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 Duration 14 hours

Course Outline

The Global Capital Markets

  • Defining the 'financial market place'
  • The historical evolution of the contemporary global financial market
  • The influence of financial media
  • Architectural structure of major capital markets:
    • Roles of Exchanges, Clearers, and Regulators
    • The recent surge in global investment activity
    • Distinguishing between various types of 'Stock Exchanges'
    • The positioning of Stock Exchanges within the current market landscape
    • Comparing US, European, Middle Eastern, and Asian Stock Exchanges

Financial Markets Regulation:

  • Capital Adequacy Requirements
  • Basel I
  • Basel II
  • Basel III and its strategic implications
  • Driving new product development through regulatory insights

The Different Asset Classes and Their Markets

  • Current tradable instruments on Stock Exchanges
  • Equities: Common and Preferred shares
  • Bonds: Corporate and Government issues
  • Bond structures: Fixed, Floating, and Zero-coupon rates, along with the Yield Curve
  • Money Market instruments
  • Currency markets
  • Investor motivations for buying and selling
  • Income generation versus Capital Gains
  • Interdependencies among various asset classes
  • The interplay between Exchange-traded and Over-The-Counter (OTC) markets

Short Term Money Market

  • Certificates of deposit
  • Treasury Bills (T Bills)
  • Commercial paper
  • Trade paper and Bank Acceptances (BAs)
  • Established market norms and practices
  • Key market participants

The Different Types of Stock Exchange Investors

  • 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

  • Trading venues for specific products
  • The significance of the OTC market
  • Historical development of Stock Exchanges
  • Leading Stock Exchanges in the modern market
  • Architectural differences across US, European, and Asian Markets
  • Asset classes traded on global Stock Exchanges
  • 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 to aggregate liquidity and raise capital
  • Strategies for Capital Raising
  • 'Floating' a company: Various methodologies

Clearing & Settlement

  • Settlement mechanics and associated risks
  • Settlement conventions in major markets
  • Processing Equities, Bonds, and derivatives
  • The workflow for Derivatives Clearing
  • The function of the Central Counterparty (CCP)
  • CCP services supporting Stock Exchanges
  • Margin requirements
  • The security trade settlement process
  • Pre-settlement procedures
  • Final Settlement
  • Addressing potential issues: unmatched trades, settlement 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
  • 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

  • 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
  • OTC versus ETD markets
  • Types of Derivatives used in Asset Management
  • Futures
  • Options
  • Risk and control frameworks for derivatives, covering documentation, valuation, and reporting

The Management of Quoted Equity Investment

  • Risks inherent in acquiring securities
  • Risks associated with ongoing securities management
  • Risk factors linked to corporate actions
  • Pricing mechanisms for quoted equity investments
  • Primary sources of risk
  • Standard controls within equity investment portfolios
  • Risks specific to international equity markets

The Management of Quoted Fixed Income Investment

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

The Market and Credit Risks of Investing in the Global Market

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

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