Advanced Program on Derivatives

Day - 1

Futures Basics: Futures Product Specifications, Open Interest, Mark-to-Market

Margining
Option Basics: Concept, Time Decay; Strike prices Basic Put-Call strategies
Strategy: Futures: Stock and Index Futures, Basket - Pair Trading, Basis Trading
Synthetics: Synthetic Call and Put strategies, Synthetic Futures Strategies
Strategy: Spread Strategies; Exotic Strategies; Covered Call Strategies

Day - 2

Pricing: Futures Pricing: Cost of Carry, Expectation Hypothesis, Fair Value Pricing,
Option Pricing: How to leverage it for derivatives trading, Put-Call Parity, American and
European Options Pricing, Dividend and non-Dividend Paying Stocks
Arbitrage and Hedging: Futures - Futures and Cash - Futures; Options Arbitrage
Hedging: Types of Risk: Basis Risk, Systematic and Unsystematic Risk Utilities of a Hedge
for Mutual Funds Cross Hedging; Protective Put, Fencing Strategies, Portfolio Hedging
Strategies, Tailing the Hedge - Case - Live Portfolio
Strategy - Greeks: Delta Neutral strategies, Delta - Gamma neutrality, Delta v/s Time;
Delta v/s Volatility; Gamma v/s Time and Volatility, Vega, Theta and Rho; Volatility Trading
Strategies.
Forecasting using Options and Futures: Put - Call Ratio; Volatility Forecasting Futures:
Forecasting Strategies: Open Interest - Volume and Price Patterns, Volatility Index

Day - 3

Live trading session

Accounting for financial instrument & derivatives

Day 1

Financial Instruments, Financial Assets and Financial Liabilities

Cost , Amortized Cost, Fair value
Definition of Derivatives, Accounting for Derivatives
Designation at Fair Value by Management
Hedge accounting, Types of Hedges
Rationale of each type of hedge, Hedge Effectiveness, Concept, Framework,
Risk Management Policy

Day 2
Case Study 1: Accounting for an FX future contract entered by an Indian export firm

Case Study 2: Accounting for a currency future contract by an import firm and accounting
in special cases, popular in Indian conditions like
Utilization of a forward contract
Early delivery of a forward contract
Roll-over of a forward contract

Case Study 3: Accounting for NIFTY future contract entered by an institutional investor

Case Study 4: Accounting for an interest rate future contract entered by a Primary Dealer

Review of the new AS-30 regulations

Definition of Hedge Items and Hedging Instruments and designation rules

Hedge Accounting categories Undesignated, Cash flow, Fair value and Net Investment
Hedge
Concept of a hypothetical derivative
Hedge effectiveness tests Critical terms, Dollar Offset, Regression, Variance Reduction
Hedge relation termination events
Case studies related to a Currency forward previously handled under the new standard
Future challenges and opportunities under the new standard

Case Study 5: An exporter hedging his foreign currency exposure using a plain vanilla
option; here we look at the concept of intrinsic and time value accounting, how to perform
effectiveness testing & corresponding accounting entries

Case Study 6: A foreign currency borrowing hedged using an interest rate swap for
offsetting the interest rate risk
Application Supported by Blocked Amounts

SECTION I Overview of the ASBA process

Idea behind introduction of the ASBA

The regulators point of view
The experience so far Phase I
Phase II implementation timeline, challenges and next steps

SECTION II IPOs post ASBA

Investment bankers experiences with ASBA

Benefits to various stakeholders issuers, registrars, merchant bankers
Impact on post issue timelines medium to long term
Key challenges and possible solutions case study of NHPC
Regulatory will and amendments required prior to and to operationalise Phase II and
thereafter

SECTION III Processes relating to ASBA

Life post introduction of Phase I of ASBA- roles and responsibilities of various parties-
Registar and banks
Process changes required for phase II
Key differences between the existing non ASBA and ASBA formats
Experiences and next steps

Part I Overview of ASBA

What and how of ASBA Ideal roadmap to ASBA

Introduction to Phase II of ASBA
Benefits of ASBA to all participants, including the bank
How should it be popularized
What steps is SEBI taking to popularize ASBA

Part II : Implementation of ASBA phase I & II

Experiences of the banks in Phase I

Expectations from all participants merchant banks, registrars, SEBI/ SE etc
Readying for Phase II - things to be done technology, process, manpower, etc

Part III (Registrar)

Instructions detailing the requirements from the banks

 Discussing the material changes for Phase II Vis a Vis Phase I

Part IV ASBA process (Investment Banker)

Experiences so far
The process roadmap
Expectations from the banks in the Public/ Rights issue process

Part V Demo on ASBA

Part VI Stock Exchanges

Next steps
Summing up
Data Analytics in Financial Markets

Part - I Introduction to Data Science

What is Data Science

Evolution of Data Science
Various Data Science related profiles and applications
Machine Learning and AI in HFT
Part II Machine Learning using R
Section - A
R - Programming Basics

Data Manipulation and Wrangling

Writing Functions
Graphics
Statistics using R
Descriptive Statistics
Inferential Statistics
Linear Regression
Statistical Plots
Section - B
Machine Learning
1. Supervised Learning - Key Methods and Techniques

Multiple Linear Regression & Polynomial Regression

Shrinkage Method for model improvements
Variable Reduction Techniques - PCA / PCR
R-Squared
Case Study - Using R

Logistics Regression
Shrinkage Method for model improvements
Variable Reduction Techniques - PCA / PCR
Model Accuracy - Precession vs Recall and Confusion Matrix
Case Study - Using R

Tree Based Methods

Pruning of Tree
Measuring r^2 in tree based methods
Gradient Boosting, Bagging and Ensemble Methods
Model Accuracy - Precession vs Recall and Confusion Matrix
Case Study - Classification - Using R
 Case Study - Regression - Using R

Nave Bias Algorithm

Case Study - Using R
Section - C
Time Series Modelling
Time Series Decomposition
Holt Winters smoothing
ARIMA Models
Case Study - using R
Part III Data Visualization
Data Visualization Using Tableau
Importing Data into Tableau
Creating Graphs
Creating Sets and Performing Custom Calculations in Tableau
Using R in Tableau
Creating Dashboard
Publish a Tableau Dashboard on web
Case Studies - 1
Case Studies 2
Basic Course on Stock Markets

Secondary Markets, Trading Clearing and Settlement, Rolling Settlement, BOLT, Mutual
Funds, Demat & Depositories of Shares, Sensex and Other Indices, Futures and Options,
Primary Markets, Fundamental Analysis, Technical Analysis.

