FINANCIAL SERVICESAND CAPITAL MARKETS

PREPARATION GUIDELINES, MAPPING SHEET

AND SEBI GUIDELINES

WHAT TO CARRY IN THE FSCM EXAM ?

1 Mapping sheet2 ICAI Study Mat3 SEBI guidelines on 5 areas (https://resource.cdn.icai.org/48430bos32482.pdf)4 May 2018 Paper and Solution5 November 2018 Paper and Solution6 Case Study 1,2 & 3 from ICAI BOS7 MTP8 Class Notes9 SSEI Study Mat

HOW TO PREPARE ?Step 1: Class NotesStep 2: Solve all Case studies

1

CHAPTER 1 : GLOBAL FINANCIAL MARKETS

TOPIC/HEADINGPAGENO.

1. INTRODUCTION TO GLOBAL FINANCIAL MARKETS 1.11.1. International Capital Market 1.1

NASDAQ 1.1New York Stock Exchange (NYSE Euronext) 1.2London Stock Exchange 1.2Singapore Stock Exchange 1.3Luxembourg Stock Exchange 1.3Hongkong Stock Exchange 1.3

1.2. International Commodity Market 1.4Chicago Mercantile Exchange (CME) 1.4Chicago Board of Trade (CBOT) 1.4New York Mercantile Exchange (NYMEX) 1.4London Metal Exchange (LME) 1.4Intercontinental Exchange Inc. (ICE): 1.4

2. ROLE OF FINANCIAL MARKET IN ECONOMICDEVELOPMENT OF A COUNTRY

1.4

i. Capital Market 1.5Global Scenario in Capital Market 1.5

ii. Money Market 1.6a. Banks’ liquidity management 1.6b. Monetary policy 1.6Global Scenario in Money Market 1.6

iii. Foreign Exchange Market 1.7Global Scenario in Foreign Exchange Market 1.7Recent trends 1.8

iv. Derivative market 1.8Global Scenario in Derivatives Market 1.8

3. STAKEHOLDERS IN FINANCIAL MARKET (DOMESTICAND GLOBAL)

1.8

i. Primary stakeholders in financial market 1.8ii. Service providers in financial market 1.8

2

iii. Regulators in financial market 1.9iv. Administrators to facilitate the financial market 1.9

(i) Primary stakeholders in financial market 1.9a. Shareholders 1.9b. Lenders 1.9c. Corporates 1.9d. Mutual fund Organizations 1.10

(ii) Service providers in financial market 1.10a. Merchant Bankers 1.10b. Brokers 1.10c. Underwriters 1.11d. Depositories 1.11e. Custodians 1.11

(iii) Regulators in financial market 1.12a. Securities and Exchange Board of India (SEBI) 1.12

Outside India 1.12b. Reserve Bank of India 1.12

Outside India 1.12c. Insurance Regulatory and Development Authority of

India (IRDAI)1.12

Outside India 1.13d. Pension Fund Regulatory and Development Authority

(PFRDA)1.13

Outside India 1.13(iv) Administrative authorities to facilitate the financial

market1.13

a. Association of Mutual funds of India (AMFI) 1.13b. Foreign Exchange Dealers Association of India (FEDAI) 1.14c. Fixed Income Money Market and Derivative

Association of India (FIMMDA)1.14

d. Association of Investment Bankers of India (AIBI) 1.144. INDIAN FINANCIAL MARKET SCENARIO 1.15

4.1. Introduction to Financial Market 1.154.2. Functions of Financial Markets: 1.16

3

CHAPTER 2 : IMPACT OF VARIOUS POLICIES OF FINANCIALMARKETS

TOPIC/HEADINGPAGENO.

