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Course Outline

The Global Capital Markets

  • Definition of a financial marketplace
  • Historical evolution of today's global financial markets
  • The role of financial media
  • Structure of major capital markets:
    • Exchanges, Clearing Houses, Regulators
    • The modern surge in global investment
    • Different types of Stock Exchanges
    • The place of Stock Exchanges in today's markets
    • US, European, Middle Eastern, and Asian Stock Exchanges

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, Zero Coupon, and the Yield Curve
  • Money Market instruments
  • Foreign Exchange markets
  • Motivations for buying and selling assets
  • Income versus Capital Gain
  • Interrelationships between various asset classes
  • The interaction between Exchange-traded and Over-The-Counter markets

Short-Term Money Markets

  • Certificates of Deposit
  • Treasury 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 – the buy-side and sell-side 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
  • Major Stock Exchanges in current markets
  • US, European, and Asian Markets and their differing architectures
  • Asset classes traded on various global Stock Exchanges
  • The distinction between Primary and Secondary markets
  • Key hubs: New York, Euronext, London, Shanghai, Hong Kong
  • Why "listed" companies attract investors
  • Utilizing Stock Exchanges to pool liquidity and raise capital
  • Methods of Capital Raising
  • Going public – different methods of "floating" a company

Clearing & Settlement

  • Settlement processes 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 requirements
  • The security trade settlement process
  • Pre-settlement procedures
  • Settlement execution
  • Potential issues – unmatched trades, delayed settlement, failed delivery
  • Stock Exchange Settlement Discipline
  • The "life cycle of a trade" – linking the process from execution 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 Control
  • Venture Capital – Valuation, 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

Management of 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

Management of 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 of Investing 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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