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Course Outline

The Global Capital Markets

  • Defining a 'financial marketplace'
  • Historical evolution of today's global financial markets
  • The influence of financial media
  • Structure of major capital markets:
    • Exchanges, Clearers, and Regulators
    • The rise of global investment
    • Diverse types of 'Stock Exchanges'
    • The role of Stock Exchanges in modern markets
    • Overview of US, European, Middle Eastern, and Asian Stock Exchanges

Financial Markets Regulation:

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

Asset Classes and Their Markets

  • Current trading activities on Stock Exchanges
  • Equities – Common and Preferred
  • Bonds – Corporate and Government
  • Bonds – Fixed, Floating, and Zero coupon; the Yield Curve
  • Money Market instruments
  • Currency markets
  • Investor motivations: Buying and Selling drivers
  • Income versus Capital Gain
  • Interrelationships among asset classes
  • Interaction between Exchange-traded and Over-The-Counter (OTC) markets

Short-Term Money Market

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

Types of Stock Exchange Investors

  • Individual Investors
  • Fund Managers
  • Hedge Funds
  • Stock Exchange Participants
  • Investment Banks, Stockbrokers, Hedge Funds, and Prime Brokers
  • Intra-market relationships – Buy-side and Sell-side dynamics

The Role of the Stock Exchange

  • Where products are traded
  • The significance of the OTC market
  • Historical development of Stock Exchanges
  • Leading Stock Exchanges in today's markets
  • US, European, and Asian Markets: Architectural differences
  • Asset classes traded on global Stock Exchanges
  • Primary and Secondary markets
  • Key exchanges: New York, Euronext, London, Shanghai, Hong Kong
  • Attractions of 'listed' companies for investors
  • Using Stock Exchanges to pool liquidity and raise capital
  • Capital raising methods
  • Methods of 'Floating' a company

Clearing & Settlement

  • Settlement and settlement risk
  • Settlement conventions in major markets
  • Equities, Bonds, and Derivatives
  • Derivatives Clearing process
  • The Central Counterparty (CCP)
  • CCP services for Stock Exchanges
  • Margin requirements
  • Security trade settlement process
  • Pre-settlement
  • Settlement
  • Potential issues – unmatched trades, delayed settlement, bad delivery
  • Stock Exchange Settlement Discipline
  • The 'life cycle of a trade' – linking 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 stock markets
  • Settlement and safekeeping
  • Income collection and Corporate Actions
  • Cash management and funding transactions
  • Additional services
  • Accounting
  • Stock Lending and collateral management
  • Trustee services
  • Valuation reports

Alternative Investments

  • Definition of Alternative Investments
  • Structured products – Risks and returns
  • Hedge funds – Risks and controls
  • Venture Capital – Valuation, Risk, and control
  • Private Equity / Angel Finance
  • Use of derivatives in Asset Management
  • OTC versus ETD
  • Types of Derivatives used in Asset Management
  • Futures
  • Options
  • Risks and controls related to derivatives, including documentation, valuation, and reporting

Management of Quoted Equity Investments

  • Risks in acquiring securities
  • Risks in managing securities
  • Risks from Corporate Actions
  • Pricing of quoted equity investments
  • Major sources of risk
  • General controls within equity investment
  • Risks in international equity markets

Management of Quoted Fixed Income Investments

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

Market and Credit Risks in Global Investing

  • 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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