NCFM - Overview
NCFM: NSE's Certification in Financial Markets is a nationally recognized certification which is mandatory for various professionals in capital markets in India. Individuals aspiring to enter the financial services industry in India have better prospects if they first get the NCFM certification.
NCFM (NSE’s Certificate in Financial Markets) is a Certificate exam conducted by National Stock Exchange of India. NCFM is the most Essential prerequisite recognized by corporate across the country to work in a Financial Markets.
The preparatory module is very useful Certificate Exam for those who wish to work in this industry. We would be guiding the aspirants on the procedure for applying to this exam, training in following modules of NCFM with a very practical approach and techniques to usefully clear this Exam
Give your Career a Shining Path According to an Estimate – “There is a requirement of around 5.3 Lakh professionals every year in the Financial Markets industry ".
Spectramind - the institute is managed by an Industry professional, and Strives to provides a complete Current Industry feel & the Essential Industry Insights as a part of the curriculum
SPECTRAMIND's training programme provides a holistic understanding of the relevant financial sector (viz: capital markets, derivatives, mutual funds, depositories, surveillance aspects etc) WITH emphasis on the test areas. Participants are supported with multiple mock test to assess performance in the certification test.
Further information about the modules is available below. For full details, please visit the NCFM Website. [http://www.nseindia.com/content/ncfm/ncfm_curriculum.htm]
NCFM Modules Spectramind currently offers training for the following modules:
1. Financial Markets: A Beginners' Module
Topics
Markets and Financial Instruments (Chapters 1 – 2) (30 Marks) **
• Types of Markets: Equity, debt, derivatives, commodities, meaning and features of private, public companies; types of investment avenues: Fixed Deposits, Bank Deposits, Provident Fund, Life Insurance, Post Office Savings, Small savings, Gold, Mutual Funds, Equity Share, Debentures/Bonds.
Primary Market (Chapter)(15 Marks)
• Initial Public Offer (IPO), Book Building through Online IPO, Eligibility to issue securities, Pricing of Issues, Fixed versus Book Building issues, Allotment of Shares, Basis of Allotment, Private Placement.
Secondary Market (Chapters 4 – 8) (40 marks) **
• Role and Functions of : Securities and Exchange Board of India (SEBI), Depositories, Stock Exchanges, Stock Price Indices, Brokers, Sub-brokers, Foreign Institutional Investors (FIIs), Portfolio Managers, Custodians, Share Transfer Agents, Know Your Client, Member Constituent Agreement, Merchant Bankers, Bankers to an Issue, Debenture Trustees, Underwriters, Credit Rating Agencies, Listing, Membership, Screen-based trading, Client Code, Contract Note, Price-time priority, Price Bands, Clearing and Settlement, Rolling Settlement, Settlement Guarantee Fund (SGF), Margins, Investor Protection Fund (IPF), Do’s and Don’ts for investors.
**Financial Statement Analysis (Chapters 9 and 10) (15 Marks) **
• Balance Sheet, Profit & Loss Account, Stock Market Related Ratios
• Simple Analysis before investing in the shares: sources of information, understanding Annual Report, Director’s report etc.
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 500 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
2. Derivatives Market (Dealers) Module
Topics
**1. Introduction to derivatives (7 Marks) **
• Definition,
• Products
• Participants and functions (Types of members to be included)
• Types of derivatives
• Exchange-traded vs. OTC derivatives markets.
• Derivatives market at NSE (including turnover)
**2. Market Index: (8 Marks) **
• Understanding the index number
• Index construction
• Desirable attributes of an Index
• Types of indexes
• The S&P CNX Nifty (Introduction, components)
• Applications of Index
**3. Introduction to futures and options (10 Marks) **
• Forward contracts
• Limitations of forward markets
• Introduction to futures
• Distinction between futures and forwards contracts
• Futures terminology
• Introduction to options
• Option terminology
• Distinction between Futures and options
• Index derivatives
**4. Application of Futures & Options (10 Marks) **
• Payoff for derivatives contracts (futures and options)
• Difference between trading securities and trading futures on individual securities
• Use of Futures (Only simple strategies of hedging, speculation and arbitrage)
o Index futures
o Stock futures
• Use of Options (Only simple strategies of hedging, speculation and arbitrage)
o Index options
o Stock options
**5. Trading (25 Marks) **
• Futures and options trading system
• Entities in the trading system
• Basis of trading
• Corporate hierarchy
• Order types and conditions
• The trader workstation
• The market watch window
• Inquiry window
• Placing orders on the trading system
• Market spread/ combination order entry
• Basket trading
• Futures and options market instruments (include interest rate futures)
• Contract specifications for index futures
• Contract specification for index options
• Contract specifications for stock futures
• Contract specifications for stock options
• Contract cycle
• Eligibility of stocks for futures and option trading
• Determination of market lot
• Quantity freeze
• Charges
**6. Clearing and settlement (25 Marks) **
• Clearing entities
• Clearing members
• Clearing banks
• Clearing mechanism
• Settlement mechanism
• Settlement of futures contracts
• Settlement of options contracts
• Special facility for settlement of institutional deals
• Risk Management Systems (Volatility, types of margins & SPAN)
• Adjustments for corporate actions
7. Regulatory framework (15 Marks) **
• Securities Contracts(Regulation) Act
• Securities and Exchange Board of India Act, 1992
• Regulation for derivatives trading
L.C Gupta committee Report
J.R Varma committee report
• Rules, Regulations and Byelaws of NSEIL
• Rules, Regulations and Byelaws of NSCCL
• Accounting and Taxation issues
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM**
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
++3. Capital Market (Dealers) Module
Topics
1. Trading
Introduction
Neat System
Market Types – Normal Market, Odd Lot Market, Retail Debt Market, Auction Market
Corporate Hierarchy
Local Database
Market Phases - Opening, Open Phase, Market Close, Surcon
Logging on
Log Off/Exit from the Application
Neat Screen
Invoking An Inquiry Screen - Market Watch, Security Descriptor, Market by Price, Previous Trades, Outstanding Orders, Activity Log, Order Status, Snap Quote, Market Movement, Market Inquiry, Auction Inquiry, Security/Portfolio List, Multiple Index Broadcast and Graph, Online Backup, Basket trading, Buy Back Trades, Supplementary Functions
Order Management - Entering Orders, Order Modification, Order Cancellation, Order Matching
Trade Management – Trade Modification, Trade Cancellation
Auction - Entering Auction Orders, Auction Order Modification, Auction Order Cancellation, Auction Order Matching
Limited Physical Market
Retail Debt Market (RDM)
Trading Information Downloaded to Members
Internet Broking
Wireless Application Protocol
2. Clearing and Settlement
Introduction - Transaction Cycle, Settlement Process, Settlement Agencies, Risks in Settlement
Settlement Cycle
Securities Settlement
Funds Settlement
Shortages Handling
Risk Containment Measures - Capital Adequacy Requirements, Margins, Settlement Guarantee, No-Delivery Period
International Securities Identification Number
Dematerialisation And Electronic Transfer of Securities
Investor Protection Fund
Clearing Software – Reports
File Transfer Protocol
3. Trading Membership
Stock Brokers – Introduction, Membership in NSE
Sub-Brokers
o Broker-Clients Relations - Know Your Client, Unique Client Code, Margins from the Clients, Execution of Orders, Accumulation of Orders, Contract Note, Payments/Delivery of Securities to the Clients, Brokerage, Payment of Stamp Duty, Segregation of Bank Accounts
o Sub-Broker-Client Relations - Know Your Client, Orders, Purchase/Sale Note, Payments/Delivery of Securities, Sub-Brokerage
