Manegement of financial markets and services in India/ Babu,G.Ramesh

UNIT 1: Indian Financial System
n Crisis in The Economy
• Finance Ratio
• Financial Interrelation Ratio
• New Issue Ratio
• Intermediation Ratio
n Monetary Policy
n Growth
n Inflation
n Monetary Aggregates
• Policy Stance
n Other Development and Regular Policies
n Setting Up New Banks
n Savings and Investments
n Interest Rates
n Savings in Personal Finance
n Savings and Inflation
n Objectives of Investor
n Investment and Speculation
n Definition of Investment
n Speculation
n Savings Pattern in India
n Savings Rate in India
n Household Savings Rate
n An Overview of Indian Financial System
• First Phase (Prior to 1950)
• Second Phase: 1950-1991
• Third Phase (1991 to —)
Banking Sector in India
Early History
From the First World War to Independence
Post-Independence
Nationalisation
Liberalisation
Financial Sector Reforms in India
Financial Regulation in USA
• Commission Members
• Overview
• History
The Commodity Futures Trading Commission (CFTC)
The Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Controller of Currency
National Credit Union Administration
Office of the Thrift Supervision (OTS)
Financial Services Authorities UK (FSA)
Autorite Des Marches Financiers (AFM France)
Monetary Authority of Singapore
Swiss Financial Market Supervisory Authority, Switzerland
Consor, Italy
China Securities Regulatory Commission, China
China Insurance Regulatory Commission, China
China Banking Regulatory Commission, China
CVM, Brazil
IDA, Canada
OSF, Canada
Foreign Direct Investments in India
• New Ventures
• Existing Companies
Agriculture Sector In India
Interlinking of Rivers
Contract Farming
Special Economic Zone (SEZ)
Financial Institutions in India
• Commercial Banks
Direct Subscription
Merchant Banking
• Development Banks
• Industrial Development Bank of India (IDBI)
Industrial Credit and Investment Corporation of India (ICICI)
• Financial Resources
• Share Capital
• Reserves
• Borrowings
• Public Deposits
n Business Operations
• Lending Operations
n Capital Market Operations
n Technology Development and Information Company of India (TDCI)
n Merger of ICICI with ICICI Bank
n Industrial Finance Corporation of India (IFCI)
• Financial Resources
• Share Premium Account
• Business Activities
n The Importance of financial institutions
n Specialized Financial Institutions
n Investment Institutions
n Questions
UNIT 2: FINANCIAL MARKETS IN INDIA
n Introduction
n A Money Market
• Definition of Money Market °
n Characteristics of Money Market
n The Need for a Money Market
• The Goals of Money Market Investor
n Capital Market
• Definitions
n Nature and Constituents
n The Growth of the Capital Market
n Components of the Capital Market
n Public Issue
n Rights Issue
n Objects of Section 81
n Exceptions to the Rule (Section 81)
n Announcement of Right Offer
n Mailing of Forms
n Conversion Ratio
n Conversion Value
n The Effects of Rights on Shareholders
n Advantages of Right Issue
n Disadvantages
n Recent Developments in the Market
• Origination
• Underwriting
• Distribution
Mechanics of Floating New Issues
• Public Issue
• Offer for Sale
• Private Placement
Features
Public Issue Process
I. Pre-Issue Activities
II. Post-Issue Activities
Secondary Market
Definitions
Functions of Stock Exchange
Classification of Securities Listed in Stock Exchange
• Group-A Securities
• Group-B Shares
• Permitted Shares
• Cleared Securities
• Non-cleared Securities
Derivatives Trading
• Definition of Derivatives
• Functions of Derivatives
• Major Players of Derivatives
Derivative Risks
Advantages of Derivatives Markets
Components of Derivatives
Futures
• Definition
• Characteristics of Futures
• Objectives of Future Contracts
• Tj^pes of Futures Contract
- Ready Delivery Contract
- Forward Contract
• Kinds of Futures
- Commodity Futures
MCX Fact Sheet
Financial Futures
• Interest Rate Futures
• Currency Futures
• Stock Index Futures
Options
• Characteristics of Options
• Kinds of Options
Swap
Warrants
• Convertible Debentures
• Objectives of Convertible Debentures
• Features
Credit Derivatives
Swaptions
The Bombay Stock Exchange
The Growth of Bombay Stock Exchange
Boh
Listing
• Minimum Listing Requirements for New Companies
• Minimum Listing Requirements for Companies Already Listed on
Other Stock Exchanges
• Minimum Requirements for Companies Delisted by BSE Seeking
Relisting on BSE
• Permission to Use the Name of BSE in an Issuer Company's
Prospectus
• Submission of Letter of Application
• Allotment of Securities
Trading Permission
• Requirement of 1 per cent Security
• Payment of Listing Fee
• Compliance with the Listing Agreement
