Financial Markets Training Course

The Global Capital Markets

• Definition of a 'financial market'
• Historical development of today’s global financial markets for government and private sector operations
• The role of the financial media in shaping public perception and market dynamics
• Structure of major capital markets:
  • Exchanges, Clearers, and Regulators
  • The modern surge in global investment
  • Different types of stock exchanges
  • The role of stock exchanges in today’s financial landscape
  • Overview of U.S., European, Middle Eastern, and Asian stock exchanges for government and international investors

Financial Markets Regulation:

• Capital Adequacy Requirements
• Basel I: Initial framework for banking regulation
• Basel II: Enhanced risk management and supervision
• Basel III and its implications for global financial stability
• Sources for new product development in regulated markets

The Different Asset Classes and Their Markets

• Instruments traded on stock exchanges today
• Equities: Common and Preferred shares
• Bonds: Corporate and Government
• Bond types: Fixed, Floating, Zero Coupon, and the Yield Curve
• Money market instruments for government and institutional investors
• Currency markets and their impact on international trade
• Investment motivations and divestment triggers
• Income and Capital Gain considerations
• Interrelationships between various asset classes
• How exchange-traded and over-the-counter (OTC) markets interrelate for government and private sector investors

Short Term Money Market

• Certificates of Deposit (CDs)
• Treasury Bills (T-Bills)
• Commercial Paper
• Trade paper and Bankers' Acceptances (BAs)
• Market norms and practices for government and institutional investors
• Key market participants in the short-term money market

The Different Types of Stock Exchange Investors

• Retail and institutional investors
• Fund managers and their roles in asset allocation
• Hedge funds: Strategies and risks
• Stock exchange participants, including investment banks, stockbrokers, hedge funds, and prime brokers
• Intra-market relationships between the buy and sell sides of the industry for government and private sector operations

The Role of the Stock Exchange

• Where financial products are traded in the global market
• The importance of the OTC market for government and institutional investors
• Historical development of stock exchanges
• Main stock exchanges in today’s markets, including U.S., European, and Asian venues
• Differing architectures of major stock exchanges around the world
• Asset classes traded on different stock exchanges globally for government and private sector investors
• Primary and secondary markets: New York, Euronext, London, Shanghai, Hong Kong
• The appeal of listed companies to investors for government and institutional purposes
• Using stock exchanges to pool liquidity and raise capital for government and corporate entities
• Methods of capital raising, including initial public offerings (IPOs) and other flotation methods

Clearing & Settlement

• Settlement processes and associated risks
• Different settlement conventions in major markets for government and institutional transactions
• Equities, bonds, and derivatives: Clearing and settlement procedures
• The process of derivatives clearing and the role of the Central Counterparty (CCP)
• CCP services provided to stock exchanges for government and private sector operations
• Margin requirements and their implications
• The security trade settlement process, from pre-settlement to finalization
• Potential issues in the settlement process, including unmatched trades, delays, and bad deliveries
• Stock exchange settlement discipline for government and institutional compliance
• The lifecycle of a trade: From execution to settlement for government and private sector investors
• 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 role of custodians in stock markets for government and institutional investors
• Settlement and safekeeping services
• Income collection and corporate actions management
• Cash management and funding transactions for government and private sector operations
• Additional services provided by custodians, including accounting, stock lending, collateral management, trustee services, and valuation reports

Alternative Investments

• Definition and scope of alternative investments for government and institutional investors
• Structured products: Risks and returns
• Hedge funds: Risk management and control mechanisms
• Venture capital: Valuation challenges, risk assessment, and control measures
• Private equity and angel finance: Investment strategies and considerations for government and private sector investors
• The use of derivatives in asset management for government and institutional portfolios
• OTC vs. exchange-traded derivatives (ETD)
• Types of derivatives used in asset management, including futures and options
• Risk management and control practices for derivatives, including documentation, valuation, and reporting issues

The Management of Quoted Equity Investment

• Risks associated with acquiring and holding securities for government and institutional portfolios
• Risks related to corporate actions and their impact on equity investments
• Pricing considerations for quoted equity investments for government and private sector investors
• Major sources of risk in equity markets, including market volatility and geopolitical events
• General controls within equity investment management for government and institutional compliance
• Risks associated with international equity markets for government and global investors

The Management of Quoted Fixed Income Investment

• Risks involved in acquiring and disposing of fixed income securities for government and private sector portfolios
• Use of credit ratings and associated risk factors for government and institutional investors
• Risks related to the pricing of fixed income securities for government and private sector operations
• Risk management and control practices in corporate fixed income processing for government and institutional compliance
• Risks associated with government securities, including sovereign risks
• Sovereign risk ratings and their implications for government and private sector investors
• Valuation of government securities for government and institutional portfolios
• Risk management and control practices in sovereign bond processing for government and private sector operations

The Market and Credit Risks of Investing in Global Markets

• Market risks, including volatility and liquidity concerns for government and private sector investors
• Value at Risk (VaR) calculations and their application in risk management for government and institutional portfolios
• Market risk modeling techniques for government and private sector operations
• Credit risks, including default and counterparty risks for government and institutional investors
• Methods for measuring credit risks in global markets for government and private sector operations
• Risks associated with global financial markets for government and international investors
• Money market risks and their impact on short-term investments for government and institutional portfolios
• OTC risks and the challenges they pose for government and private sector investors
• Exchange risks, including currency fluctuations and regulatory changes for government and global investors