o Dispute, Arbitration and Appeal
o Code of advertisement
4. Legal Framework
Securities Contracts (Regulation) Act, 1956
Securities Contracts (Regulation) Rules, 1957
Securities and Exchange Board of India Act, 1992
SEBI (Stock Brokers & Sub-Brokers) Rules, 1992
SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992
SEBI (Insider Trading) Regulations, 1992
SEBI (Prohibition of Fraudulent And Unfair Trade Practices Relating to Securities Markets) Regulations, 1995
The Depositories Act, 1996
Indian Contract Act, 1872
The Companies Act, 1956
Public Debt Act, 1944
Income Tax Act, 1961
5. An Overview of the Indian Securities Market
Introduction - Market Segments, Products and Participants
A Profile - Dependence on Securities Market, Investor Population
Primary Market
Secondary Market
Derivatives Market
Market Design - Primary Market, Secondary Market, Derivatives Market
Regulatory Framework
Research in Securities Market
Testing and Certification
6. Fundamental Valuation Concepts
Elementary Statistical Concepts - Mean, Geometric Mean, Variance, Standard Deviation, Coefficient of Variation, Covariance, Correlation Coefficient, Normal Distribution
Time Value of Money – Future Value of A Single Cash Flow, Future Value of an Annuity, Present Value of a Single Cash Flow, Present Value of an Annuity
Understanding Financial Statements - Comparative Financial Statements, Common Size Statements, Ratio Analysis
Equity Research - Bhav Copy Database, Index Database, Order Book Snapshots, Database, Trades Database
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
4. Securities Market (Basic) Module
** TOPICS**
1. Securities Market in India — an Overview
Securities Market and Financial System
Products, Participants and Functions
Securities Market and Economic Development
Investor Population and Behaviour
Financing of Corporate and Government
Primary Market, Secondary Market, Derivatives Market
Institutions – Regulators, Exchanges, Depositories, Clearing Corporations
Regulatory Framework
2. Primary Market
Market Design - DIP Guidelines, 2000, Book Building, Credit Rating, Merchant Banking, On-line IPOs, Demat Issues, Private Placement, Virtual Debt Portals, ADRs/GDRs, Other Regulations
Market Outcome - Public Issues, Euro Issues, Debt Issues
Collective Investment Vehicles - MFs, VCFs, CISs
3. Secondary Market
Market Design – Exchanges, Membership, Listing, Trading and Settlement Mechanism, Technology
Trading Rules – Insider Trading, Unfair Trade Practices, Takeovers, Buy back
Market Outcome – Turnover, Market Capitalisation, Prices, Liquidity, Transaction Costs
Risk Management,
Indexes
4. Government Securities Market
Primary Market
Secondary market – NDS, CCIL, WDM
5. Derivatives Market
Products, Participants and Functions
Market Design - Trading Mechanism, Membership, Contract Specification, Clearing & Settlement
Market Outcome – Turnover, Open Interest, Implied Interest Rate, Implied Volatility
Risk Management
Debt Derivatives
6. Regulatory Framework
Legislations, Rules and Regulations
Accounting & Taxation
7. Mathematics and Statistics
Mean, Standard Deviation, Normal Distribution, Covariance and Correlation
Risk and Return Measures
Fundamental and Technical Analysis
Financial Statement Analysis
8. Corporate Finance
Capital Budgeting
Capital Structure
Time Value of Money
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
5. FIMMDA-NSE Debt Market (Basic) Module
**TOPICS **
1. Debt Instruments: Fundamental Features
Instrument Features, Modifying the coupon of the bond, Modifying the term to maturity of a bond, Modifying the principal repayment of a bond, Asset backed securities
2. Indian Debt Markets: A Profile of Products and Participants
Market Segments, Participants in the Debt Markets, Secondary Market for Debt Instruments
3. Central Government Securities: Bonds
Introduction, Developments Expected, G-Secs: Trends in Volumes, Tenor and Yields, Primary Issuance Process, Participants in Government Bond Markets, Constituent SGL Accounts, Primary Dealers, Satellite Dealers, Secondary Markets for Government Bonds, Settlement of Trades in G-Secs, Clearing Corporation, Negotiated Dealing System, Liquidity Adjustment Facility (LAF).
4. Central Government Securities: Treasury Bills
Issuance Process, Cut-Off Yields, Investors in T-Bills, Secondary Market Activity in T-bills.
5. State Government Bonds
Gross Fiscal Deficit of State Governments and its financing, Volume and Coupon rates on State Government Bonds, Ownership Pattern of State Government Bonds, and State Government Guaranteed Bonds.
6. Call Money Markets
Volumes in the call market, Participants in the call markets, Call Rates, Movement of
Participants from Call to Repo Markets.
7. Corporate Debt: Bonds
Market Segments, Issue Process, Issue Management and Book Building, Terms of a debenture issue, Credit Rating.
8. Commercial Paper & Certificate of Deposits
Guidelines for CP Issue, Rating notches for CPs, Growth in the CP market, Stamp Duty,
Certificates of Deposit.
9. Repos
Introduction and definition, Repo Rate, Calculating settlement amounts in Repo transactions, Advantages of Repos, Repo Market in India: Some Recent Issues, Secondary Market Transactions in Repos, Summary of Recommendations of the Technical Sub Group on Repos .
10. Bond Market Indices and Benchmarks
I-Bex : Sovereign Bond Index, NSE – MIBOR
11. Trading Mechanism in the NSE-WDM
Description of the NSE WDM, Order Types and Conditions, Market Phases and Starting Up, Trading Mechanism, Order Entry in Negotiated Trades Market, Order Validation, Order Matching, Trade Management, Reports, Settlement, Rates of Brokerage
12. Regulatory and Procedural Aspects
Public Debt Act, 1944, SEBI (Guidelines for Disclosure and Investor Protection), 2000, Market Practices and Procedures
13. Valuation of bonds
Bond Valuation: First principles, Time path of a bond, Valuing a bond at any point on the time scale, Accrued Interest, Yield, Weighted Yield, YTM of a Portfolio, Realised Yield, Yield–Price relationships of bonds
14. Yield Curve and Term Structure of Interest Rates
Yield Curve: The Simple Approach, Bootstrapping, Alternate Methodologies to Estimate the Yield Curve, Theories of the Term Structure of Interest Rates
15. Duration
Introduction and Definition, Calculating Duration of a Coupon Paying Bond, Computing duration on dates other than coupon dates, Modified Duration, Rupee Duration, Price Value of a Basis Point, Portfolio Duration, Limitations of Duration
16. Fixed Income Derivatives
What are Fixed Income Derivatives, Mechanism of Forward Rate Agreements, Interest Rate Futures, Interest Rate Swaps
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
6. Surveillance in Stock Exchanges Module
Topics
**Chapter 1 (2 marks) **
Introduction
• Importance of surveillance in stock exchanges
**Chapter 2 (20 marks) **
Basic Investment Mathematics
• Return on equity, Earning per share, Cash earning per share, Price to earning ratio, Book value, Market price, Intrinsic value, Capital gains, value of a right, value of bonus, cost of equity, cum dividend price, ex dividend price, bond valuation.
• Beta, concept, calculation and significance, Stock indices.
• Time value of money, present value, future value, compound value, annuities, amortization, discount rate, internal rate of return, equal monthly instalments. Pay back period, internal rate of return, net present value, Return on investment.
• Financial statements, Net worth, current assets, current liability, debt to equity ratio, current ratio, current assets, Understanding and interpreting of financial statements, interpretation of credit ratings.
**Chapter 3 (30 marks) **
Rules and Regulations
• Securities Contracts Regulation Act, 1956 and Rules, 1957.
• Recognition of Stock Exchanges, periodical returns to SEBI, Power of SEBI to make or amend Exchange Rules and Bye-laws, power to supersede governing board of exchanges, power to suspend business of recognised stock exchanges (Section 3 to 12) Contracts in securities contracts in notified areas illegal or void in certain circumstances, members may not act as principals in certain circumstances, power to prohibit contacts in certain cases.