Basic Program on Technical Analysis

Technical analysis. What is technical analysis? Why technical analysis? Comparison with
fundamental analysis, Integration of technical and fundamental analysis, Basics of technical
analysis, Construction of charts, bar/ line, Arithmetic/logarithmic, Price, Value, Time,
Trend-line, Channel, Fan line, Support Resistance, Retracements. Reversal and
Continuation Pattern, Moving Averages, Momentum Oscillators, Japanese Candle Sticks
Credit Derivatives

First Session
1. Credit Derivatives Overview

Whats credit risk

Whats a credit derivative
The Need for Credit Derivatives
Market Description: Participants
Market Description: Geography
Present Constraints and the Future

2. Credit Default Swaps

Introduction to CDS
CDS Mechanics
CDS identification: specifications to be provided
The economics of a CDS
Differences from Asset Swaps Points Upfront CDS

3. Valuation of Credit Default Swaps

Overview of challenges facing valuation of credit derivatives

Valuation of CDS
Modeling Default Probabilities
Conceptualizing CDS MTM
Risky Cash Flows
Determining Recovery Rates
Risky duration approach to MTM
An Example of Unwinding Credit Default Swaps
A Note on MTM Differences Between Bonds and Default Swaps

Second Session
1. Indices & Basket Products

Linear Basket
Market towards greater standardization: CDS Indices
Mechanics of the indices
Theoretical value calculation
Comparing the CDS index to cash bonds
Notes versus swaps
First-To-Default Basket (FTDB)
Basket Pricing
Sensitivity of Basket trades
 Basket Swap Strategies

2. CDO

Equity Tranche
Mezzanine Tranche
Ratings of CDOs
Correlation Trading

Third Session
1. CDS Structural Roadmap
Basic Mechanics under ISDA Definitions
Physical Settlement of CDS
Asian &opean Market Practice
Reference Entity
Credit Events
Protection Period
Reference Obligation
Deliverable Obligations

Fourth Session
1. Hedge Accounting

2. Overview of Documentation & Regulatory Issues in Credit Derivatives

Banking Book
Trading Book
Basel II and Credit Derivatives
Bank capital & Credit Derivatives
Equity Portfolio Structuring & Stock Analysis

Module 1: Overview of the Economy

India on the Move Global Financial Crisis Reading the Union Budget Eleventh Five
Year Plan Oil Interest, Inflation and Exchange Rate Savings, Investment &
Consumption Infrastructure Boost Politics of Economy

Module 2: Market Dynamics

Sensex Valuation FII Impact Liquidity, Sentiment, Momentum, Value Decoupling
Theory Corporate Earnings Global Cues Liberalization, Privatization and
Globalization Leveraging the India Story Derivative Play India Vision 2025

Module 3: Valuation
Time Value of Money Interpretation of Financial Statements for Stock Analysis Relative
Valuation Absolute Valuation Contemporary Valuation Price V/s Value

Module 4: Portfolio Allocation & Construction

Direct Equity v/s Mutual Funds: Interesting Angles Clients Risk Profiling Investor
Mistakes Improper Framing, Anchoring, Herding etc Investment Approaches Investor
Gurus Warren Buffett & Peter Lynch Logical Thinking Game Plays Return &
RiskPortfolio Allocation Portfolio Construction Portfolio Measurement Hedging

Module 5: Adding Value to Client Relationships

Integrity Tests Awareness of Contemporary & Controversial Issues Insider Trading
Street Smartness Quiz Managing Sensitive Accounts Evaluating Financial Products v/s
Peer Offers Suitable Stock Selection & Portfolio Churning Boosting & Balancing both
Employer & Client Interests

ETFS and Indexing Fundamental

Why ETFs are a big hit worldwide
Introduction to indexing, what is indexing, what do Nobel laureates and Investment
gurus think about indexing, How is indexing faring in India Vs active fund management
through a break through report The myth of eternal alfa
Exact definition of ETFs, origin, worldwide growth, working mechanism, how to buy and
sell
Differences between ETFs and open ended index funds
ETFs in India including gold ETFs and their benefits
How ETFs can be used
Investor psychology special : How to get rid of destructive investment behavior and
adapt empowering behavior to better achieve financial
Finance and Accounts for Non Finance Executives
What is Finance? What is accounting? What are Financial Statements? Balance Sheet, P &
L Account, Cash Flow, How to read Financial Statements? Understanding financial strengths
and weaknesses, Financial Ratio Analysis, Liquidity versus Profitability, Overtrading, under
capitalization

Working Capital Management - Cash, Receivables, Inventories, Loans and Advances,

Suppliers Management

Business as an economic entity - difference between firm, partnership and company

(both public and private companies). Memorandum and Articles of Association. Concept of
trading and manufacturing - value creation.