1. CREDIT POLICY OF THE RESERVE BANK OF INDIA(RBI)

2.1

1.1. Meaning of Credit Policy 2.11.2. Objectives of Credit Policy 2.1

(i) Maintenance of Price Stability 2.1(ii) Achieving Economic Growth 2.2(iii) Exchange Rate Stability 2.2(iv) External Balance of payment equilibrium 2.2(v) Adequate flow of credit to productive sectors 2.2(vi) Maintaining a moderate structure of interest rates

to enhance investments2.2

1.3. Analytics of Credit Policy 2.2(i) Interest Rate Channel 2.3(ii) Exchange Rate Channel 2.3(iii) Quantum Channel (relating to money supply and

credit)2.3

(iv) Asset Price Channel 2.31.4. Operating Procedure and Instruments 2.31.5. The instruments of Credit Policy 2.4

(i) Cash Reserve Ratio (CRR) 2.4(ii) Statutory Liquidity Ratio (SLR) 2.4(iii) Liquidity Adjustment Facility (LAF) 2.4(iv) Margin Standing Facility (MSF) 2.5(v) Market Stabilization Scheme 2.5(vi) Open Market Operations 2.5

2. FED POLICY 2.52.1. About the Federal Reserve System 2.5

4

2.2. Fed Policy Tools 2.6(i) Open Market Operations 2.6(ii) The Discount Rate 2.6(iii) Reserve Requirements 2.7(iv) Interest on Required Reserve Balances and Excess

Balances2.7

(v) Overnight Reverse Repurchase Agreement Facility 2.7(vi) Term Deposit Facility 2.7

2.3. Fed Funds Rate and its impact on Global FinancialMarket

2.7

3. COST INFLATION INDEX (CII) 2.8Computation of Cost Inflation Index 2.8

4. CONSUMER PRICE INDEX (CPI) 2.94.1. Classification of Items 2.104.2. Issues relating to Consumer Price Index (CPI) 2.10

5. WHOLESALE PRICE INDEX (WPI) 2.11Difference between Wholesale Price Index (WPI) andConsumer Price Index (CPI)

2.11

5

CHAPTER 3 : CAPITAL MARKET - PRIMARY

TOPIC/HEADINGPAGENO.

1. BASICS OF CAPITAL MARKETS (NEED, EVOLUTIONAND CONSTITUENTS)

3.2

1.1. Indian Capital Market – Before 1990’s 3.21.2. Indian Capital Market – After 1990’s 3.31.3. Functions of the capital market 3.31.4. Major constituents of the capital market 3.3

2. SEGMENTS OF CAPITAL MARKET 3.42.1. Primary Market 3.42.2. Secondary Market 3.42.3. Primary Market vs. Secondary Market 3.42.4. The difference between primary market and secondary

market3.5

2.5. Similarities between Primary and Secondary Markets 3.52.6. Interrelationship between Primary Markets and

Secondary Markets3.5

2.7. Participants in the Capital Market 3.63. CAPITAL MARKET INSTRUMENTS 3.6

(i) Shares 3.6(ii) Preference Shares 3.7(iii) Debentures/ Bonds 3.8

Illustration 1 3.9(iv) American Depository Receipt (ADRs) 3.10(v) Global Depository Receipts (GDRs) 3.10(vi) Derivatives 3.11

4. ASPECTS OF PRIMARY MARKET (NEW ISSUE MARKET) 3.124.1. Different kinds of issue of securities 3.124.2. Types of Offer Documents 3.15

Key disclosure requirements of offer document 3.16

6

4.3. Issue Requirements 3.17(i) An unlisted issuer making a Public Issue (i.e. IPO)

is required to satisfy the following provisions:3.17

(ii) A listed issuer making a public issue (i.e. FPO) isrequired to satisfy the following requirements:

3.17

4.4. Mandatory provisions to be complied with beforemaking a public issue

3.18

(i) Minimum Promoter’s contribution and lock‐in 3.18(ii) IPO Grading 3.18

4.5. Pricing of an Issue 3.204.6. Intermediaries to the Capital Market 3.204.7. Steps involved in public issue 3.224.8. Public Issue of Shares - Book Building Route 3.244.9. Applications Supported by Blocked Amount (ASBA) 3.274.10. What is a Green Shoe Option? 3.28

Illustration 3.294.11. Anchor Investors 3.294.12. Private Placement of Shares 3.314.13. Disinvestment 3.334.14. Right Issue 3.334.15. Exit Offers (Delisting Offers and Strategic Issues) 3.34

7

CHAPTER 4 : CAPITAL MARKET - SECONDARY

TOPIC/HEADINGPAGENO.

