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Course Outline

The Global Capital Markets

  • Defining a 'financial marketplace'
  • The historical evolution of today's global financial markets
  • The influence of the financial media
  • Structure of major capital markets:
    • Exchanges, Clearing Houses, and Regulators
    • The modern surge in global investment
    • Different types of 'Stock Exchanges'
    • The role of Stock Exchanges in today's markets
    • Major exchanges in the US, Europe, the Middle East, and Asia

Financial Markets Regulation:

  • Capital Adequacy Requirements
  • Basel I
  • Basel II
  • Basel III and its implications
  • Origins of New Product Development

Asset Classes and Their Markets

  • What is traded on Stock Exchanges today?
  • Equities – Common and Preferred
  • Bonds – Corporate and Government
  • Bonds – Fixed, Floating, and Zero Coupon, plus the Yield Curve
  • Money Market instruments
  • Foreign exchange markets
  • Investor motivations for buying and selling
  • Income vs. Capital Gain
  • Interrelationships between various asset classes
  • Connections between Exchange-traded and Over-The-Counter (OTC) markets

The Short-Term Money Market

  • Certificates of Deposit
  • T-Bills
  • Commercial Paper
  • Trade Paper & Bankers' Acceptances
  • Market norms and practices
  • Market participants

Types of Stock Exchange Investors

  • 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

  • Where are these products traded?
  • The significance of the OTC market
  • Historical development of Stock Exchanges
  • Key Stock Exchanges in today's markets
  • US, European, and Asian markets and their differing architectures
  • Asset classes traded on various Stock Exchanges globally
  • Major Primary and Secondary markets
  • New York, Euronext, London, Shanghai, Hong Kong
  • Why 'listed' companies attract investors
  • Using Stock Exchanges to pool liquidity and raise capital
  • Methods of Capital Raising
  • Going public ('Floating') – various methods

Clearing & Settlement

  • Settlement and settlement risk
  • Different Settlement Conventions in major markets
  • Equities, Bonds, and derivatives
  • The process for Derivatives Clearing
  • The Central Counterparty (CCP)
  • CCP services provided to Stock Exchanges
  • Margin
  • The security trade settlement process
  • Pre-settlement
  • Settlement
  • Potential issues – unmatched trades, delayed settlement, failed delivery
  • Stock Exchange Settlement Discipline
  • The 'life cycle of a trade' – linking the process from trade to settlement
  • The role of International Central Securities Depositories (ICSDs) and Central Securities Depositories (CSDs) – LCH.Clearnet, Euroclear, Crest, Clearstream International, the DTC

Custody

  • The role of Custodians in the Stock markets
  • Settlement and safe keeping
  • Income collection and Corporate Actions
  • Cash management and funding transactions
  • Additional services
  • Accounting
  • Stock Lending and collateral management
  • Trustee services
  • Valuation reports

Alternative Investments

  • What are Alternative Investments?
  • Structured products – Risks and returns
  • Hedge funds – Risks and Control
  • Venture Capital – Valuation issues, Risk and Control
  • Private Equity/Angel Finance
  • The use of derivatives in Asset Management
  • OTC vs ETD
  • Types of Derivatives used in Asset Management
  • Futures
  • Options
  • Risks and controls associated with derivatives, including documentation, valuation, and reporting issues

Managing Quoted Equity Investments

  • Risks associated with acquiring securities
  • Risks associated with managing securities
  • Risks associated with corporate actions
  • Pricing of quoted equity investments
  • Major sources of risk
  • General controls within equity investment
  • Risks associated with international equity markets

Managing Quoted Fixed Income Investments

  • Risks associated with acquiring and disposing of fixed income securities
  • The use of ratings and associated risk issues
  • Risks associated with pricing fixed income securities
  • Risk and controls within corporate fixed income processing
  • Risks associated with Government Securities
  • Sovereign risk ratings
  • Valuation of government securities
  • Risk and controls within sovereign bond processing

Market and Credit Risks in Global Markets

  • Market risks
  • VAR calculations
  • Market risk modelling
  • Credit Risks
  • Measuring Credit risks
  • Global Market Risks
  • Money Market Risks
  • OTC Risks
  • Exchange risks
 14 Hours

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