Extensive discussions on common shares, preference shares, debentures, hybrid

instruments like convertibles, warrants, money market instruments like CPs, bank
financing, factoring, forfeiting, bill discounting etc. Comparative analysis of various sources
of funds - competitive advantages and disadvantages. Discussion on authorized capital,
subscribed capital, issued capital, paid up capital etc.

Understanding corporate actions like bonus, split, consolidation, right, dividend,

buyback etc.-the underlying rationale for each and their impact on the balance sheet and
the share price of the company, Concept of gearing / leveraging, Cost of capital,
(Investment avenues for individuals and companies), Fundamentals of sound investing,
Valuations of the business entity - market value, liquidation value and book value.
Intangibles like- brands, human resources, patents and their valuations.

Risks, Introduction to Financial Markets (Capital Markets and Money Markets),

Distinctive advantages and disadvantages, Major players, Their roles in the market
Products, How to raise funds through the Primary Market (capital and money market),
How the secondary markets operate both money and capital markets.
Financial Planning & Wealth Management - How to make your money work hard for
you?

Financial Planning

A common mans concern

Financial Planning Process
Why Financial Planning?
Best Practices

Components of Financial Planning?

1. Insurance Planning

What is insurance?
Why Life Insurance is must?
Origin and types of Insurance
Special discussion on ULIPs and Term Plans
10 Commandments of Life Insurance
Health Insurance

2. Investment Planning

10 Basic Tenets of Investments Planning

Comparison of all Possible Asset classes & allocation
Return comparison over a period of time from different asset classes and investment
options (Gold, bonds, Equity, FD, Insurance etc)
30 yrs Return of Sensex
Mutual Funds as Investment Vehicle
Special focus on SIP, STP, and SWP
NFOs Good or Bad?
How you should be beware of mis-selling in these products

3. Retirement Planning

Why Retirement Planning?

Understanding financial goals and needs

4. Tax Planning

Taxation impact on different investment options such as equity, Mutual Funds, ETFs,
Gold, Debt etc
Relevant sections and provisions in law
Discussion on Section 80C
 Direct Tax Code (DTC)

5. Estate Planning

What is Estate? Who needs Estate Planning?

Transferring assets during life time
Transferring assets post death e.g nominations, will etc
Creating Trusts

6. Discussion & Preparation of Comprehensive Financial Plan

Financial Statment Analysis
Understanding Financial Statements
a. Profit and Loss Statement
b. Balance Sheet
c. Funds Flow Statement
Understanding inconsistency in financials and their adjustments
Impact of corporate actions on financials
Interpretation & application of different ratios
Case studies

Financial Statment Analysis - Banking Sector

Structure of Banking Balance Sheet and P & L Account
The Banking sector financial statements are completely different from other regular
manufacturing or trading companies. Banks can and do borrow much more than the equity
and are allowed by both RBI and Basel norms to do so. Capital adequacy is an important
issue. These areas will be covered in some detail.

Price to Book, Price to Adjusted Book Concepts, Price to Earnings

Pricing of banking sector shares is well correlated with the underlying book value per
share after adjustment for NPAs not provided and has little correlation with earnings. This
session will seek to understand why that is so and why between banks, these ratios may
tend to differ quite significantly.

Profitability Ratios - NIM, Provisioning - Gross and Net

Profitability in banking sector is related to the interest that the bank is able to charge its
borrowers vis-a-vis the interest that it pays out on its deposits. The variety of loans granted
and deposits enjoyed leads to variation in interest margins. The factors that drive this
margin are of great interest to analysts who track this sector.

Risk Related Parameters - Value at Risk, Sensitivity

Risk management is important in banking as the entire balance sheet revolves around
probability of non-payment by borrowers. What risk measures banks typically adopt and
what is disclosed in banking annual reports is the focus of this session.

Case study
Foreign Exchange Risk Management
Session 1

1. Overview of Foreign Exchange Markets

Cash & Spot Exchange

Eurocurrency Markets
Market Players, Inter bank ,Corporates
Mechanism of making a foreign payment
Forex and Interest Rate markets
2. FEMA Regulations

Session 3
1. Trading in Foreign Exchange Markets

Trading Procedure
Management of International Trade Transaction
Information Analysis for Trading
Speculation
International Transactions Financing
Concept of Volatility in Forex Markets

Session 4
1. Forecasting Exchange Rates
Various theories of forecasting
Drawbacks associated with these theories
Technical Analysis
Real-time example

Session 5
1. Foreign Exchange Risks

Types of Risks & exposures for corporates, exports, imports, borrowing, competitions
Measurement and quantifying of Risks

2. Value at Risk (VaR)

Introduction to VaR
Application of VaR in Forex Markets

Session 6

Forward/Futures/Swaps/FRA
Options
 Types of Options like range notes, spreads, knock-ins/outs/digital/barrier,
leveraged etc.
Risk Return and Hedging Profile
Product Structuring
Actual illustration

Session 7
1. Hedging in Forex Market

Hedging through Forward/Futures/Options/Swaps

Pricing of Options/Swaps/Forwards
Factors affecting pricing
Understanding trade logic by forecasting factors affecting pricing

Session 8
1. Case Study

Where Corporate Treasuries have failed using FX derivatives

Practical structures used by Indian and International corporates
ing sense out of theories and various structures)

Participants attending the entire course shall be eligible to receive Participation

Certificate from the BSE Institute Ltd.
Fundamentals Analysis
Fundamental Analysis: Introduction
Fundamental Analysis: What Is It?
Fundamental Analysis: Qualitative Factors - The Company
Business Model
Competitive Advantage
Management (1. Conference Calls, 2. Management Discussion and Analysis (MD
& A), 3. Ownership and Insider Sales, 4. Past Performance)
Corporate Governance
Fundamental Analysis: Qualitative Factors - The Industry
Customers
Market Share
Industry Growth
Competition
Regulation
Fundamental Analysis: Introduction to Financial Statements
Fundamental Analysis: Other Important Sections Found in Financial Filings
Fundamental Analysis: The Income Statement
Fundamental Analysis: The Balance Sheet
Fundamental Analysis: The Cash Flow Statement
Fundamental Analysis: An Introduction to Valuation
Ratio Valuation
Fundamental Analysis: Conclusion
Overview of Asian Capital Markets