1. INTRODUCTION TO SECONDARY MARKET 4.22. DEVELOPMENT OF THE STOCK MARKET IN INDIA 4.33. STOCK MARKET ORGANIZATION IN INDIA 4.44. DEMUTUALIZATION OF STOCK EXCHANGES 4.95. SHARE TRADING IN SECONDARY MARKET 4.106. STOCK MARKET AND ITS OPERATIONS 4.12

6.1. Growth of Stock Exchanges 4.126.2. Leading Stock Exchanges in India 4.126.3. Stock Exchanges Abroad 4.136.4. Characteristics of Stock Exchanges in India 4.146.5. Functions of Stock Exchanges 4.156.6. Basics of Stock Market Indices 4.16

7. RISK MANAGEMENT IN SECONDARY MARKET 4.17I. Trading Rules and Regulations 4.17II. Circuit Breakers to curb excess volatility 4.18III. Trading and Settlement 4.19IV. National Securities Clearing Corporation Limited 4.21V. Market Making System 4.21VI. Securities Lending and Borrowing (SLB) 4.22VII. Straight Through Processing (STP) 4.23VIII.Margin Trading 4.24

8. INDIAN DEBT MARKET 4.258.1. Indian debt market can mainly be classified into two

categories:4.25

8.2. Why do we need a Debt Market? 4.26

8

CHAPTER 5 : MONEY MARKET

TOPIC/HEADINGPAGENO.

1. BASICS OF MONEY MARKET 5.21.1. Discussion Points 5.31.2. Conceptual Framework 5.31.3. The Distinct Features of Money Market 5.41.4. Pre–Conditions for an Efficient Money Market 5.51.5. Rigidities in the Indian Money Market: 5.61.6. Distinction between Capital and Money Market 5.71.7. The Participants 5.8

2. MONEY MARKET PARTICIPANTS (INSTITUTIONS) 5.113. MONEY MARKET INSTRUMENTS 5.124. CASH RESERVE RATIO (CRR) AND STATUTORY

LIQUIDITY RATIO (SLR)5.26

(i) Cash Reserve Ratio (CRR) 5.26(ii) Statutory Liquidity Ratio (SLR) 5.26

5. DETERMINATION OF INTEREST RATES 5.27(i) Money Market – MIBOR (Thomson Reuters) 5.28(ii) What is 'LIBOR'? 5.29

6. MONEY MARKET - MONEY MARKET INSTRUMENTS:G SEC (GOVERNMENT SECURITIES)

5.29

7. RECENT DEVELOPMENT IN MONEY MARKET 5.31(i) Debt Securitisation: 5.31(ii) Money Market Mutual Funds (MMMFs): 5.32

8. REPURCHASE OPTIONS (REPO.), REVERSEREPURCHASE AGREEMENT (REVERSE REPO) ANDREADY FORWARD (RF) CONTRACTS:

5.32

8.1. Difference between Repo and Reverse Repo 5.338.2. Characteristics of Repo 5.338.3. Role of RBI 5.34

Illustration 5.35

9

CHAPTER 6 : INSTITUTIONS AND INTERMEDIARIES

TOPIC/HEADINGPAGENO.

1. DEPOSITORY 6.11.1. Benefits of a Depository System 6.21.2. The Process of Depository System 6.3

2. STOCK AND COMMODITY EXCHANGES – INDIAN ANDGLOBAL

6.4

2.1. Growth of Stock Exchanges 6.42.1.1. Leading Stock Exchanges in India 6.5

(a)Bombay Stock Exchange Limited 6.5(b)National Stock Exchange 6.5

2.1.2. Stock Exchanges Abroad 6.62.2. Characteristics of Stock Exchanges in India 6.72.3. Functions of Stock Exchanges 6.72.4. Indian Commodity Exchanges 6.92.5. International Commodity Exchanges 6.11