• Qualification for membership of recognised stock exchanges, books of account and other documents to be preserved by the recognised stock exchanges and their members, listing requirements, etc.
• Securities and Exchange Board of India Act, 1992
• Role and Functions – General Powers, regulating the business in stock exchanges and any other securities market, registering and regulating the working of stock brokers, sub-brokers, share transfer agents and such other intermediaries who may be associated with the securities markets in any manner.
• SEBI to regulate all intermediaries in securities business, penalties for failure to follow rules and regulations, power to adjudicate, appellate procedure.
• SEBI (Stock Brokers and sub-brokers Regulations, requirements of contract notes, regulations of transactions between clients and brokers.
• SEBI guidelines on disclosures and investor protection (DIP) w.s.r.t. disclosure norms, SEBI (insider trading) Regulations, the definition of insider, person deemed to be a connected person, Unpublished price sensitive information, responsibilities of insider. SEBI substantial acquisition of shares and take over regulations, SEBI Regulation on prohibition of fraudulent and unfair trade practices relating to securities markets, prohibition against market manipulation, prohibition of misleading statements to induce sale or purchase of securities, prohibition on unfair trade practices relating to securities. Corporate governance.
• Power of SEBI to order investigation, procedure for investigation, duty to produce records, power of the board to issue direction, purpose of direction, suspension or cancellation of registration of an intermediary holding a certificate of registration. Code of ethics for employees of stock exchanges.
**Chapter 4 (15 marks) **
Surveillance of market activity
• Monitoring real time price/volume details and its analysis.
• Generate parameterized alerts for further scrutiny using stock watch systems with market safety (Risk) and integrity (manipulation in marketplace) as objective.
• Tracking price sensitive news and verify rumours and dissemination to the marketplace.
**Chapter 5 (25 marks) **
Role of surveillance in risk management
• Settlement guarantee mechanism through risk containment measures.
• Capital requirements (Base capital & Additional Base Capital).
• Gross exposure and intraday turnover limits based on available capital. Online position monitoring and real time warnings for violations.
• Margin requirements: Computation, collection and refund of margins in accordance with SEBI/Exchange guidelines. Concept of gross margining.
**Chapter 6 (8 marks) **
Preliminary analysis and Investigation
• Processing of alerts/cases received from surveillance group, regulatory bodies and market intelligence to ascertain the possibility of manipulation/insider trading.
• Data analysis to ascertain patterns and trends to shortlist trading members and securities for further scrutiny. Tracking client wise positions through “Unique Client Code” entered during order punching.
• Conducting detailed investigation of shortlisted cases to ascertain anomalies and referring them to DAC where involvement is at trading member level. Other cases are referred to the Regulator.
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
**7. NSDL - Depository Operations Module **
1. Overview of the Capital Market
1.1 Overview of relevant laws, regulations
1.2 Primary Market
1.3 Secondary Market
1.4 Capital Market Intermediaries
2. Overview of NSDL
2.1 Features of Depository System
2.2 Legal Framework
2.3 Organisation structure of NSDL
2.4 Bye-Laws & Business Rules of NSDL
2.5 NSDL System & Connectivity
3. Business Partners of NSDL
3.1 Business Partners of NSDL
Eligibility, Joining – Procedure/steps, Services, Records and Reconciliation, Rights & Obligations
3.2 CCs/ CHs
Eligibility, Admission criteria
3.3 Issuers and Registrar & Share Transfer Agents
Eligibility, Services, Records and Reconciliation, Rights & Obligations,
Role of RTAs in demat and remat
3.4 NSDL Application software
3.5 Hardware Requirements of business partners
3.6 Service Standards
3.7 Benefits & Safety
4. Services Offered by Depository
4.1 Account Opening
Beneficiary Account - Salient Features, Procedure, Precautions
Clearing Member Account - Salient Features, Procedure, Precautions
Intermediary Account - Salient Features, Procedure, Precautions
4.2 Transmission & Nomination
4.3 Dematerialisation
Salient Features, Procedure, Precautions
4.4 Rematerialisation
Salient Features, Procedure, Precautions
4.5 Trading & Settlement
Salient Features, Off-market/market transfers, Pay-in, Pay-out,
Settlement of Trades, Precautions
4.6 Internet initiatives by NSDL
Speed-e, Ideas, Steady
5. Special Services
5.1 Pledging/ Hypothecation
Salient Features, Procedures for Creating, Confirming, Closing and
Invoking a Pledge, Precautions
5.2 Securities Lending & Borrowing
Salient Features, Procedures for lending & borrowing, Repay of
securities borrowed, Recall of securities lent
5.3 Corporate Actions
Non-cash Corporate Actions
Cash Corporate Actions
Payment of interest on Debt instrument by NSDL
5.4 Public Issues
5.5 Units of Mutual Funds
Salient Features, Procedure, Precautions and Distinguishing features in
respect of US-64
5.6 Debt instruments
Salient Features, Mode of Operations, Procedure for Certificate of
Deposits (CD), Commercial Papers etc.
5.7 Government Securities (G-Sec)
Salient Features, Procedure for dematerialisation & rematerialisation of
physical certificates, G-sec in SGL form to Depository a/c, Precautions
5.8 NSC/KVP in Dematerialisation
Features and advantages
5.9 Dematerialisation of Warehouse Receipts - Features
5.10 MAPIN & TIN – Overview
6. Charges
Salient Features, NSDL Charges and DP Charges
7. Safety
General, Specific and System Level, Benefits and Safety
8. Progress
(Numbers as given in the NEST update)
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
8. Commodities Market Module
1. Introduction to Derivatives
Derivatives defined
Types of derivatives:
o Financial derivatives
o Commodity derivatives
Products, participants and functions
Exchange–traded versus OTC derivatives
2. Commodity Derivatives
How they differ from financial derivatives
o Warehousing
o Quality of underlying assets
Global commodities exchanges
Commodities exchanges in India (regional & national)
Commodities permitted for trading
Kabra Committee Report (Roadmap)
Commodity specific issues
o Cropping and growth patterns
o Global and domestic demand- supply dynamics
o Price trends and factors that influence prices
3. Instruments available for trading
Types of instruments (future, options)
Basics
Payoffs
4. Pricing commodity derivatives
5. Using commodity derivative markets
Hedging
Speculation
Arbitrage
6. The NCDEX platform
About NCDEX
Exchange membership
Rules, regulations, byelaws
7. Commodities to be traded on the NCDEX platform.
Types of commodities
o Bullion (silver & gold)
o Agricultural commodities
8. Trading on the NCDEX platform
o Contract specifications
o Trading system
o Entities in the trading system
o Trader workstation
o Order types and conditions
o Exposure limits
9. Clearing, Settlement and Risk Management
Calendar and settlement schedule
Position determination
Settlement mechanism
o Daily Mark to Market Settlement
Settlement price
o Daily settlement price
o Final settlement price
Margining
o Initial margin
o Daily Mark to Market margin
o Open interest limits
o Second Line of Defence
o NSCCL SPAN@
Final settlement
o Cash settlement
o Physical settlement(Warehousing)
Exception Handling
o Funds Shortages
o Delivery Shortages
10. Regulatory Framework
Rules governing Commodity Derivatives Exchanges
Rules governing Intermediaries
Investor Grievances, Arbitration Rules
11. Accounting and Taxation issues
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
9. AMFI - Mutual Fund (Basic) Module
TOPICS
** CHAPTER ONE : CONCEPT AND ROLE OF MUTUAL FUNDS**
Section One
The concept of a Mutual Fund; Advantages of Mutual Fund investing- Portfolio Diversification, Professional Management, Reduction of Risk, Transaction Costs and Taxes, Liquidity and Convenience.