The program will cover the following aspects in detail

Overview of Asian Capital Markets

Asian Financial Markets Historical Perspective
Asian Bond Market
Cash and Derivative Instrument Coverage
Liquidity Constraints
Use of Derivatives and role of Hedge Funds

Participants attending the entire course shall be eligible to receive Participation

Certificate from the BSE Training Institute
Portfolio Management Techniques

Day 1

We begin the course with an introduction to the fundamentals of todays portfolio

management Modern Portfolio Theory (MPT). We will explore concepts such as efficient
frontier, risk/return trade-offs, the asset allocation process and conclude the day with a
look at investor characteristics and new developments in behavioral finance.

Principles of modern portfolio management (1 session)

Introduction and objectives

Overview of course
What is Portfolio Management?
Statistical and theoretical approaches to investment management

Commonly used statistical measures

Diversification and the creation of efficient frontier using Markovitz mean variance
model
Risk vs. return trade-off
Other applications of Modern Portfolio Theory (MPT)
Essential asset pricing models

Case study Portfolio management decisions

Participants will be given a historical portfolio of common stock, debt securities and other
assets and will be asked to calculate related portfolio statistics: expected returns, standard
deviation of returns, covariance, correlation coefficients and beta of the assets. Participants
will then use this information to construct an efficient portfolio.

The asset allocation strategies; Strategic asset allocation using investors risk
tolerance, characteristics and qualities(2 sessions)

Steps in the portfolio management process

Analyzing risk and return objectives
Influence of political and economic factors in determining optimal asset mix
Types of asset allocation: Fixed, flexible, strategic and tactical asset allocation
Overcoming greed-fear cycle for rational investment decisions
Strategic vs. tactical AA
Investor psyche: overcoming greed-fear hurdle to optimize investors returns.
Measuring investors risk tolerance to decide asset allocation
The cases for and against international diversification
Case study: Strategic asset allocation

Participants will be given a background information for a variety of different investors and
asked to design appropriate portfolio mixes.

Exploiting market anomalies and understanding behavioral finance for prudent

portfolio management (1 Session)

The active vs. passive management debate

Growing importance of Behavioral Finance- Behavioral biases and their implication on
portfolio returns.
Comparing momentum vs contrarian investment strategy using behavioral finance
framework
Forecasting alpha using the Treynor-Black model for security selection

Exercise The importance of behavioral finance topics

Participants will examine how a series of behavioral investment biases affect optimal
investment decisions as defined by MPT. Biases to be evaluated include:
Frame dependence
Overconfidence
Representativeness
Loss aversion

Day 2
Equity portfolio management is often a critical component of overall investment success
since equity securities often represent a significant portion of many investment portfolios.
After a review of equity vital equity valuation techniques, we will discuss the role of
equities in an investment portfolio, the major approaches employed to manage equities and
conclude with a look at strategies used to manage international and emerging market
equity portfolios.

Equity portfolio management

Asset pricing models revisited and equity valuation

General principles (1 session)

Using the Capital Asset Pricing Model (CAPM)

Weighted Average Cost of Capital (WACC)
Fundamental equity valuation
Multiples analysis
Exercise Using asset pricing models
Participants will answer a series of questions related to applications of CAPM and equity
valuation techniques

Equity portfolio management-Active strategies (2 sessions)

Underlying drivers for use of equity

Issuer/investor perspectives
Selecting optimum portfolio using Sharpes single index model
Equity style management
Security selection approaches: top-down or bottom up
Establishing relevant benchmarks
Long-short vs. long-only strategies
Equitising market-neutral portfolios
Alpha / Beta separation
Applications of portable alpha

Exercise Evaluating equity funds

We will review several equity portfolios, discussing relative weightings, sector allocation
and other important attributes affecting performance

Equity indexing-Passive strategy (1 session)

Weighting schemes of major indices

Equity index futures and their role
Index mutual funds
Exchange-traded funds
Strategies and benchmarking approaches

International equity portfolio management

Constructing international equity benchmarks

Classification issues: Developed, emerging of frontier?
To hedge or not to hedge FX risk
Effect of home bias and information advantage

Case study Emerging markets portfolio construction Participants will first examine some
of the major issues confronting emerging market portfolio construction, including high
correlations during crisis, cost of capital computation difficulties, and non-normal return
distributions.Then, groups will prepare a presentation to investors demonstrating the
advantages of an emerging market portfolio.

Day 3
Measuring and evaluating Managed portfolios performance and exploiting
alternative investment strategies for superior portfolio performance
Performance measurement, evaluation and attribution (2 sessions)

Computing sub-period returns and arithmetic average rates of return

Time- and dollar-weighted rates of return
Evaluating portfolio performance using risk adjusted measures.
1. Sharpe ratio
2. Treynor ratio
3. Jenson s alpha
4. Famas net selectivity
5. Timing and style based measures
Overview of GIPS Global Investment Performance Standards
Benchmark portfolios and return attribution analysis

Case study: Portfolio performance evaluation and attribution

Case on raking various managed portfolios based on risk adjusted performance and
attribution analysis of superior performance

Alternative investment management & strategies (2 sessions)

The alternative investments universe

Different investments and their investor characteristics

Common features of alternative investments
Special issues for investment managers and advisers

Principal classes of alternative investments including:

Hedge funds
Private equity
Commodities
Real estate
Distressed securities

Alternative Investment strategies to create portfolios with superior returns

Hedge funds strategies

Key drivers of hedge fund returns
130/30 Funds
Portable alpha strategies
The risk of hedge funds
Alpha and beta separation
Identifying suitable hedge funds
Core-Satellite programs
 Use of derivative strategies

Exercise: alternative investment analysis

Participants will evaluate different alternative investments and select suitable investors to
match various portfolios.

