Financial Markets Training Course

The Global Capital Markets

• What is a ‘financial market place’
• Historical development of today’s global financial market
• The role of the financial media
• Structure of the major capital markets:
  • Exchanges, Clearers, Regulators
  • The modern day surge in global investment
  • The different types of ‘Stock Exchanges’
  • Where Stock Exchanges fit in today’s markets
  • US, European, Middle Eastern and Asian Stock Exchanges

• Capital Adequacy Requirement
• Basel I
• Basel II
• Basel III and its implications
• Source for New Product Development

• What is traded on Stock Exchanges today?
• Equities – Common and Preferred
• Bonds – Corporate and Government
• Bonds – Fixed, Floating and Zero coupon, the Yield Curve
• Money Market instruments
• The currency markets
• Why do investors buy them, and what makes them sell?
• Income/Capital Gain
• The relationships between the various asset classes
• How Exchange traded and Over-The-Counter markets interrelate

• Certificates of deposit
• T Bills
• Commercial paper
• Trade paper & BAs
• Market norms and practices
• Market participants

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

• Where are these products traded?
• The importance of the OTC market
• The past development of Stock Exchanges
• The main Stock Exchanges in today’s markets
• US, European and Asian Markets and their differing architecture
• Asset classes traded on different Stock Exchanges around the world
• The major Primary and Secondary markets
• New York, Euronext, London, Shanghai, Hong Kong
• The attraction of “listed” companies to investors
• Using Stock Exchanges to pool liquidity and raise capital
• Methods of Capital Raising
• ‘Floating’ the company – different methods

• Settlement and settlement risk
• The different Settlement Conventions in the 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 problems – unmatched trades, delayed settlement, bad delivery
• Stock Exchange Settlement Discipline
• The ‘life cycle of a trade’– how the process links up 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

• 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

• 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

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

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

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