Section Two
Evolution of Mutual Funds in India - Size of Industry, Growth Trends
Role of Mutual Funds in Financial Markets
Section Three
Types of Funds
Open-end Funds/Closed-end Funds/Fixed Term Plans, Load Funds/No Load Funds, Tax Exempt/Non Tax Exempt Funds, Exchange Traded Funds, Fund of Funds
Money Market/Liquid Funds, Equity Funds, Debt Funds, Hybrid Funds, Commodity Funds, Real Estate Funds, Fund of Funds.
Equity Funds- Aggressive Growth Funds, Small Cap Funds, Growth Funds, Growth and Income Funds, Value Funds, Equity Income Funds, Equity Linked Saving Schemes, Index Funds, Sector Funds, Specialised Funds, Offshore Funds, Option Income Funds
Debt Funds- Bond Funds, Government Securities Funds, Specialised Bond Funds- Infrastructure/Real Estate, Mortgage Backed Securities Funds; High Yield Bond Funds; Offshore/Global Bond Funds/Country Funds, Assured Return Funds and Fixed Term Plans
Hybrid Funds- Balanced Funds, Growth & Income Funds, Asset Allocation Funds
Commodity Funds- Precious Metals/Gold Funds, Single versus Multi Commodity Funds
CHAPTER TWO : FUND STRUCTURE AND CONSTITUENTS
Section One
Legal structure-
Closed end and Open end Funds
Asset Management Company, Trustees/Trust Companies
Legal Status of Fund Sponsors
Rights and Responsibilities of the AMC Directors, Trustees (SEBI, Companies Act)
Fiduciary Nature of Relationship between Investor and Fund
Legal Structure in the U. S. -Investment Companies, Management Companies and Advisors
Legal Structure in the U. K.- Unit Trusts, Trustees
Section Two
Role, Functions, Rights and Responsibilities of Other Market Constituents
Registrars, Bankers, Custodians, Depositories
Marketing and Distribution Participants – Individual Distributors, Banks, NBFCs, Stock Brokers, Sub-Brokers
Section Three
Fund mergers and Scheme Takeovers
CHAPTER THREE :LEGAL AND REGULATORY ENVIRONMENT
Section One
Role of regulators in India
SEBI, RBI, Ministry of Finance, Stock Exchanges, Registrar of Companies, CLB, DCA
Section Two
Regulation versus Self Regulation - Role of AMFI, Investor Associations, Consumer Forums/Courts
Section Three
Rights and Obligations of the Investor
CHAPTER FOUR : THE OFFER DOCUMENT
Section One
Introduction
The Offer Document – What it is, Importance, Contents, Regulation and Investors Rights
Section Two
Contents of the Offer Document
Standard Offer Document for Mutual Funds (SEBI Format)
Summary Information
Glossary of Defined Terms
Risk Disclosures
Legal and Regulatory Compliance
Expenses
Condensed Financial Information of Schemes
Constitution of the Mutual Fund
Investment Objectives and Policies
Management of the Fund
Offer Related Information
Section Three
Key Information Memorandum
CHAPTER FIVE: FUND DISTRIBUTION AND SALES PRACTICES
Section One
• The Challenge of Distributing Mutual Funds
• Who Can Invest in MFs in India
Section Two
• Distribution channels
Role of Direct Marketing by Mutual Funds in India
Broker/Sub Broker Arrangements
Individual Agents, Brokers, Sub-Brokers, Banks, NBFCs
Section Three
• Sales Practice
CHAPTER SIX : ACCOUNTING, VALUATION AND TAXATION
In India, mutual funds are regulated by SEBI, which lays down the regulations for fund accounting and valuation of securities. The Income Tax Act, 1961 lays down the relevant tax provisions that govern mutual funds. This chapter outlines the major elements of mutual fund accounting, valuation and taxation norms as applicable to mutual funds in India.
Section One
• Accounting
SEBI Regulations on
NAV Computation
Pricing of Units
Fees and Expenses
Initial Issue Expenses
Disclosures and Reporting Requirements
Accounting Policies
Section Two
• Valuation
Marking to Market
Equity Valuation Norms - Listed, Unlisted, Untraded/Thinly traded
Debt Valuation Norms - Listed, Unlisted, Thinly traded/Illiquid
Money Market Instruments Valuation Norms
Non Performing Assets (NPA) Norms
** Section Three**
• Taxation
Taxation of Mutual Funds
Taxation of Income and Gains in the Hands of Investors
CHAPTER SEVEN : INVESTOR SERVICES
Section One
• Applying for or account opening with Mutual Fund -
Application/Agreement, Provisions of the Agreement, Point of Receipt, Form of Payment, First Time versus Continuing Payments, Certificate vs. No Certificate
Registering a mutual fund Account - Individual, Joint, Corporate, Trusts, etc.
Repurchase and redemption options
Cut-off Times for Submissions of Requests, Historical vs. Prospective NAVs
Section Two
• Different investment plans and services by Mutual Funds-
Accumulation Plans, Systematic Investment Plans, Automatic Reinvestment Plans, Retirement Plans, Switching Within a Family of Funds, Voluntary Withdrawal Plans, Redeeming units
Services Performed by Mutual Funds- Nomination Facilities, Phone Transactions/Information, Check Writing, Pass Books, Periodic Statements and Tax Information - Statutory, Others
Loans Against Unit
CHAPTER EIGHT : INVESTMENT MANAGEMENT
Section One
• Equity portfolio management
How to identify which kind of Stocks to include
Review of the Indian Equity Market
Types of Equity Instruments
Equity Classes
• Based on Market Capitalisation
• Based on Anticipated Earnings
Approaches to Portfolio Management
• Passive: Index Funds
• Active: Growth and Value Investment Styles
• Role of Research in Equity Fund Management
• Successful Equity Portfolio Management
• Use of Equity Derivatives for Portfolio Risk Management
Organization Structure of Equity Funds
Section Two
• Debt Portfolio Management
Classification of Debt Securities
A Review of the Indian Debt Market
Instruments in the Indian Debt Market
Basic Characteristics of Money Market Securities
Basic characteristics of Debt Securities
Measures of Bond Yields- Current Yield, YTM, Yield Curve
Risks in Investing in Bonds
• Credit Risk- Yield Spreads and Credit Ratings
• Interest Rate Risk- Duration
Debt Investment Strategies
Interest Rates and Debt Portfolio Management
Use of derivatives for Debt Portfolio Management
Organization Structure of Debt Funds
Section Three
• SEBI Investment Guidelines and Restrictions on Investment Portfolios- Structure, Timing of Investments, Permissible Instruments
CHAPTER NINE : MEASURING AND EVALUATING MUTUAL FUND PERFORMANCE
When an investor entrusts his savings to a mutual fund, naturally he hopes to increase his wealth by seeing the value of his investments grow. Having understood the conceptual and operating aspects of mutual funds, it is important to analyze the issues involved in the evaluation of fund performance.