Portfolio Risk Analysis

Session 1
What is Risk, Types of Risk

Session 2
Risk and Risk Premiums
How to calculate a Risk Premium
Holding Period Return
Real Risk and Nominal Risk
Portfolio Risk Introduction.
Session 3
Risk and Risk Premiums
Portfolio Risk Calculation
Asset Allocation
Session 4
Bond Mathematics
Inverse Relation
Interest Rate Sensitivity
Duration
Portfolio Average Maturity
Case Study

All About Of Taxation

Income Tax

To understand and have knowledge of relevant terminologies.

To have access to relevant documents.
To ascertain Value Added Tax liability.
To prepare tax challan.
To pay IT liability.
To file and maintain records.
Perform General/administrative tasks.
Service Tax compliance

To understand and have knowledge of relevant terminologies.

To have access to relevant documents.
To ascertain Service Tax liability.
 To prepare tax challan.
To pay Service Tax liability.
To perform the accounting entry.
To file and maintain records.
Perform General/administrative tasks.
TDS compliance

To understand and have knowledge of relevant terminologies.

To have access to relevant documents.
To ascertain the amount of TDS payable.
To prepare tax challan.
To pay TDS.
To perform the accounting entry.
To file and maintain records.
Perform General/administrative tasks.
VAT compliance

To understand and have knowledge of relevant terminologies.

To have access to relevant documents.
To ascertain Value Added Tax liability
To prepare tax challan.
To pay VAT liability.
To perform the accounting entry.
To file and maintain records.
Perform General/administrative tasks.

Takeover Code

Introduction to takeovers
Regulatory framework governing takeover of companies in India and abroad
Case study
Pitch book
How to read A Mutual Fund Fact Sheet

Session I
Mutual Fund Concept, Structure, Role of AMC, Regulators etc., Advantages and
Disadvantages, Types of Mutual Fund Debt, Equity, Hybrid, Asset Allocation, Gold.

Session II
Understanding Debt Market Types of Debt Market Money Market, Corporate Bond
Market, Government Securities Market, Concept of Credit rating, YTM, Modified Duration,
Average Maturity, Expense Ratio etc. How the data is represented in Factsheet. Various
Types of Debt Fund Liquid Fund, Short Term Debt Fund, Long Term Debt Fund, Credit
Fund, FMP

Session III
Types of Equity Fund Large cap, Midcap, Multi cap, Sector, ELSS. Performance
comparison, Types of Hybrid Fund MIP, Balance Fund, Asset Allocation Fund etc., Style
Box, Style of Management Active, passive, Bottom Up, Top down, Value , growth etc.

Session IV
Ratio used in Mutual Fund Sharpe Ratio, Standard Deviation, Treynor Ratio, Beta,
Tracking Error etc. Direct and Regular Plans, Fees in Mutual Fund, Taxation of Mutual Fund,
Platforms for transaction in Mutual Fund.
Insider Trading and Takeover Code

Introduction
Overview of SEBI (Prohibition of Insider Trading) Regulations, 1992
Compliance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
2011
Case study
Questions and Answers

International Capital Markets

The program will cover the following aspects

Overview of International Capital Markets

Markets and players
Debt Market
Equity markets
Derivatives
Forex Market

International Financial Reporting Standarts (IFRS)

Introduction to IFRS, Concepts, Roadmap and Challenges

IAS 1 - Presentation of Financial Statements
IAS 18 - Revenue
IFRS 2 - Share based Payments
IAS 16- Property Plant and Equipment
Business Combinations (Mergers), Consolidations, Associates, and Joint Ventures
IAS 12 (Current taxes and deferred taxes)
IAS 32, 39 - Financial instruments
I GAAP vs IFRS

Introduction to Indian Debt Markets

Money Markets and Debt Markets in India
Instruments and Market Players
Regulatory Framework
Government Securities Market,
Primary & Secondary Markets
Analysis of Macro Economic Indicators of Debt Markets
Bond Mathematics
Yield Curve Analysis
Trading Strategies in Debt Markets.

IPOs: Procedures & Processes

Overview of alternative sources of Equity raising for Indian Corporates
IPOs through Book Building Process

Book Building Procedure

Appointment of Managers/ Advisers/ Underwriters/ Brokers/ Registrars/ Advertising &
Publicity Agencies
Opening & Closing Dates of Subscription List
Prospectus and its Registration

Requirements & Contents of the Prospectus

Abridged Prospectus
Vetting Procedure
Requirement and Contents of Application Form
Distribution Procedure
Instruction to the Collecting Branches of Bankers to the Issue
Application & Allotment of Shares

Basis of Allotment
Procedure in case of Over-subscription
Procedure in case of Under-subscription
Essential requirements for Listing
Procedure relating to listing of shares in the stock exchanges and follow up action
Role of Investment Bankers in managing the issue and recent developments in this
regard

Important Guidelines / Directions issued by SEBI for IPO's.

Cost of Public Issue

Limited Liability Partnership

Introduction to What is LLP?, Need for LLP, Who can form a LLP, Overview of the LLP Bill,
Extent & Nature of LLP, Partners and their relations, Extent & Limitation of Liability of LLP
& Partner, Financial Disclosures, Transfer of Partnership Rights, Conversion of LLP,
Winding Up & Dissolution, Comparison between Partnership and LLP and Company,
Comparison between LLP Bill in India and LLP Act in UK, Lacunas in the LLP Bill

Macroeconomic Indicators and its Impact on Capital Markets

Understanding GDP composition

Why is it important? How to read GDP data?