• Cash Management Services (CMS)
Trading
• Timing
• Groups
Listed Securities
Permitted Securities
Tick Size
Computation of Closing Price of Scrips
Basket Trading System
Settlements
• Compulsory Rolling Settlement
• Day Activity
Demat Pay-hi
Auto Delivery Facility
• Pay-in of Securities in Physical Form
• Funds Pay-in
• Securities Pay-out
• Funds Pay-out
• Penalty Norms
• Shortages
• Auctions
• Self-Auction
• Close-out
• Rectification of Bad Deliveries
• Patawat (Settlement) Objections
Company Objections
• Bulk Deals Disclosures in the Cash Segment
• Block Deals Disclosures in the Cash Segment
• Total Liquid Assets
• Base Minimum Capital (BMC)
• Additional Capital
• Liquidity Categorization of Securities
• Monthly Review
• Categorization of Newly-listed Securities
• Calculation of Mean Impact Cost
• Dissemination of Information
• Margins
• Collection of VaR Margin
• Special Margin
• Mark-to-Market Margin (MTM)
• Collection and Release of Margins
• VaR Margin
• Extreme Loss Margin (ELM)
• Mark-to-Market Margin (MTM) °
• Special Margins
• Release of Margins
• Exemption from Payment of Margins
• Early Pay-in Facility
• Capital Cushion Requirements
Monitoring Business of Brokers
• BOLT Deactivation
• Brokers', Contingency Fund
• Trade Guarantee Fund
• Trade Guarantee Fund —GSEC Segment
Investors' Grievances
Investors' grievance against listed company
Visit of Registrar and Transfer Agent to BSE
Investors' Grievances Against BSE's Trading Members
Bombay Stock Exchange Limited Rules, Bye-Laws and Regulation, 1957,
Preliminary
Rules Title
Constitution and Objects
• Constitution
• Objects
• Buildings
• Acquisition of Property
• Safe Deposit Vaults
• Borrowing of Monies
• Payments and Disbursements
• Subscriptions
• Clearing House
Licenses and Privileges
• Information and Publications
• Membership of other Bodies
• Rules of the Derivatives Segment of Bombay Stock Exchange
Limited (30th April, 2009)
• Incidental Powers
Rules of the Derivatives Segment of the Stock Exchange, Mumbai,
Preliminary
• Rules and Bye-laws made under SCRA
• Title
• Commencement
• Scope
• Jurisdiction
Rules
Chapter I - Definitions
Checklist for Submitting Documents for Sub-broker Registration by
Individual/Partnership/Corporate Applicant
BSE
• Top 10 Sundry Debtors
• Top 10 Customers in the preceding 3 Financial Years
• Top 10 Sundry Creditors
• Investments made by the Company
• Status of Income Tax of Company, its Promoters and all Directors,
for the Preceding 5 Assessment Years (and of such Past Years
where Assessment has not been Completed)
• Defaults with Stock Exchanges/Regulators
• Defaults in Payment of Interest/Principal
• Compliances at Stock Exchanges
• Disciplinary Actions/Litigation/Defaults (include the following,
whether in India or Abroad)
Shareholding Disclosure Forms: Guidelines for Filling the Shareholding
Disclosure Forms
Shareholding Pattern Summary
Broad Summary of Holdings
• Total Domestic Holding
BSE's Certification for Derivatives Exchange (BCDE) Examination
• Model Test Paper for BCDE
Bombay Stock Exchange Limited
Chief General Manager Market Regulation Department
• Ab^ut Public Issues
• Book Bi/ilding
• The' Projcess
• Guidelines for Book Building
• BSE's Book Building Systenm
• Benefits of Listing
• Reverse Book Building—Glossary
Guidelines for Listing
• Minimum Listing Requirements for New Companies
• Minimum Listing Requirements for Companies already Listed on
Other Stock Exchanges
• Minimum Requirements for Companies Delisted by BSE Seeking
Relisting on BSE
• Permission to Use the Name of BSE in an Issuer Company's
Prospectus
• Submission of Letter of Application
• Allotment of Securities
• Trading Permission
• Requirement of 1 per cent Security
• Payment of Listing Fees o
Schedule of Listing Fees for the Year 2010-11
Applicability
• Payment Date
• ' Service Tax
• Compliance with the Listing'Agreement
• Cash Management Services (CMS)-Collection of Listing Fees
SENSEX—The Barometer of Indian Capital Markets
Key Statistics (Jan 2010-Apr 2010, May 2010-Aug 2010)
Key Statistics (Jan 2010-Apr 2010, May 2010-Aug 2010)
Key Statistics (Jan 2010-Apr 2010, May 2010-Aug 2010)
Guide for Investors
Introduction
Department of Investor Services
Safeguards for Investors
• Selecting a Broker/Sub-Broker
• Entering into an Agreement
• Transacting
• Settlement
Rights of Investors
f Jurisdiction of Courts
General DO's and DON'Ts for Investors
• DO's
• DON'Ts
Brokerage and '^^amp Duty
Investor Awareness and Education
Reverse Book Building—Historical Information
• Reserve Position
Dealings on the Exchange
• Business Days
• Exception
• Alteration or Cancellation of Exchange Holidays
