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Course Outline

Global Capital Markets

  • Defining the concept of a 'financial marketplace'
  • The historical evolution of today's global financial markets
  • The influence of financial media
  • Structural components of major capital markets:
    • Exchanges, Clearing houses, and Regulatory bodies
    • The recent surge in global investment activity
    • Variations in 'Stock Exchange' types
    • The positioning of Stock Exchanges within contemporary markets
    • Comparative 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 consequential impacts
  • Drivers for New Product Development

Asset Classes and Their Corresponding Markets

  • Current instruments traded on Stock Exchanges
  • Equities – Ordinary and Preferred
  • Bonds – Corporate and Sovereign
  • Bonds – Fixed-rate, Floating-rate, and Zero-coupon; Yield Curves
  • Money Market instruments
  • Currency markets
  • Motivations for buying and selling investments
  • Income versus Capital Gains
  • Interdependencies 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 and Bank Acceptances
  • Standard market norms and practices
  • Key market participants

Types of Stock Exchange Investors

  • General Investors
  • Fund Managers
  • Hedge Funds
  • Direct Stock Exchange participants
  • Investment Banks, Brokers, Hedge Funds, and Prime Brokers
  • Intra-market dynamics – the buy and sell sides of the industry

The Function of the Stock Exchange

  • Locations of product trading
  • The significance of the OTC market
  • Historical progression of Stock Exchanges
  • Principal Stock Exchanges in the current landscape
  • Architectural differences in US, European, and Asian Markets
  • Asset classes traded on global Stock Exchanges
  • Key Primary and Secondary markets
  • New York, Euronext, London, Shanghai, and Hong Kong
  • The appeal of 'listed' companies to investors
  • Leveraging Stock Exchanges for liquidity pooling and capital raising
  • Strategies for Capital Raising
  • 'Floating' a company – various methodologies

Clearing & Settlement

  • Settlement processes and associated risks
  • Divergent Settlement Conventions in major markets
  • Handling Equities, Bonds, and derivatives
  • The Derivatives Clearing process
  • The Central Counterparty (CCP) role
  • CCP services offered to Stock Exchanges
  • Margin requirements
  • The security trade settlement workflow
  • Pre-settlement phases
  • Final Settlement
  • Potential issues – unmatched trades, settlement delays, failed deliveries
  • Stock Exchange Settlement protocols
  • The 'life cycle of a trade' – integrating processes from trade 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 duties
  • Income collection and 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 – Risk and Return profiles
  • Hedge funds – Risk management and Control
  • Venture Capital – Valuation challenges, Risk, and Control
  • Private Equity and Angel Finance
  • Application of derivatives in Asset Management
  • OTC versus Exchange-Traded Derivatives (ETD)
  • Derivatives types utilized in Asset Management
  • Futures
  • Options
  • Risks and controls related to derivatives, covering documentation, valuation, and reporting

Managing Quoted Equity Investments

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

Managing Quoted Fixed Income Investments

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

Market and Credit Risks in Global Market Investing

  • Market risk identification
  • Value at Risk (VaR) calculations
  • Market risk modelling techniques
  • Credit risk assessment
  • Measuring Credit risks
  • Global Market risk factors
  • Money Market risks
  • OTC market risks
  • Exchange-related risks
 14 Hours

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