Expenditure side analysis
Income side analysis of GDP
The world view in GDP terms
Forms of GDP
Real Vs Nominal
Purchasing Power Parity
Important macroeconomic players

RBI Function & objectives

Central Government role in economy
Understanding economic cycles monetary and fiscal stimuli
Understanding money supply, inflation and investments
Gauging investment and consumption climate

Public & private investments

Foreign investments FII & FDI
Consumption trends
Key commodity linkages
Cracking the IIP
Public Finances Why they are important

The problem of fiscal deficits

Indias situation as a case study
Trade deficits and Fiscal deficits
Public debt traps
Fiscal Deficit & Interest rates
Macroeconomic Indicators and sectors for investors

Managing Investment for Wealth Creation

Investment environment and dynamics of investments

Understanding equity investments: P/E ratio, Indexing, myth of timing the market etc.
Understanding equity investments: P/E ratio, Indexing, myth of timing the market etc
Understanding science of investment to overcome Fear-Greed trap
Comparing investment alternatives based on Return, Risk, Maturity, Liquidity and Tax
treatment
Understanding process of individual risk profiling and strategic asset allocation
Creating wealth beyond market cycles using Rupee cost averaging (SIP) & Value
Averaging (STP)
Importance of goal based financial planning using insurance, ULIPs, mutual funds, ETFs,
Real Estate, Gold and alternative investments
Case Study on a comprehensive cash flow based financial planning for wealth creation

Market Crashes - Catalyst to Evolution of Stock Markets

Why understanding history is important?

"As a protection against financial illusion or insanity, memory is far better than law.
When the memory of the 1929 disaster failed, law and regulation no longer sufficed. For
protecting people from the cupidity of others and their own, history is highly utilitarian. It
sustains memory and memory serves the same purpose as the SEC, and, on the record, is
far more effective. John Kenneth Galbraith

When Jeremy Grantham was asked, Do you think we will learn anything from this
turmoil? He responded, We will learn an enormous amount in the very short term, quite a
bit in the medium term and absolutely nothing in the long term. That would be the
historical precedent.

Analysis of various recessions / downturns

Episodes studied (These six have been chosen for the differences in them):
The great depression (1929-1939)
1. Economic terminology: Definitions of certain economic terms like recession,
depression, market crash, downturn, etc.
2. Economic cycles
The securities scam in India (1992)
1. The flaws in the banking system that were exploited
2. Risk of physical certificates
3. Transparency in the security markets evolution over the years
The Asian contagion and the fall of Long Term Capital Management (1998)
1. Capital flows and the contagion effect introduction to decoupling
2. Understanding role of leverage
3. (Il)liquidity and its impact
4. Black swan a six-sigma event
Dot-com bust (2000-2001)
1. Valuation of stocks
2. Mania
3. The Indian angle the difference between Indian technology companies and the
Dot Com companies
Subprime crisis (2007-2009)
1. Risk of risk measurement
2. Problem with lack of transparency
3. Understanding derivative products difference between OTC and exchange
traded derivatives
4. Decoupling revisited
5. The Indian angle why India came unscathed
The observations

The common themes

1. In spite of the differences between various episodes, there has been a common
thread a common pattern
Drawing parallels between various episodes
1. This section compares parallels between various episodes
Anatomy of a crash
How does the whole market crash happen?
Is it possible to identify a crash in advance?
Lessons from financial market crisis

What can we learn out of the history?

Investor behaviour in times of crisis: Some behavioural finance concepts and the
common mistakes made by investors
Advisor behaviour: The mistakes that the advisors make at times especially at turning
points
Structural and regulatory controls
How to safeguard one's portfolio

Participants attending the entire course shall be eligible to receive Participation

Certificate from the BSE Institute Ltd.

Mergers & Acquistions

Broad overview of Financial Restructuring

Changing shape of the corporates

Developments in the competitive environment
Core competency-driven restructuring
Circumstances in which financial restructuring takes place
Factors governing the M&A processes in India
Types of Restructuring- When are these strategies most appropriate ?

Assets Restructuring- Spin-off, Split-off, Split-up, De-merger, Divestment, Merger,

Takeover, Joint Venture, Alliances
Liability side Restructuring- LBO, MBO, EBO, Leveraged Capitalization, Equity Reduction,
Shares Buyback
Legal Issues

Companies Act, 2013

Sick Industrial Companies Act, 2013
FEMA
Listing Agreement
SCRA

Takeover Code
Tax Provisions
Mergers & Acquisitions- Strategic Perspectives

SWOT Analysis of the company

Identification of the Target Company
Due Diligence Inquiry
Selection of methods for merger or takeover
 Financing the acquisition
Valuation and Pricing of a company

Modes of Valuation
Earnings basis
Asset basis
Discounted Cash Flows (DCF)
Return on Investments (ROI)
Return on Equity (ROE)
Procedures and Processes in an M&A

Step-by-step approach
Negotiating the acquisition agreement
Finalising the deal, etc.
Analysis of M&A Transactions - Case Study

Experiences in an M&A deal

Participants attending the entire course shall be eligible to receive Participation
Certificate from the BSE Institute Ltd.