3. INTERMEDIARIES IN THE CAPITAL MARKET 6.11Merchant Bankers 6.12Registrars to an issue and Share Transfer Agents 6.12Underwriters 6.13Bankers to an issue 6.13Debenture Trustee 6.13Portfolio Managers 6.14Stock brokers and sub-broker 6.14

4. INSTITUTIONAL INVESTORS 6.15(i) Commercial Banks 6.15(ii) Insurance Companies 6.16(iii) Mutual Funds 6.16(iv) Pension Funds 6.17(v) Endowment Funds 6.17(vi) Hedge Funds 6.17

5. FOREIGN PORTFOLIO INVESTORS (FPIs) 6.18Who are FPIs? 6.18

10

Categorization of FPIs 6.18An interesting fact about FPIs 6.18Recent developments in FPIs 6.18

6. CUSTODIANS 6.197. CLEARING HOUSES 6.20

7.1. Role of Clearing Houses 6.207.2. Working of Clearing Houses 6.207.3. Trading Procedure of Clearing Houses 6.21

11

CHAPTER 7 : COMMODITY MARKET

TOPIC/HEADING PAGENO.

1. INTRODUCTION 7.12. ROLE OF COMMODITY MARKETS 7.2

2.1. Influence of commodity markets on prices 7.22.2. Negative Impact of Speculation 7.2

3. COMMODITY MARKET IN INDIA 7.33.1. Indian Commodity Markets 7.33.2. Problems with the Indian Commodity Markets 7.43.3. Way Forward 7.43.4. Regulatory scenario in India 7.4

4. APPLICATION OF DERIVATIVE IN COMMODITIES 7.44.1. Commodity Markets 7.44.2. Pre-requisites for Futures trading on a Commodity

Exchange7.5

4.3. Trading and Settlement Process 7.54.4. SEBI’s Approval for Option in Commodities 7.64.5. Critical Terms to be understood (A Revisit) 7.64.6. The Role of Derivatives 7.7

5. GLOBAL COMMODITIES EXCHANGES 7.75.1. London Metal Exchange (LME) 7.75.2. Eurex Exchange 7.85.3. Chicago Mercantile Exchange (CME) Group 7.8

TEST YOUR KNOWLEDGE 7.9

12

CHAPTER 8A : BANKING - MANAGEMENT

TOPIC/HEADINGPAGENO.

1. CAPITAL ADEQUACY INCLUDING RBI & BASEL NORMS 8A 11.1. Concept of Capital Adequacy 8A 11.2. Basel Norms 8A 3

1.2.1. Introduction 8A 31.2.2. Basel I: Capital adequacy against credit risk 8A 31.2.3. Basel II: Comprehensive framework with buffer for

larger spectrum of risks8A 4

1.2.4. Basel III norms 8A 51.2.4.1. Composition of Capital in the Capital

Adequacy Ratio (CAR) under Basel IIInorms

8A 6

1.2.4.2. Segregation of Regulatory Capital 8A 71.2.4.3. Limits of Segregated Regulatory Capital 8A 71.2.4.4. Conclusion 8A 7

2. ASSET RECONSTRUCTION 8A 83. ASSET LIABILITY MANAGEMENT (ALM) 8A 9

13

CHAPTER 8B : BANKING AS SOURCE OF CAPITAL INCLUDING NBFCs

TOPIC/HEADINGPAGENO.

1. BANK LOANS IN THE FORM OF WORKING CAPITALLOAN

8B 1

1.1. Different products for Working Capital Loan in IndianRupees

8B 1

1.1.1. Cash - Credit Account 8B 21.1.2. Bill Discounting 8B 31.1.3. Overdraft 8B 41.1.4. Factoring Services 8B 5

1.1.4.1. International Factoring and its Advantages 8B 51.1.4.2. Types of International Factoring 8B 6

1.1.5. Dealer Financing 8B 71.1.6. Term Loan for working capital purpose 8B 8

1.2. Different working capital product under Foreign Currency 8B 91.2.1. Buyer’s Credit 8B 91.2.2. Pre shipment credit in foreign currency 8B 91.2.3. Post Shipment Credit in Foreign Currency (PSCFC) 8B 91.2.4. Foreign Currency Non Resident Bank Loan [FCNR

