CS PROFESSIONAL ELECTIVE 2 - CAPITAL, COMMODITY & MONEY MARKET

MODULE 3 ELECTIVE PAPER 2

CAPITAL, COMMODITY & MONEY MARKET

Economic Framework

1. Basic structure of Flow of funds in the economy;

2. Capital Markets its Role in Capital formation, Functions of Liquidity, Resource Allocation and Transaction Cost-reduction

Legal Framework

1. Ministry of Finance (Capital Markets Division, Department of Economic Affairs)

2. Ministry of Corporate Affairs

3. Companies Act, 1956

4. SEBI Act, 1992

5. Securities Contracts (Regulation) Act, 1956 (SCRA)

6. Depositories Act, 1996

7. SEBI Regulations and Guidelines- An Overview, SEBI (Prohibition of Insider Trdaing) Regulations, 1992, SEBI (Substantial Acquisitions of Shares and Takeovers) Regulations, 2011 (SAST)

8. Prevention of Money Laundering Act, 2002

9. Grievance Redressal Mechanism: Stock Exchange (Investor Protection Fund), SEBI, Securities Appellate Tribunal (SAT), Supreme Court

10. Enforcement: Economic Offences Wing, Financial Intelligence Unit, Central Bureau of Investigation, Financial Action Task Force (FATF)

Financial Intermediaries Framework

1. Framework of Market Infrastructure Institutions (MII), Stock Exchanges Clearing Corporations, Custodians

2. Depositories, Depository Participants, Registrars and Transfer Agents (RTA), Bankers to issue

3. Merchant Bankers, Underwriters, Investment Advisors, Portfolio Managers, Self Certified Syndicate Banks

4. Brokers, Sub-brokers, Market-makers

5. Credit Rating Agencies

Primary Markets

1. IPO, FPO, Offer for Sale, Private Placement, Preferential Allotment, Institutional Placement Procedures (IPP), Qualified Institutional Placement (QIP), Rights Issue, Bonus Issue

2. Prospectus, DRHP, Shelf Prospectus, Red Herring prospectus

3. Private Investment in Public Equity (PIPE)

4. SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009

5. Lead Manager (Pre & Post Issue Activities)

6. Due Diligence Review

7. Underwriting obligations

8. Basis of Allotment

9. Book-building

10. Pre-issue and Post-issue activities,

11. Green-shoe Option

12. Pre-listing and Post-listing activities, Listing Agreement

Secondary Markets

1. Opening day (listing)

2. Continuing compliance obligations and disclosures: Post-listing activities, Corporate Actions

3. Requirements for Continuing Listing

4. Corporate Governance Norms

5. Disclosures as per Listing Agreement: Price Sensitive Information, Material Changes, Quarterly results

6. Functioning of an Exchange: Margining, Trading, Clearing and Settlement, Trade Guarantee Fund, Trading Software, Arbitration Mechanism

7. Stock Market Indices

Capital Market Investment Institutions

1. Domestic Financial Institutions (DFI), Qualified Institutional Buyers (QIB), Foreign Institutional Investors (FII) , Private Equity (PE), Angel Funds, HNIs, Venture Capital (VC), Qualified Foreign Investors (QFI), Mutual Funds, Alternative Investment Funds (AIF), Hedge Funds, Pension Funds

Capital Market Instruments

1. Equities

2. Preference Shares, Shares with Differential Voting Rights (DVR)

3. Corporate Debt: Non Convertible Debentures (NCD), Partly-and Fully-Convertible Debentures (PCD, FCD)

4. NCDs with or without Call and Put Features

5. Bonds, Foreign Currency Convertible Bonds (FCCB)

6. Indian Depository Receipts (IDR)

7. Derivatives: Single Stock Futures, Single Stock Options, Index futures (SENSEX, NIFTY), Index Options, Interest Rate Futures, Currency futures

8. Exchange Traded Funds (ETF)

9. Warrants

Resource Mobilization through International Markets

1. Global Depository Receipt (GDR)

2. American Depository Receipt (ADR)

3. Listing on the London Alternative Investment Market (AIM), NASDAQ, NYSE

Landmark Studies and Report of Committees on Capital Markets

Economics of Commodities Marketing

1. Economic Rationale for Commodities Trading Place and store value

2. Perishables and non-perishables

3. Tangibles and Intangibles (Weather , Freight)

4. How resources can be optimized through price hedges

Commodities Market Operations

1. Origin of Commodity Market in India

2. Products, Participants and Functions

3. Evolution of Commodity Exchanges; Regulatory Framework

4. Structure Of Commodity exchanges, membership, Risk Management, Clearing and Settlement System, Commodities Traded on Stock Exchanges Platform-NCDEX, MCX-SX

5. Instruments available for Trading

6. Using commodity exchanges for Hedging, Speculation and Arbitrage

Introduction to Money Market

1. Nature & Deployment of Surplus Funds and Raising of Short-term funds, Characteristics of Money Market

2. Regulatory framework of RBI, FIMMDA (Fixed Income, Money Market and Derivatives Association) and Foreign Exchange Dealers Association of India (FEDAI)

3. Call Money Market-Players, Utility, Money market Instruments: Commercial Paper, Certificates of Deposits, Bills of Exchange, Treasury Bills (T-Bills), Bill Discounting, Factoring, Letter of Credit, Money Market Mutual Funds, Fixed Maturity Plans