Fundamentals of Mutual Fund

Day 1 - Basic Modules

Session 1
1. Evolution and Regulatory Framework Governing the Mutual Funds Industry

a. The Concept and Role of Mutual Funds

1. International Scenario
2. History of Mutual Funds in India
3. Types of Mutual Fund Products
b. Fund Structures, Organisation and Constituents
1. Sponsor, Trustee and AMC
2. Organisational Design and Legal Structure
3. Other Constituents - Fund Mergers and Scheme Takeovers
c. Legal and Regulatory Environment
1. Role of Regulatory Agencies for the Fund and its Constituents
2. Compliances & Trusteeship Issues
3. Role of SRO
4. Investor's Rights and Obligations
Session 2
1. Investing in Mutual Funds

1. Investing in Mutual Funds: Understanding the Process, Investment Objective.

2. Prospectus / Offer Document and Key Information Memorandum,
3. Processes, Rights and Obligations for Investors
Session 3
1. Portfolio Management using Comparative Analysis

a. Capital Markets and Investment & Portfolio Management

1. Equity Markets and Mutual Funds
2. Debt Markets and Mutual Funds
3. Derivatives Markets and Mutual Funds
4. Investment Policy
5. Restrictions on Investments
Session 4
1. NAV, Pricing, Valuation, Accounting & Taxation

1. NAV Concepts and Pricing

2. Accounting
3. Valuation Norms for Securities
4. Reporting and Disclosure Norms
5. Taxation
Day 2 - Intermediate Module

For Investors, Financial Intermediaries and Employees of Mutual Funds

Session 1
1. Measuring and Evaluating Mutual Fund Performance
1. Risk and Performance Evaluation
2. Measuring Returns
3. Tracking Mutual Funds Performance
2. Role of an Intermediary as a "Financial Planner"
3. Helping Investors with Financial Planning using Mutual Funds
1. Concept of Financial Planning for the Investors
2. Need for Financial Planning
3. Basis of Financial Planning.
4. Life Cycle and Wealth Cycle stages
5. Investment Products
6. Financial Planning Strategies for Investors
Session 2
1. SIP (Systematic Investment Plan) & Developing Model Portfolio using Product Mix

1. Financial Planning Strategies & Tools

2. Asset Allocation- The Strategic Tool and Model Portfolio
3. Recommending Financial Planning Strategies for Investors
4. Comparison of Investments from available products
5. Selecting the Right Investment Products for Investors
6. Fund Selection from available products
Session 3
1. Risk Management Associated with the Mutual Funds Industry
 1. Helping Investors Understand Risks in Fund Investing
2. Investment Philosophy
a. Value Investment
b. Growth Investment
3. Recommending the Model Portfolio and Selecting the Right Funds
4. Strategies & "How to make Mutual Funds work for you"
Session 4
1. Marketing, Distribution, Sales & Investor Services related to Mutual Funds

1. Design of Mutual Fund Products

2. Who can invest in Mutual Funds in India?
3. Investor Services - Application, Redemption, Investment Plans & Services
4. Marketing of Mutual Funds Products
5. Fund Distribution Channels
6. Sales Practices.
2. AMFI Code of Conduct - Ethics and Best Practices

Participants attending the entire course shall be eligible to receive Participation

Certificate from the BSE Institute Ltd.

Surveillance, Risk Management and Securities Settlement

Introduction to Risk Management

The risk management framework

Overview of different types of risk
Current trends in Capital Markets

Credit Risk Management

Defining credit risk

Counterparty risk
Default risk
Settlement risk
How collateral management can help reduce risk
Describing the credit rating process

Market Risk Management

Defining market risk

Identifying risk sensitivity
Liquidity
Volatility
Managing Risk using VAR method
Stress Testing
Operational Risk Management

Defining Operational Risk

Assessing various ways to monitor ad control operational risk
How to integrate market risk with operational risk

Risk Measurement Tools

Historical Simulation
Variance from mean
VAR

Identifying Areas to Effectively Implement Manage and Control Risk

Integration of online monitoring with offline monitoring

Case Study of major market movements
Capital adequacy norms

Clearing an Settlement Procedures

Settlement cycles
Margins and Margining Management
Collateral Management
Risk Management through use of Trading Platforms

Inspection

KYC Norms
Risk Management profile of clients
Process Audit

The Art of Reading an Annual Report

Elements of subjectivity

Inferences on management quality

Management Discussion & Analysis Different strokes
Directors reports structure and key observations
Understanding the nature of key accounting policies
Auditors report
How to gauge management quality? The key pointers.

Guiding structure

The laws that regulate Annual report structure

Process of consolidation some fundamentals
 Understanding the corporate structure
Why are corporate structures important?

Financial evaluations

Capital Employed
Capital intensity
Margin profiles
Volume profiles
Industry leverage
RoCE and RoE decomposition

Case Study

Evaluation of an annual report. A Classroom exercise.

Participants attending the entire course shall be eligible to receive Participation

Certificate from the BSE Institute Ltd.

Understanding Listing Agreement in India

Listing of Securities

What is listing;
Who can list;
What securities can be listed;
Process.

Legal Regime

SEBI;
Securities Contracts (Regulation) Act, 1956;
Securities Contracts (Regulation) Rules, 1957;
SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997;
SEBI (Prohibition of Insider Trading) Regulations, 1992;
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Listing Agreement-

Genesis and history of Listing Agreement;

Applicability and relevance;
Contract between Stock Exchange and listed companies.

Important Clauses of the Listing Agreement

Notifications / Intimations:
 1. Advance notifications for certain corporate actions;
2. Notification after certain corporate actions (e.g. outcome of Board Meetings
dividend declaration, declaration of bonus, buy back of securities, change of
business etc.);
3. Corporate actions requiring both intimation to stock exchanges and notification
in newspapers;
4. Best practices guidance of timing and mode of intimation illustration by way
of examples addressing common concerns for both the Stock Exchange and
corporate.
Corporate Governance Clause 49:
1. Adequacy of Indian Corporate Governance; and
2. Best practices.
Filings - Listing Agreement, Takeover Code and PIT Regulations - illustration by way of
examples addressing common concerns for both the Stock Exchange and corporate

Recent Developments to the Listing Agreement Impact

Understanding Structured Investment Products

Session 1:
Role Play exercise with Structured Investment Products with one live case. The objective is
to share the perspectives of the traders, sales team, investors, regulators, product
managers etc. through a role play.