Section One
• Performance Measures-
Equity Funds
NAV Growth, Total Return; Total Return with Reinvestment at NAV, Annualised Returns and Distributions, Computing Total Return (Per Share Income and Expenses, Per Share Capital Changes, Ratios, Shares Outstanding), the Expense Ratio, Portfolio Turnover Rate, Fund Size, Transaction Costs, Cash Flow, Leverage
Debt Funds
Peer Group Comparisons, The Income Ratio, Industry Exposures and Concentrations, NPAs, besides NAV Growth, Total Return, Expense Ratio
Liquid Funds
Fund Yield, besides NAV Growth, Total Return, Expense Ratio
Differences between Active versus Passive Fund performance, Equity vs. Debt Fund Performance
Passive Funds Performance against Base Index, Tracking Error, Expenses
Performance Measurement- NAV change
Analyzing fund Management- Relative Importance of Factors: Total Return of Different Types of Funds
Section Two
• Concept of Benchmarking for Performance Evaluation
Performance Benchmarks in the Indian Context -
Active Equity Fund Performance against Market Indices as Benchmarks
Debt Funds- Interest Rates on Alternative Investments as Benchmarks, I-Bex Total Return Index, JPM T-Bill Index Post-Tax Returns on Bank Deposits versus Debt Funds
Liquid Funds- Short Term Government Instruments’ Interest Rates as Benchmarks, JPM T-Bill Index
Section Three
• Tracking a Fund’s Performance- Newspapers, Periodicals, Research Reports, Annual Reports, Prospectus, Reports from Tracking Agencies, Internet and Interpretation of Data
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
10. AMFI - Mutual Fund (Advisors) Module
**CHAPTER ONE : **
CONCEPT AND ROLE OF MUTUAL FUNDS
Section One
The concept of a Mutual Fund; Advantages of Mutual Fund investing- Portfolio Diversification, Professional Management, Reduction of Risk, Transaction Costs and Taxes, Liquidity and Convenience.
Section Two
Evolution of Mutual Funds in India - Size of Industry, Growth Trends
Role of Mutual Funds in Financial Markets
Section Three
Types of Funds
Open-end Funds/Closed-end Funds/Fixed Term Plans, Load Funds/No Load Funds, Tax Exempt/Non Tax Exempt Funds, Exchange Traded Funds, Fund of Funds
Money Market/Liquid Funds, Equity Funds, Debt Funds, Hybrid Funds, Commodity Funds, Real Estate Funds, Fund of Funds.
Equity Funds- Aggressive Growth Funds, Small Cap Funds, Growth Funds, Growth and Income Funds, Value Funds, Equity Income Funds, Equity Linked Saving Schemes, Index Funds, Sector Funds, Specialised Funds, Offshore Funds, Option Income Funds
Debt Funds- Bond Funds, Government Securities Funds, Specialised Bond Funds- Infrastructure/Real Estate, Mortgage Backed Securities Funds; High Yield Bond Funds; Offshore/Global Bond Funds/Country Funds, Assured Return Funds and Fixed Term Plans
Hybrid Funds- Balanced Funds, Growth & Income Funds, Asset Allocation Funds
Commodity Funds- Precious Metals/Gold Funds, Single versus Multi Commodity Funds
CHAPTER TWO : FUND STRUCTURE AND CONSTITUENTS
Section One
Legal structure-
Closed end and Open end Funds
Asset Management Company, Trustees/Trust Companies
Legal Status of Fund Sponsors
Rights and Responsibilities of the AMC Directors, Trustees (SEBI, Companies Act)
Fiduciary Nature of Relationship between Investor and Fund
Legal Structure in the U. S. -Investment Companies, Management Companies and Advisors
Legal Structure in the U. K.- Unit Trusts, Trustees
Section Two
Role, Functions, Rights and Responsibilities of Other Market Constituents
Registrars, Bankers, Custodians, Depositories
Marketing and Distribution Participants – Individual Distributors, Banks, NBFCs, Stock Brokers, Sub-Brokers
Section Three
Fund mergers and Scheme Takeovers
CHAPTER THREE : LEGAL AND REGULATORY ENVIRONMENT
Section One
Role of regulators in India
SEBI, RBI, Ministry of Finance, Stock Exchanges, Registrar of Companies, CLB, DCA
Section Two
Regulation versus Self Regulation - Role of AMFI, Investor Associations, Consumer Forums/Courts
Section Three
Rights and Obligations of the Investor
CHAPTER FOUR : THE OFFER DOCUMENT
Section One
Introduction
The Offer Document – What it is, Importance, Contents, Regulation and Investors Rights
Section Two
Contents of the Offer Document
Standard Offer Document for Mutual Funds (SEBI Format)
Summary Information
Glossary of Defined Terms
Risk Disclosures
Legal and Regulatory Compliance
Expenses
Condensed Financial Information of Schemes
Constitution of the Mutual Fund
Investment Objectives and Policies
Management of the Fund
Offer Related Information
Section Three
Key Information Memorandum
CHAPTER FIVE:FUND DISTRIBUTION AND SALES PRACTICES
Section One
• The Challenge of Distributing Mutual Funds
• Who Can Invest in MFs in India
Section Two
• Distribution channels
Role of Direct Marketing by Mutual Funds in India
Broker/Sub Broker Arrangements
Individual Agents, Brokers, Sub-Brokers, Banks, NBFCs
Section Three
• Sales Practices
CHAPTER SIX: ACCOUNTING, VALUATION AND TAXATION
In India, mutual funds are regulated by SEBI, which lays down the regulations for fund accounting and valuation of securities. The Income Tax Act, 1961 lays down the relevant tax provisions that govern mutual funds. This chapter outlines the major elements of mutual fund accounting, valuation and taxation norms as applicable to mutual funds in India.
Section One
• Accounting
SEBI Regulations on
NAV Computation
Pricing of Units
Fees and Expenses
Initial Issue Expenses
Disclosures and Reporting Requirements
Accounting Policies
Section Two
• Valuation
Marking to Market
Equity Valuation Norms - Listed, Unlisted, Untraded/Thinly traded
Debt Valuation Norms - Listed, Unlisted, Thinly traded/Illiquid
Money Market Instruments Valuation Norms
Non Performing Assets (NPA) Norms
** Section Three
• Taxation**
Taxation of Mutual Funds
Taxation of Income and Gains in the Hands of Investors
CHAPTER SEVEN
INVESTOR SERVICES
Section One
**• Applying for or account opening with Mutual Fund - **
Application/Agreement, Provisions of the Agreement, Point of Receipt, Form of Payment, First Time versus Continuing Payments, Certificate vs. No Certificate
Registering a mutual fund Account - Individual, Joint, Corporate, Trusts, etc.
Repurchase and redemption options
Cut-off Times for Submissions of Requests, Historical vs. Prospective NAVs
Section Two
**• Different investment plans and services by Mutual Funds- **
Accumulation Plans, Systematic Investment Plans, Automatic Reinvestment Plans, Retirement Plans, Switching Within a Family of Funds, Voluntary Withdrawal Plans, Redeeming units
Services Performed by Mutual Funds- Nomination Facilities, Phone Transactions/Information, Check Writing, Pass Books, Periodic Statements and Tax Information - Statutory, Others
Loans Against Units
CHAPTER EIGHT : ** INVESTMENT MANAGEMENT**
Section One
• Equity portfolio management
How to identify which kind of Stocks to include
Review of the Indian Equity Market
Types of Equity Instruments
Equity Classes
• Based on Market Capitalisation
• Based on Anticipated Earnings
Approaches to Portfolio Management
• Passive: Index Funds
• Active: Growth and Value Investment Styles
• Role of Research in Equity Fund Management
• Successful Equity Portfolio Management
• Use of Equity Derivatives for Portfolio Risk Management
Organization Structure of Equity Funds
Section Two
• Debt Portfolio Management
Classification of Debt Securities
A Review of the Indian Debt Market
Instruments in the Indian Debt Market
Basic Characteristics of Money Market Securities
Basic characteristics of Debt Securities
Measures of Bond Yields- Current Yield, YTM, Yield Curve
Risks in Investing in Bonds
• Credit Risk- Yield Spreads and Credit Ratings
• Interest Rate Risk- Duration
Debt Investment Strategies
Interest Rates and Debt Portfolio Management
Use of derivatives for Debt Portfolio Management
Organization Structure of Debt Funds
Section Three
• SEBI Investment Guidelines and Restrictions on Investment Portfolios- Structure, Timing of Investments, Permissible Instruments
CHAPTER NINE : MEASURING AND EVALUATING MUTUAL FUND PERFORMANCE
When an investor entrusts his savings to a mutual fund, naturally he hopes to increase his wealth by seeing the value of his investments grow. Having understood the conceptual and operating aspects of mutual funds, it is important to analyze the issues involved in the evaluation of fund performance.