(B)] Loan8B 10

2. BANK LOAN IN THE FORM OF TERM LOAN 8B 103. FINANCING THROUGH NON-BANKING FINANCE

COMPANIES8B 11

3.1. Loan against Property (LAP) 8B 114. PROJECT FINANCING 8B 12

4.1. Determination of Project Cost & Means of Finance 8B 134.2. Fixed Asset Cost determination 8B 134.3. Margin Money for Working Capital 8B 144.4. Evaluation of the project 8B 154.5. Issues related to Project /Infrastructure Funding 8B 16

14

4.5.1. Technical Feasibility 8B 164.5.2. Financial Viability 8B 164.5.3. Bankability of Project 8B 184.5.4. Risk Analysis 8B 18

4.5.4.1. Construction Risk 8B 184.5.4.2. Post Construction Risk 8B 19

5. WORKING CAPITAL MANAGEMENT 8B 205.1. Gross Working Capital Concept 8B 215.2. Net Working Capital Concept 8B 225.3. Positive and Negative Working Capital 8B 235.4. Factors Determining Working Capital Requirement 8B 235.5. Assessment of Working Capital from the bank’s point of

view8B 24

(a)Turn Over Method 8B 24(b)Maximum Permissible Bank Finance Method (MPBF) 8B 25(c) Cash Budget Method 8B 27

6. REVERSE MORTGAGE 8B 276.1. Regular RML 8B 286.2. RMLeA and its superiority to RML 8B 286.3. Risks associated with Reverse Mortgage 8B 296.4. Reasons for failure of Reverse Mortgage to takeoff in India 8B 29

15

CHAPTER 9 : MUTUAL FUNDSTOPIC/HEADING PAGE

NO.1. INTRODUCTION 9.3

1.1. Mutual Benefits 9.31.2. What is a Mutual Fund 9.31.3. Who can invest in Mutual Funds 9.41.4. How Mutual Funds work for you 9.41.5. Should we invest in Stocks or Mutual Funds? 9.4

2. EVOLUTION OF THE INDIAN MUTUAL FUNDINDUSTRY

9.5

First Phase – 1964-87 9.5Second Phase – 1987-1993 (Entry of Public Sector Funds) 9.5Third Phase – 1993-2003 (Entry of Private Sector Funds) 9.6Fourth Phase – since February 2003 9.6

3. CLASSIFICATION OF MUTUAL FUNDS 9.83.1. Functional Classification 9.83.2. Portfolio Classification 9.93.3. Ownership Classification 9.11

4. TYPES OF SCHEMES 9.114.1. Balanced Funds 9.114.2. Equity Diversified Funds 9.114.3. Equity Linked Tax Savings Scheme 9.124.4. Sector Funds 9.134.5. Thematic Funds 9.134.6. Arbitrage Funds 9.134.7. Hedge Fund 9.144.8. Cash Fund 9.144.9. Exchange Traded Funds 9.14

5. KEY PLAYERS IN MUTUAL FUNDS 9.155.1. Sponsor 9.155.2. Asset Management Company 9.155.3. Trustee 9.155.4. Unit Holder 9.165.5. Mutual Fund 9.16

16

a. Custodian 9.16b. Transfer Agents 9.16c. Depository 9.16

6. ADVANTAGES OF MUTUAL FUND 9.17a. Professional Management 9.17b. Diversification 9.17c. Convenient Administration 9.17d. Higher Returns 9.17e. Low Cost of Management 9.17f. Liquidity 9.17g. Transparency 9.17h. Other Benefits 9.17i. Highly Regulated 9.17j. Economies of scale 9.17k. Flexibility 9.17