Session 2:
Building blocks of Structured Investment Products; Derivatives Recapitulation of basics
of derivatives (forward, futures and options, exotic options like KI, KO etc.)

Sessions 3 and 4:
Pricing and View based strategies for Structuring Investment Products (forward, futures
and options pricing and trading strategies). This would lay the foundation for
manufacturing these products.

Session 5:
Case Study with some Structured Investment Products: The objective is to apply the
understanding and decompose some of the existing products into their pieces.

Valuation & Modeling for Banking Sector

(An Exclusive Computer Based Interactive Training Program)

Banking Industry basics

Understanding the Banking system

Monetary system and banks
Regulatory framework and accounting
 Provisioning a different angle
A play on infrastructure or consumption?

Industry Structure

Cost structure
Competitive dynamics
Banking sector worldwide
The public Vs private bank debate
Porters five force analysis across industry
1. Supply Chain
2. Customer bargaining power
3. Competitive intensity
4. Entry barriers
5. Threat of substitutes

Business Characteristics

Capital adequacy
Asset quality
Management quality
Earnings quality
Leverage and profitability
Valuation approach selection

Valuation Exercise
HDFC Bank Ltd
1. Annual report study
2. Financial Modeling
3. Valuation
PNB Ltd
1. Annual report study
2. Financial Modeling
3. Valuation
A study of corporate structures across the sector

Valuation of Shares

Day 1

Session 1
Introduction to Valuation and its relevance, Important concepts required in valuation, cost
of equity, beta, market premium, risk free rate, and forward rates, each element to be
actually computed by participants.
Session 2
A case study on projections with hands on study on computers

Session 3
Dividend Approaches to Valuation Cost based methods, Comparative Methods, Cash Flow
discounting methods. Computing cost based methods. Computing cost based method for
case study company.

Session 4
Case Study extension to cash flow discounting method continued including sensitivity
analysis and expected value.

Day 2
Session 1
Cash flow discounting method continued including sensitivity analysis and expected value.

Session 2
Comparative Valuation methods - PE, EV to EBITDA and other multiples to be computed by
participants of case study company.

Session 3
Putting it all together and determining clusters from where to extract value.

Session 4
Some issues in M and A valuation, Final questions and wrap up.

Value Investing

Thought process of value investors

Price Value differentiation philosophy
Importance of understanding value
Sources of Value qualitative aspects and quantitative parameters
Hurdles to value discovery in the markets
Approaches to valuation selection criteria
Valuation philosophy, simple approach & Methodology
Value investing in todays markets
Value Investing Case studies

Venture Capital & Private Equity Finance

Introduction/Overview to Venture Capital

Types of Venture Capital
Role of Venture Capitalist
Types of businesses/industries preferred by Venture Capital
Summary of and main business proposal
 Due Diligence Procedures
Process of Financing
Types of Funding
Valuation Approaches
Legal Framework and Exit Routes for Venture Capital
Case Study
Start-up ventures, Medium-sized listed companies, Investment Bankers, Bankers,
Entrepreneurs and other market intermediaries.

Wealth Management: A Practical Approach

1. Importance of wealth management

After a creation of wealth, it is far more important to protect the wealth and by managing
the wealth in planned manner more wealth can be created from the wealth itself.

2. Risk Management & Protection of wealth

To understand risk areas and process of eliminating or reducing the risk, since there are
various types of risks associated with all financial products.

3. Retirement Planning and way to creation of wealth for retirement

To understand the importance of most important financial goal of an individual, which is

retirement? This module further helps to know the various ways to plan for golden years.

4. Asset Allocation & Building your Financial Home

To have knowledge of different financial products and their characteristics. Depending on

the risk profile and age, asset allocation should be done in different asset classes

5. Tax Planning

This module will gives an overview of various tax provision and tax benefits associated
with various financial products.

6. Risk Profiler & Overview of Financial Products

To understand individual risk taking capacity and categorize investment risk into
conservative, moderate and aggressive. This module will give broad overview of various
financial products under different asset class.

7. Estate Planning

To understand the importance of succession planning through different types of will or

trust and knowing important and relevant provisions of succession act.
Note:
The entire approach & methodology will be very practical in nature with case studies done
on the spot without any Pre-Scripting

Working Capital Management

Introduction to Working Capital

Operating Cycle, Production Cycle, Distribution Cycle, Pipeline Inventories, Factors

Determining Working Capital Requirements, Importance of Optimum Working Capital,
Working Capital Policy and Management, Profitability v/s Liquidity.

Types of Working Capital

Permanent-Temporary, Financing Working Capital, Working Capital Monitoring and

Control.

Working Capital Estimation

Estimation Procedure, Working Capital Based on Operating Cycle, Different Components of

Working Capital, Estimation of Working Capital Requirements.

Management of Cash and Marketable Securities

Cash Management, Factors Affecting Cash Needs, Cash Budget, Control Aspects, Managing
The Float, Investment of Surplus Cash.

Receivables Management

Costs And Benefits of Receivables, Credit Policy, Credit Evaluation, Credit Control,
Factoring and Receivables Management, Forfeiting, Evaluation of Credit Policies.

Inventory Management

Types of Inventories, Cost of Maintaining Inventory, Techniques of Inventory Management,

Risks in Inventory Management.
Financing Of Working Capital

Types Of Spontaneous Sources, Trade Credit, Commercial Paper, Annualized Cost Of

Financing, Types Of Bank Credit, Other Sources of Short Term Financing, Regulation of
Bank Credit In India.