Section One
• Performance Measures-
Equity Funds
NAV Growth, Total Return; Total Return with Reinvestment at NAV, Annualised Returns and Distributions, Computing Total Return (Per Share Income and Expenses, Per Share Capital Changes, Ratios, Shares Outstanding), the Expense Ratio, Portfolio Turnover Rate, Fund Size, Transaction Costs, Cash Flow, Leverage
Debt Funds
Peer Group Comparisons, The Income Ratio, Industry Exposures and Concentrations, NPAs, besides NAV Growth, Total Return, Expense Ratio
Liquid Funds
Fund Yield, besides NAV Growth, Total Return, Expense Ratio
Differences between Active versus Passive Fund performance, Equity vs. Debt Fund Performance
Passive Funds Performance against Base Index, Tracking Error, Expenses
Performance Measurement- NAV change
Analyzing fund Management- Relative Importance of Factors: Total Return of Different Types of Funds
Section Two
• Concept of Benchmarking for Performance Evaluation
Performance Benchmarks in the Indian Context -
Active Equity Fund Performance against Market Indices as Benchmarks
Debt Funds- Interest Rates on Alternative Investments as Benchmarks, I-Bex Total Return Index, JPM T-Bill Index Post-Tax Returns on Bank Deposits versus Debt Funds
Liquid Funds- Short Term Government Instruments’ Interest Rates as Benchmarks, JPM T-Bill Index
Section Three
• Tracking a Fund’s Performance- Newspapers, Periodicals, Research Reports, Annual Reports, Prospectus, Reports from Tracking Agencies, Internet and Interpretation of Data
CHAPTER TEN :**HELPING INVESTORS WITH FINANCIAL PLANNING **
Section One
• The Concept of Financial Planning for the Investor
Financial Planning – Definition and Scope
Need for Professional Financial Planning
Role of a Financial Planner
Need for a Fund Distributor to become a Financial Planner
Benefits of Financial Planning
Qualities of a Good Financial Planner
The Financial Planning Process
Common Mistakes in Financial Planning
The Investor/Client's Responsibilities
The Place of Mutual Funds in Financial Planning
Section Two
• The Basis of Financial Planning – Life Cycle Stages
Childhood
Young Unmarried
Young Married
Young Married with Children
Married with Older Children
Post-family/Pre-retirement
Retirement
• The Basis of Financial Planning – Wealth Cycle Stages
The Accumulation Phase
The Transition Phase
The Distribution Phase
The Inter-Generation Transfer Stage
The Sudden Wealth Stage
Planning for Affluent Investors
**CHAPTER ELEVEN **
**RECOMMENDING FINANCIAL PLANNING STRATEGIES TO INVESTORS **
Section One
Financial Planning Strategies - Investing for the Long Term
- Power of Compounding
Strategies to Maximise Returns on Investment
- Buy and Hold, Rupee Cost Averaging, Value Averaging
- Investing Early, Investing Regularly, Cashing Out
Section Two
Asset Allocation - Meaning and Principles
Strategic and Tactical Asset Allocation
Fixed versus Flexible Asset Allocation
CHAPTER TWELVE : SELECTING THE RIGHT INVESTMENT PRODUCTS FOR INVESTORS
Once the investor has been helped with a suitable Financial Plan, a Strategy and an appropriate Asset Allocation, the advisor ought to review all investment options available to the investor including the mutual funds. In one of the previous chapters, we discussed the importance of benchmarking fund performance relative to other investment products available in the market. This chapter describes the financial products available to investors in India and compares their investment potential relative to mutual funds.
Section One
• Products available in India
• Shares, Bonds and Debentures, Bank and Company Deposits, Small Savings Instruments, PPF, Insurance, Gold, Real Estate and Mutual Funds
Section Two
• Comparison based on Return, Safety, Liquidity, Convenience
Investing through MFs versus Other Investment Products
Comparison in terms of Investment objectives, Expected Returns and Potential Risks of Mutual Funds and Other Products
Investor Perspective: Comparison in terms of Investor Objectives/Expectations, Risk Tolerance and Investment Horizon
Direct Equity Investment versus Mutual Fund Investing
Bank Deposits versus Income and Debt Funds
CHAPTER THIRTEEN: HELPING INVESTORS UNDERSTAND RISKS IN FUND INVESTING
While reviewing mutual fund investing against other products, and while selecting the right funds, investors must be explained the risks that are inherent in fund investing and in different types of funds.. Helping investors understand these risks is a major responsibility of the advisor.
Section One
• Awareness of Risks in Mutual Fund Investing
Measures of Equity Fund Risks- Equity Fund Price Movements versus Market Index, Peer Group/Competitor Performance Comparison
Measures of Debt Fund Risks- Debt Fund Returns/Nominal and Real Interest Rates, Guaranteed Income or Assured Return Funds, Fund Volatility versus Index for Fixed Income Securities
Impact of Diversification on Fund Risk Profile
Measures of Fund Risk Level : Sharpe and Treynor Ratios
Attribution Analysis- Measuring Portfolio Manager’s Skills
Measurement of Risks Using the Prospectus, Annual and Quarterly Returns
Types of Risk faced by Funds/Investors - Credit Risk, Interest Rate Risk, Price Risk, Liquidity Risk; Company Risk, Sector Risk, Market Risk
Risk Measurement- Debt versus Equity not a Comparison- Debt is for the Risk Averse Investor
Risk-Return Relationship, Optimisation, and Optimal Risk Level for Varied Classes of Investors
CHAPTER FOURTEEN
RECOMMENDING MODEL PORTFOLIOS AND SELECTING THE RIGHT FUNDS
Once financial planning has been done, and the investment options reviewed, the financial planner needs to help the investor build a suitable portfolio of mutual funds and then select the right funds to attain the investment objectives of the investor. This chapter covers these important final steps in financial advisory activity.
Section One
• Developing a Model Portfolio
Developing an Investment Portfolio Suited to Investor Needs/Life Cycle Stages
Developing an Investment Portfolio Suited to Investor Needs/Wealth Cycle Stages
Investment Options- Equity Instruments, Fixed Income Securities, Quasi-Equity Instruments- Convertible Debentures/Bonds, Warrants, etc., Taxable and Tax Exempt Funds
Asset Allocation
Section Two
• Helping the investor choose a Fund based on Selection Criteria-
Objective, Yield, Load, Annual Total Return, Portfolio Diversification, Risk Level, Long Term Track Record, Services Provided and Management Expertise
Costs of Ownership- Management Fees, Share Transfer Agent Fees, Custodian Fees, Redemption Fees, Switching Fees, Maintenance Fees
Distribution Costs and Commissions Payable- Front End Loads, Ongoing Sales and Service Charges, Contingent Deferred Sales Charges, Other Fees