7. DRAWBACKS OF MUTUAL FUND 9.18a. No guarantee of Return 9.18b. Diversification 9.18c. Selection of Proper Fund 9.18d. Cost Factor 9.18e. Unethical Practices 9.18f. Taxes 9.18g. Transfer Difficulties 9.18

8. EVALUATING PERFORMANCE OF MUTUAL FUNDS 9.191. Net Asset Value (NAV) 9.19

Illustration 1 9.202. Costs incurred by Mutual Fund 9.213. Computations of Returns 9.21

Illustration 2 9.22Illustration 3 9.22Illustration 4 9.22

4. Holding Period Return (HPR) 9.23Illustration 5 9.24Illustration 6 9.25

9. THE CRITERIA FOR EVALUATING THE PERFORMANCE 9.269.1. Sharpe Ratio 9.26

17

9.2. Treynor Ratio 9.279.3. Jensen’s Alpha 9.289.4. Expense Ratio 9.28

10. FACTORS INFLUENCING THE SELECTION OF MUTUALFUNDS

9.29

1. Past Performance 9.292. Timing 9.293. Size of Fund 9.294. Age of Fund 9.295. Largest Holding 9.296. Fund Manager 9.297. Expense Ratio 9.298. PE Ratio 9.299. Portfolio Turnover 9.29

11. SIGNALS HIGHLIGHTING THE EXIT OF THE INVESTORFROM THE MUTUAL FUND SCHEME

9.30

12. MONEY MARKET MUTUAL FUNDS (MMMFS) 9.3013. EXCHANGE TRADED FUNDS 9.31

13.1. What is an Exchange Traded Fund? 9.3114. REITS (REAL ESTATE INVESTMENT TRUSTS) 9.3315. INVITS (INFRASTRUCTURE INVESTMENT TRUSTS) 9.35

18

CHAPTER 10 : PRIVATE EQUITYTOPIC/HEADING PAGE

NO.1. MEANING OF PRIVATE EQUITY (PE) 10.12. CLASSIFICATION OF PRIVATE EQUITY 10.3

2.1. Venture Capital (VC) 10.32.1.1. Introduction 10.32.1.2. Business Model for a VC 10.42.1.3. Types of Funding by a VC 10.52.1.4. Angel Investor 10.7

2.2. Buyouts for a PE 10.72.2.1. Leveraged Buy Outs (LBOs) 10.72.2.2. Management Buy Outs (MBOs) 10.7

2.3. Hurdle rate 10.82.4. Paid in Capital 10.82.5. Term Sheet 10.8

(i) Fee structure 10.8(ii) Harvest year 10.9

(iii) Down round 10.9(iv) Methods for computing anti-dilution rights 10.9(v) Up round 10.10(vi) Break Fee 10.10(vii) Exclusivity Agreement 10.10

3. COST OF INVESTING IN PRIVATE EQUITY 10.104. EXIT ROUTES FOR A PE 10.105. VALUATION OF PRIVATE EQUITY TRANSACTIONS 10.116. PRIVATE EQUITY FUNDS (DISTRIBUTION OF RETURNS

IN GENERAL PARTNER AND LIMITED PARTNERS)10.12

Conclusion 10.13

19

CHAPTER 11 : INVESTMENT BANKINGTOPIC/HEADING PAGE

NO.1. CONCEPT OF INVESTMENT BANKING

1.1. The Players 11.21.2. The Components of Investment Bank 11.2

1.2.1. Corporate Finance 11.21.2.2. Sales 11.31.2.3. Trading 11.31.2.4. Research 11.41.2.5. Syndicate 11.5

1.3. Commercial Banking vs. Investment Banking 11.51.3.1. Commercial Banks 11.51.3.2. Private Contracts 11.51.3.3. Investment Banks 11.61.3.4. Public Securities 11.6

2. FUNCTIONS OF AN INVESTMENT BANK 11.72.1. Issue of IPO 11.7

(i) Hiring the Managers 11.8(ii) Due Diligence and Drafting 11.8(iii) Marketing 11.9