• Closure of Market
• Altering Time of Trading Session
• Over-the-counter Business
• Trading Sessions outside Prescribed Hours and Street Trading
Forbidden
• Who May be Admitted
• Who May Not be Admitted
• Regulation
• Visitors
• Admission to the Floor of the Exchange
• Admission during Good Behaviour
• Management on the Floor of the Exchange
• Unit of Trading
• Odd Lots
• Variations in Bids and Offers
• Quotations
• Marking When Expunged
• Daily Official List
• Dealing in Securities
• Governing Board may Prohibit Dealings
• Government Securities
• Securities (other than Government Securities)
• Dealings in Provisional Documents
National Stock Exchange
• Mission
• Promoters
• Structure
• Capital Market Segment
• Clearing and Settlement
• Derivatives (F&O) Segment
• Currency Derivatives Segment
Wholesale Debt Segment
National Stock Exchange of India Limited
National Stock Exchange Of India Limited
Bye-Laws
Arrangement of Chapters
• Definitions
Chapter I
Trading Segments
Chapter II
Executive Committee
Indices
• Index Funds
• Index Futures
• Index Options
Mutual Fund
• Mutual Fund Services Systems
• Ordered Placing
• Confirmation of Order
• Eligibility Criteria for Members
• Eligibility of Criteria
- Individuals (Sole Proprietor)
- Partnership Firms
- Corporations, Companies or Instihitions
- Professional Clearing
- Banks
- Other Applicable Eligibility Criteria
- Who Cannot Become a Member?
Admission of a New Member in NSE °
Recent Developments
National Stock Exchange and London Stock Exchange
Group Sign Letter of Intent
National Securities Clearing Corporation Ltd.
• Partners
Securities and Exchange Board of India
• Objectives of the SEBI
• Delegation of Powers
• Powers to Make Rules
• Powers of Making Regulations
• Organisation of the SEBI
Licensing Authority
Primary Markets
Secondary Market
Factors to be Considered for Investment in Primary Market
SEBI Guidelines
Reforms in the Primary Market
The Gazette of India Extraordinary
The Gazette of India Extraordinary
The Gazette of India Extraordinary
Securities and Exchange Board of India
• Definitions
• Transactions in Shares
• Members not to Hear or Decide in Certain Cases
• Availing Services of Intermediaries
• Acceptance of Gifts
• Procedure for Managing the Conflict
• Maintenance of Disclosures /
n The Gazette of India Extraordinary
n The Gazette of India Extraordinary
n The Gazette of India Extraordinary
n The Gazette of India Extraordinary
n The Gazette of India Extraordinary
n The Gazette of India Extraordinary
• Objective
• Background
• Proposals
n The Gazette of India Extraordinary
n The Gazette of India Extraordinaiy
n The Gazette of India Extraordinary
• Proposed SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2009
• Background "
• Approach
• Proposals
n Securities and Exchange Board of India
n Consultative Paper
• Background
• Proposal
• Fees and Charges
• Public Comments
n Questions
UNIT 3: Financial Services
n The Objectives of the Financial Services
n Factoring and Forfeiting
• Factoring
• Forfeiting
• Bills Discounting
• Advantages
n Insurance
• Life Insurance Corporation of India (LIC)
• General Insurance Corporation
n Unit Trust of India
• Management
• Tax Benefits
Hire Purchase
• Hire Purchase Agreement
• Regulation Frameworks
• Provision of Contract Act
• Sale of Goods Act
Consumer Finance
Commercial Paper
• Features of the Commercial Papers
• Issue Procedure
• Indian Context
Credit Rating
• Introduction
• Types of Credit Rating
• Limitations of Ratings
• Scope of Credit Rating
• Objectives of the Credit Rating
• Credit Rating Process
• Credit Rating Agencies in India
• CRISIL
• Investment Information and Credit Rating Agency of India (ICRA)
• Credit Analysis and Research Ltd. (CARE)
• Long-Term and Medium-Term Instruments
• Short-Term Instruments
• Credit Analysis Rating
• Summary
Credit Cards
• Process of Credit Card Business Cycle
• Benefits of Credit Card
• Privileges/Additional Facilities
• Types of Credit Cards
• Credit Cards in India
• Modem Trends in the Payment Business
• ATM
Housing Finance
© Institutional Framework
© Objectives and Business
• Housing Finance Scheme
• Regulation of Deposits by NHB
• Share Capital
• Refinancing
• NHB Guidelines
• Taxation of HFCs
• HDFC Schemes
• Lie Housing Schemes
• GIC Housing Finance
• CAN Financial Homes Ltd.
• SBI Home Finance
• Commercial Bank Scheme
• Housing and Urban Development Corporation
• State Housing Finance Societies
Mutual Funds
• Registration of the Trust Deed
• Rights and Obligations of Trustees
Leasing
• Legal and Tax aspects of Leasing
• Income Tax
• Tax Aspects for Lessor
• Tax Considerations for Lessee
• Lease Rentals
Questions