Agent’s commissions, Rebates to Investors, Advisory Fees
Impact of Age Profile of Investor on Fund Selection
Understanding the Investment Objective of a Mutual Fund Scheme
Appreciation of Capital Market Volatility
Reasons for Fluctuations in a Fund’s NAV
• Selecting an Equity Fund, a debt Fund, a Balanced Fund and a Money Market Fund
Chapter Fifteen : Business Ethics for Mutual Funds
Section One – Understanding Business Ethics
1.1 What is Meant by Business Ethics?
1.2 What is the Need for Business Ethics?
1.3 Business Ethics in Practice : Examples
1.4 Objectives of Business Ethics
1.5 Some Key Terms of Business Ethics
**Section Two – Fund Regulators and Business Ethics **
2.1 Business Ethics and Fund Regulation in India
2.1.1 Regulators’ Responsibilities
2.1.2 Regulatory Objectives
2.1.2.1 Fund Structure and Ethics – a Fiduciary Responsibility for Mutual Funds
2.1.2.2 Fund Governance
2.1.2.2.1 Regulatory Requirements
2.1.2.3 Exercise of Voting Rights by Funds
2.1.2.4 Fund Operations
2.1.2.5 Fund Publicity and Advertisements
2.1.3 Ethics related Regulations
2.1.3.1 Guidelines of Good Conduct for AMCs and TCs – Personal Trading
2.1.3.2 Regulations on Personal Trading
2.1.3.3 Regulations on Insider Trading
2.1.3.4 Regulations on Fund Advertisements
2.1.3.5 Compliance Officer
2.1.3.6 Board Review and Reporting to SEBI
2.1.3.7 Code of Conduct for Distributors
**2.2 Business Ethics and Fund Regulation in the U.S. **
2.2.1 Fund Governance
2.2.2 Investment Adviser Codes of Ethics
2.2.3 Ethical Issues and Responsible Investing
2.2.4 New Regulations and Fair Business Practices
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
11. Corporate Governance Module
Topics
1. Evolution of Corporate Governance in India & Abroad.
2. Provisions regarding Corporate Governance in the Listing Agreement.
3. Board Governance & Independence.
4. Board Systems & Procedures.
5. Board Committees.
6. Disclosure Requirements.
7. Reporting Requirements.
8. Related Party Transactions.
9. Compliance of Conditions of the Listing Agreement with respect to Corporate
Governance.
Start Date: March 29th ,2008
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
12. Compliance Officers (Brokers) Module
Topics
**1. The Securities and Exchange Board of India Act, 1992 (MARKS – 10) **
• Definitions
• Establishment of SEBI
• Powers and functions of the Boards
• Registration certificate
• Prohibition of manipulative devices, insider trading and substantial acquisition of securities or control
• Finance, accounts and audit
• Penalties and adjudication
• Establishment, jurisdiction, authority and procedure of appellate tribunal
• Miscellaneous
**2. The Securities Contract (Regulations) Act, 1956 (MARKS – 10) **
**3. The Securities Contracts (Regulation) Rules, 1957 (MARKS – 10) **
• Definitions
• Contracts between members of recognized stock exchange
• SEBI nominees on the governing bodies of recognized stock exchange
• Obligation of the governing body to take disciplinary action against a member if so directed by SEBI
• Audit of accounts of members
• Withdrawal of recognition
• Books of accounts and other documents to be maintained by every member of a recognized stock exchange
• Manner of inquiry
• Submission of annual report, periodical returns
• Manner of publication of bye-laws
• Requirements with respect to the listing of securities on a recognized stock exchange
• Requirements with respect to the listing of units or any other instrument of a collective investment scheme on a recognized stock exchange
**4. SEBI (Stock Brokers and Sub Brokers) Rules and Regulations, 1992 (MARKS – 10) **
• Definitions
• Registration of stock-brokers
• Registration of sub-brokers
• Registration of trading and clearing members
• General obligations and responsibilities
• Procedure for inspection
• Procedure for action in case of default
**5. NSE Rules, Regulations and Byelaws (MARKS – 10) **
**6. NSCCL Rules, Regulations and Byelaws (MARKS – 10) **
**7. Circulars (MARKS – 20) **
• NSE circulars as enforced from time to time
• NSCCL circulars as enforced from time to time
• SEBI circulars in secondary market
• MOF circulars in secondary market
** (Chapters 8-9)( MARKS – 10) **
8. SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003
9. SEBI (Prohibition of Insider Trading) Regulations, 1992
** (Chapters 10-13)( MARKS – 10)
10. SEBI (Portfolio Managers) Regulations and Rules, 1993**
11. SEBI (Underwriters) Regulations and Rules, 1993
12. SEBI(Ombudsman) Regulations, 2003
13. SEBI (Procedure for Holding Enquiry by Enquiry Officer and imposing penalty) Regulations, 2002
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
13. Compliance Officers (Corporates) Module
TOpics
**1. Companies Act, 1956 (15 marks) **
• Title, Definitions
• Incorporation of a company and matters incidental thereto
• Prospectus and Allotment, other matters relating to issue of shares or debentures
o Prospectus
o Allotment
o Commissions and discounts
o Issue of shares at premium and discount
o Issue and redemption of preference shares
o Further issue of capital
• Share capital and debentures
o Nature, numbering and certificate of shares
o Kinds of share capital
o Miscellaneous provisions as to share capital
o Reduction of share capital
o Variation of shareholder’s rights
o Transfer of shares and debentures
o Issue of certificate of shares, etc
o Share warrants
o Penalty for personation of shareholder
o Special provisions as to debentures
• Management and administration
o Registered office and name
o Restrictions on commencement of business
o Registers of members and debenture holders
o Foreign registers of members or debenture holders
o Annual returns
o General provisions regarding registers and returns
o Meetings and proceedings
o Prohibition of simultaneous appointment of different categories of managerial personnel
o Managerial remuneration etc
o Prevention of management by undesirable persons
o Restriction on appointment of firms and bodies corporate to offices
o Dividends and manner and time of payment thereof
o Payments of interest out of capital
o Accounts
o Audit
o Power of registrar to call for information
o Investigation
• Winding up
o Winding up by the court
o Voluntary winding up
**2. Securities Contracts (Regulation) Act, 1956 (10 marks) **
• Definitions
• Listing of securities
• Penalties and procedure
• Miscellaneous
**3. Depositories Act, 1996 (5 marks) **
• Definitions
• Rights and obligations of depositories, participants, issuers and beneficial owners
o Agreement between depository and participant
o Services of depository
o Surrender of certificate of security
o Registration of transfer of securities with depository
o Options to receive security certificate or hold securities with depository
o Securities in depositories to be in fungible form
o Rights of depositories and beneficial owner
o Register of beneficial owner
o Pledge or hypothecation of securities held in a depository
o Furnishing of information and records by depository and issues
o Option to opt out in respect of any security
o Depository to indemnify loss in certain cases
o Rights and obligations of depositories, etc
• Enquiry and inspection
• Penalty
• Miscellaneous
**4. Provisions under Securities and Exchange Board of India (substantial acquistion of shares and takeovers) Regulations, 1997 (10 marks) **
• Applicability of the Regulation
Power of the Board to grant exemption
• Disclosures of shareholding and control in a listed company
• Substantial acquisition of shares or voting rights in and acquisition of control over a listed company
• Bail out takeovers
• Investigation and action by the board
**5. Preferential issue guidelines as given in SEBI (DIP) Guidelines, 2000 (10 marks) **
Chapter XIII - Guidelines for preferential issues of SEBI (Disclosure & Investor Protection), Guidelines, 2000.
• Pricing of the issue
• Pricing of shares arising out of warrants, etc
• Pricing of shares on conversion
• Currency of financial instruments
• Non-transferability of financial instruments
• Currency of shareholders resolutions
• Other requirements
• Preferential allotment to FII
• Non applicability of the guidelines
**6. ESOS guidelines as per SEBI (ESOS and ESPS) Guidelines, 2000 (10 marks) **
SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999.
