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Course Outline

The Global Capital Markets

  • Defining the 'financial market place'
  • Historical evolution of modern global financial markets
  • The influence of financial media
  • Structure of major capital markets:
    • Exchanges, Clearing houses, and Regulators
    • The recent surge in global investment activity
    • Classification of 'Stock Exchanges'
    • The positioning of Stock Exchanges in today's market landscape
    • Overview of US, European, Middle Eastern, and Asian Stock Exchanges

Regulation of Financial Markets:

  • Capital Adequacy Requirements
  • Basel I
  • Basel II
  • Basel III and its regulatory implications
  • Sources for new product development

Asset Classes and Their Respective Markets

  • Current trading instruments on Stock Exchanges
  • Equities – Common and Preferred stock
  • Bonds – Corporate and Government issues
  • Bonds – Fixed rate, Floating rate, and Zero coupon; Understanding the Yield Curve
  • Money Market instruments
  • Currency markets
  • Investor motivations: Drivers for buying and selling
  • Differentiating Income versus Capital Gain
  • Interrelationships among various asset classes
  • The interplay between Exchange-traded and Over-The-Counter (OTC) markets

Short-Term Money Markets

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

Types of Stock Exchange Investors

  • Individual and Institutional Investors
  • Fund Managers
  • Hedge Funds
  • Direct Stock Exchange participants
  • Investment banks, Stockbrokers, Hedge Funds, and Prime Brokers
  • Intra-market dynamics – The buy-side and sell-side of the industry

The Function of the Stock Exchange

  • Trading venues for financial products
  • The significance of the OTC market
  • Historical development of Stock Exchanges
  • Leading Stock Exchanges in the current global landscape
  • Comparative analysis of US, European, and Asian Market architectures
  • Asset classes traded on global Stock Exchanges
  • Distinguishing 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 pool liquidity and raise capital
  • Strategies for Capital Raising
  • 'Floating' a company – Various methodologies

Clearing & Settlement

  • Settlement mechanics and associated risks
  • Varying Settlement Conventions across major markets
  • Settlement for Equities, Bonds, and derivatives
  • The Derivatives Clearing process
  • The Central Counterparty (CCP)
  • CCP services delivered to Stock Exchanges
  • Margin requirements
  • The security trade settlement workflow
  • Pre-settlement procedures
  • Final Settlement
  • Common issues – Unmatched trades, settlement delays, and failed deliveries
  • Stock Exchange Settlement Discipline
  • The 'life cycle of a trade' – Connecting trade execution to settlement
  • Roles of International Central Securities Depositories (ICSDs) and Central Securities Depositories (CSDs) – including LCH.Clearnet, Euroclear, Crest, Clearstream International, and the DTC

Custody Services

  • The function of Custodians in Stock markets
  • Settlement and asset safekeeping
  • Income collection 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 – Analysis of risks and returns
  • Hedge funds – Risk assessment and control mechanisms
  • Venture Capital – Valuation challenges, risk, and control
  • Private Equity and Angel Finance
  • Application of derivatives in Asset Management
  • OTC versus ETD (Exchange Traded Derivatives)
  • Categories of Derivatives utilized in Asset Management
  • Futures
  • Options
  • Risk and control frameworks for derivatives, covering documentation, valuation, and reporting

Managing Quoted Equity Investments

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

Managing Quoted Fixed Income Investments

  • Risks associated with the acquisition and disposal of fixed income securities
  • Utilization of credit ratings and related risk considerations
  • Pricing risks in fixed income securities
  • Risk and control measures in corporate fixed income processing
  • Risks specific to Government Securities
  • Sovereign risk ratings
  • Valuation methods for government securities
  • Risk and control frameworks in sovereign bond processing

Market and Credit Risks in Global Investing

  • Understanding Market risks
  • Value at Risk (VAR) calculations
  • Market risk modeling techniques
  • Overview of Credit Risks
  • Methodologies for measuring Credit risks
  • Global Market Risks
  • Money Market Risks
  • OTC Risks
  • Exchange-based risks
 14 Hours

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