2.2. Follow-on offering of stock 11.92.3. Issue of Debt 11.102.4. Merger and Acquisitions (M&A) 11.10

2.4.1. Buy side Advisory 11.112.4.2. Sell side Advisory 11.11

2.5. Private Placements 11.122.6. Financial Restructurings 11.12

3. CHALLENGES IN INVESTMENT BANKING 11.134. DEVELOPMENTS IN INVESTMENT BANKING 11.145. MERCHANT BANKING AND ISSUE MANAGEMENT 11.14

5.1. Introduction 11.14

20

5.2. Responsibilities of Merchant Bankers as per SEBI ICDRRegulations

11.15

5.2.1. Communication 11.155.2.2. Compliance Certificate 11.155.2.3. Copies of offer documents to be available to public 11.155.2.4. Redressal of investor grievances 11.155.2.5. Due diligence 11.165.2.6. Audited financial statements in the offer document 11.165.2.7. Other responsibilities 11.16

5.3. Pre-Issue Management by Merchant Banker 11.165.4. Post Issue Management by Merchant Bankers 11.18

21

CHAPTER 12 : CREDIT RATINGTOPIC/HEADING PAGE

NO.1. WHAT IS CREDIT RATING? 12.12. RATING SERVICES 12.2

(i) Credit Rating 12.2(ii) Information Services 12.2(iii) Equity Research 12.3

3. OBJECTIVES OF CREDIT RATING 12.34. TYPES OF CREDIT RATING 12.35. USES OF CREDIT RATING 12.4

For users – 12.4For issuers – 12.4

6. CREDIT RATING PROCESS 12.47. CREDIT RATING METHODOLOGIES 12.6

(i) BUSINESS RISK 12.6(ii) FINANCIAL RISK 12.8(iii) MANAGEMENT EVALUATION 12.9(iv) BUSINESS ENVIRONMENT ANALYSIS 12.9

8. CAMEL MODEL IN CREDIT RATING 12.99. RATING REVISIONS 12.1010. CREDIT RATING AGENCIES IN INDIA 12.1111. CREDIT RATING AGENCIES ABROAD 12.1212. CREDIT RATING AGENCIES AND THE US SUB-PRIME

CRISIS12.12

13. LIMITATIONS OF CREDIT RATING 12.13

22

CHAPTER 13 : TREASURY OPERATIONSTOPIC/HEADING PAGE

NO.1. INTRODUCTION 13.1

1.2. Organization of Treasury 13.21.2.1. Front Office 13.3

1.2.1.1. Dealing Room 13.31.2.2. Back Office 13.41.2.3. Mid-Office 13.4

1.3. Function of Integrated Treasury 13.51.3.1. The Bank’s treasury function mainly involves 13.51.3.2. Corporate Treasury Management functions 13.5

2. RAISING AND DEPLOYMENT OF FUNDS 13.62.1. Raising of Funds 13.62.2. Factoring 13.8

2.2.1. Advantages of International Factoring 13.92.2.2. Two- Factor System 13.10

2.3. Deployment of Funds 13.123. RISK MANAGEMENT IN TREASURY OPERATIONS 13.12

3.1. Risk Management Framework 13.123.2. Types of Risks 13.133.3. Techniques for Risk Measurement 13.143.4. Risk management limits 13.153.5. Risk Mitigation 13.173.6. Risk Monitoring and Reporting 13.17

23

CHAPTER 14 : RISK MANAGEMENTTOPIC/HEADING PAGE

NO.1. INTRODUCTION 14.12. TYPES OF MARKET RISKS 14.1

2.1. Interest Rate Risk 14.22.2. Foreign Exchange Risk 14.22.3. Commodity Risk 14.22.4. Equity Risk 14.3

3. EARLY SIGNALS 14.34. CREDIT RISK 14.4

4.1. Two Way Risk 14.44.2. Risk – Return Trade Off 14.44.3. Credit Risk in Capital Market 14.5

4.3.1. Categories of Credit Risk 14.54.3.2. Measurement of Credit Risk in Banking Transactions 14.64.3.3. Factors Affecting the Credit Risk 14.64.3.4. Credit Risk Management in Banks 14.7

