market instruments
  • Currency markets
  • Investor motivations for buying and selling
  • Dynamics of Income vs. Capital Gain
  • Interdependencies between various asset classes
  • The interplay between Exchange-traded and Over-The-Counter markets

Short Term Money Market

  • Certificates of deposit
  • Government T Bills
  • Commercial paper
  • Trade paper & Bank Acceptances
  • Standard market norms and practices
  • Key market participants

The Different Types of Stock Exchange investor

  • Individual and Institutional Investors
  • Fund managers
  • Hedge funds
  • Stock Exchange participants
  • Investment banks, Stockbrokers, Hedge Funds, and Prime Brokers
  • Intra-market relationships – the buy and sell sides of the industry

The Role of the Stock Exchange

  • Loci of product trading
  • The significance of the OTC market
  • Historical development of Stock Exchanges
  • Principal Stock Exchanges in the current market ecosystem
  • US, European, and Asian Markets and their distinct architectures
  • Asset classes traded on global Stock Exchanges
  • Primary and Secondary market distinctions
  • New York, Euronext, London, Shanghai, and Hong Kong
  • The appeal of “listed” companies to investors
  • Leveraging Stock Exchanges to pool liquidity and raise capital
  • Strategies for Capital Raising
  • ‘Floating’ a company – various methodologies

Clearing & Settlement

  • Settlement processes and associated risks
  • Settlement conventions in major markets
  • Clearing for Equities, Bonds, and derivatives
  • The Derivatives Clearing process
  • The function of the Central Counterparty (CCP)
  • CCP services offered to Stock Exchanges
  • Margin requirements
  • The security trade settlement workflow
  • Pre-settlement procedures
  • Final settlement
  • Common issues – unmatched trades, delayed settlement, and failed deliveries
  • Stock Exchange Settlement Discipline
  • The ‘life cycle of a trade’– linking the process from 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
  • Income collection and processing Corporate Actions
  • Cash management and funding transactions
  • Supplementary services
  • Accounting processes
  • Stock Lending and collateral management
  • Trustee services
  • Valuation reporting

Alternative Investments

  • Definition of Alternative Investments
  • Structured products - Associated risks and returns
  • Hedge funds - Risk management and control mechanisms
  • Venture Capital - Valuation challenges, risk, and control
  • Private Equity/Angel Finance
  • The application of derivatives in Asset Management
  • OTC vs ETD dynamics
  • Types of Derivatives utilized in Asset Management
  • Futures
  • Options
  • Risk and control aspects of derivatives, including documentation, valuation, and reporting

The Management of Quoted Equity Investment

  • Risks involved in acquiring securities
  • Risks involved in managing securities
  • Risks linked to corporate actions
  • Pricing mechanisms for quoted equity investments
  • Primary sources of risk
  • General controls within equity investment
  • Risks specific to international equity markets

The Management of Quoted Fixed Income Investment

  • Risks associated with the acquisition and disposal of fixed income securities
  • The application of credit ratings and related risk considerations
  • Risks involved in pricing fixed income securities
  • Risk management and controls within corporate fixed income processing
  • Risks associated with Government Securities
  • Sovereign risk ratings
  • Valuation methods for government securities
  • Risk and control measures in sovereign bond processing

The Market and Credit Risks of investing in Global Market

  • Market risks
  • Value at Risk (VaR) calculations
  • Market risk modeling techniques
  • Credit Risks
  • Methods for measuring Credit risks
  • Global Market Risks
  • Money Market Risks
  • OTC Risks
  • Exchange risks
 14 Hours

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