• Eligibility to participate in ESOS
o Compensation Committee
o Shareholder approval
o Variation of terms of ESOS
o Pricing
o Lock-in period and rights of the option-holder
o Consequence of failure to exercise option
o Non transferability of option
o Disclosure in the Directors' Report
o Accounting Policies
o Certificate from Auditors
o Options outstanding at Public Issue
• Eligibility to participate in ESPS
o Shareholder Approval
o Pricing and Lock-in
o Disclosure and Accounting Policies
o Preferential Allotment
o Listing
o Commencement of the Guidelines
o Accounting Policies for ESOS
**7. Compliance with the provisions of the listing agreement (15 marks) **
Clause 49 of listing agreement - for Corporate Governance
• Board of Directors
• Audit Committee
• Remuneration of Directors
• Board Procedure
• Management
• Shareholders
• Report on Corporate Governance
• Compliance
Clause 41 of listing agreement - for limited information
• Reporting of segment wise revenue, results and capital employed
• Accounting for taxes on income
• Alternative format for un-audited financial results
• Qualifications in Audit Reports
• Quarterly disclosures by companies which are yet to commence commercial production
Clause 36 of listing agreement - for Disclosure of Material Information in addition you could also look at Clause 35, 40(A) and 16 of the listing agreement.
• Change in he general character or nature of business
• Disruption of operations due to natural calamity
• Commencement of commercial production / commercial operations
• Developments with respect to pricing / realization arising out of change in the regulatory framework
• Litigation / dispute with a material impact
• Revision in ratings
• Any other information having bearing on the operation / performance of the company as well as price sensitive information which includes but not restricted.
**8. Compliance with book building guidelines for raising of funds through public issue.(5 marks) **
Chapter XI - of SEBI (Disclosure & Investor Protection), Guidelines, 2000.
• 75% book building process
• Offer to public through book building process
• Additional disclosures
• Underwriting
• Procedure for bidding
• Allocation/Allotment procedure
• Maintenance of books and records
• Guidelines on Initial Public Offers through the Stock Exchanges On-line System (e-IPO)
o Agreement with the stock exchange
o Appointment of brokers
o Appointment of registrar to the issue
o Listing
o Responsibility of lead manager
o Mode of operation
**9. Knowledge of SEBI guidelines related with raising funds through debt instruments.(10 marks) **
Chapter X - of SEBI (Disclosure & Investor Protection), Guidelines, 2000.
• Requirement of credit rating
• Requirement in respect of debenture trustee
• Creation of debenture redemption reserves
• Distribution of dividends
• Redemption
• (Disclosure) and Creation of charge
• Requirement of letter of option
• (Roll over of Non Convertible Portions of Partly Convertible Debentures (PCDs) / Non Convertible Debentures (NCDs), by company not being in default.
• (Roll over of Non Convertible Portions of Partly Convertible Debentures (PCDs) / Non Convertible Debentures (NCDs), by company being in default.
• In case of conversion of instruments (PCDs/FCDs, etc.) into equity capital
• Other requirements
• Additional disclosure in respect of debentures
Chapter XII - of SEBI (Disclosure & Investor Protection), Guidelines, 2000.
• Promoters Contribution
• Reservation for employees
• Pricing of issues
• Specific disclosures
• Issue of debentures including bonds
• Rollover of debentures / bonds
• Protection of interest of debentures / bond holders
• New financial instruments
• Bond issues by DFIs
• Other requirements
• Utilisation of money before allotment
**10. Compliance with SEBI (DIP) Guidelines for raising of funds through public and rights issues.(10 marks) **
Chapter I to IX - of SEBI (Disclosure & Investor Protection), Guidelines, 2000.
• Eligibility norms for companies issuing securities
• Pricing by companies issuing securities
• Promoters contribution and lock in requirements
• Pre-issue obligations
• Contents of offer document
• Post-issue obligations
• Other issue requirements
• Guidelines on advertisements
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
14. Information Security Auditors Module (Part-1)
Topics
1. Regulatory, Legal and Compliance issues in Information Security for Financial Markets
A) Basic provisions of (20 Marks)
a) Securities Contracts (Regulation) Act
b) Securities and Exchange Board of India Act, 1992
c) Depositories Act, 1996
d) Rules and Regulations of SEBI
e) Rules, Regulations and Byelaws of NSEIL
f) Rules, Regulations and Byelaws of NSCCL
B) Basic provisions of (25 marks)
a) IT ACT
b) Indian Copyright Act
c) SEBI Act and its regulations pertaining to Information Security
d) RBI regulations for Information Security
2. Business Continuity Planning (25 Marks) **
a) Understanding Business Impact Analysis
b) Various terms associated with business impact analysis
c) Types of Continuity Plans
d) Testing of Continuity Plans
3. Access Control (30 Marks) **
a) Methodologies of Access Control
b) Mandatory Access Control
c) Discretionary Access Control
d) Usage of logical and physical access controls and their importance
e) Functionality of popular access control devices
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
**15. Information Security Auditors Module (Part-2) **
Topics
4. Application Security (15 Marks) **
a) Security in Databases
b) Basic concepts of security in Client Server Architecture
c) Basic concepts of Web applications Security
5. Communications and Operations Management (15 Marks)
a) Data Centre Administration
b) Concepts of Security in Network Architecture
c) Basics of communication protocols used for Information Security
6. Physical and Environmental Security (30 Marks)
a) Controls for Physical Security
b) Administrative Controls
c) Physical and Technical Controls
d) Threats and facility requirements
e) Tokens and Biometric devices
f) Microcomputer Physical Security
7. Security Management Practices (40 Marks) **
a) Standards, guidelines and procedures
b) Principles of risk management
c) Quantitative and
d) Qualitative techniques
e) Basic Concepts of ISO 27001
Start Date: ** March 29th,2008
Duration: ** 2 Days or [sat and sun 8am to 12pm]
Fees: ** Rs. 3000 (Inclusive of Study mtl, Question bank & Case studies, Mock Tests etc.)
About the NCFM Exam: ** (Visit: http://www.nseindia.com/content/ncfm/ncfm_testdetails.htm )
Forthcoming Exam dates: **
Last Date to apply: **
Exam fees: Rs: 1000 to be paid to NCFM
**Exam Center: ** Hyderabad, Pune, Bangalore,Mumbai and other metros
Ideal For
• The training is specifically designed for those appearing (or re-appearing) for the various NCFM Certifications.
• While many people appear for the NCFM certifications for professional reasons, many also gain the certifications BEFORE getting into the profession. This gives a professional advantage to NFCM Certified individuals. In addition, some do the course purely for knowledge reasons as this makes them better investors & traders.
• Students who are doing MBA,BBA, Bcom, M com, CA, Bsc, Msc, Engineer, Computers, or any graduate or Under graduate student can also comfortably do these Modules.
• Gates are open for any Student, Businessman, Professional and Employee of Every Field, Industry & Subject to make a Career in Financial Industry.
Sessions Content
1. Each course will cover the NCFM syllabus in DETAIL for that module. (Participants who have already registered with NCFM and received the Reading Material from NCFM are requested to bring their materials to the course).
2. Concepts & Terminologies will be explained from scratch.
3. A mock NFCM test will be conducted and evaluated. Topics of importance will be highlighted. Question types and answering techniques will be illustrated.
Sessions Format
• Semi-formal setting to facilitate understanding of the topics (rather than memorizing it)
• Discussion based and interactive. Participants are encouraged to ask as many questions as the like.
• Practical participation based teaching methodology and real tools like IPO forms, demat slip, share certificate, online trading terminal ,real trading room learning
• Emphasis on More Interactive and Personalized Training.
• These courses can be opted by those employed in ANY SECTOR, INDUSTRY or STUDENTS of ANY SUBJECT.
• Focus on Personality Development of Aspirants & Guiding them how to tackle the Day to Day Pressures
**What can you expect? **
1. A sound understanding of the Concepts covered in each module. This will go beyond just the learning required to do the NCFM exam well. It will allow you to have a more holistic and deeper understanding of the markets.
2. Appreciate the value of this knowledge and how it'll make a difference to your career and/or investing.
3. All you questions to be answered to your satisfaction.
4. After the training, to fly through the NCFM exam comfortably without stress.
** Venue: **
Flat no 417, Annapurna block, aditya enclave, ameerpet, Hyderabad, Andhra Pradesh, India -500016