24

CHAPTER 15 : CREDIT DERIVATIVESTOPIC/HEADING PAGE

NO.1. COLLATERALIZED DEBT OBLIGATIONS (CDOs) 15.2

1.1. Types of CDOs 15.21.2. Risk involved in CDOs 15.3

2. CREDIT DEFAULT SWAP (CDS) 15.42.1. Main Features of CDS 15.42.2. Uses of Credit Default Swap 15.52.3. Parties to CDS 15.52.4. Settlement of CDS 15.52.5. CDS in India 15.6

3. PRICING OF CREDIT DERIVATIVE INSTRUMENTS 15.6

LINK https://resource.cdn.icai.org/48430bos32482.pdfChapter 1 Part SEBI(ICDR)REGULATIONS,2009 PG NO.

I PRELIMINARY 1.1

II COMMON CONDITIONS FOR PUBLIC ISSUES AND RIGHTS ISSUES 1.6III PROVISIONS AS TO PUBLIC ISSUE 1.16IV RIGHTS ISSUE 1.3V MANNER OF DISCLOSURES IN OFFER DOCUMENTS 1.32VI GENERAL OBLIGATIONS OF ISSUER AND INTERMEDIARIES WITH RESPECT TO PUBLIC ISSUE AND RIGHTS ISSUE 1.32VIA CONDITIONS AND MANNER OF PROVIDING EXIT OPPORTUNITY OF DISSENTING SHARAHOLDERS 1.38VII PREFERENTIAL ISSUE 1.40VIII QUALIFIED INSTITUTIONS PLACEMENT 1.48VIIIA INSTITUTIONAL PLACEMENT PROGRAMME 1.51IX BONUS ISSUE 1.54X ISSUE OF INDIAN DEPOSITORY RECEIPTS 1.55XA RIGHTS ISSUE OF INDIAN DEPOSITORY RECEIPTS 1.59XB ISSUE OF SPECIFIED SECURITIES BY SMALL AND MEDIUM ENTERPRISES 1.62XC LISTING OF INSTITUITIONAL TRADING PLATFORM 1.66XI LISTING OF SECURITIES ON STOCK EXCHANGES 1.69XII MISCELLANEOUS 1.71

Chapter 2 SEBI (LODR) REGULATIONS, 2015I PRELIMINARY 2.1II PRINCIPLES GOVERNING DISCLOSURES AND OBLIGATIONS 2.4III COMMON OBLIGATIONS OF LISTED ENTITIES 2.8IV OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS SPECIFIED SECURITIES 2.11

VOBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS NONCONVERTIBLE DEBT SECURITIES OR NON CONVERTIBLEREDEEMABLE PREFERENCE SHARES OR BOTH 2.33

VIOBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS SPECIFIED SECURITIES AND EITHER NON CONVERTIBLEDEBT SECURITIES OR NON CONVERTIBLE REDEEMABLE PREFERENCE SHARES OR BOTH 2.40

VII OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS IDR 2.41VIII OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS SECUTIRISED DEBT INSTRUMENTS 2.44IX OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS MUTUAL FUND UNITS 2.46X DUTIES AND OBLIGATIONS OF RECOGNISED STOCK EXCHANGES 2.47XI PROCEDURE FOR ACTION IN CASE OF DEFAULT 2.48XII MISCELLANEOUS 2.49

Chapter 3 SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015.I PRELIMINARY 3.1II RESTRICTIONS ON COMMUNICATION AND TRADING BY INSIDERS 3.4III DISCLOSURES OF TRADING BY INSIDERS 3.8IV CODES OF FAIR DISCLOSURE AND CONDUCT 3.9V MISCELLANEOUS 3.10

Chapter 4 SEBI(BUY BACK OF SECURITIES)REGULATIONS,1998I PRELIMINARY 4.1II CONDITIONS OF BUYBACK 4.2III BUYBACK THROUGH TENDER OFFER 4.3IV BUYBACK FROM THE OPEN MARKET 4.6V GENERAL OBLIGATIONS 4.10VI PENALTIES AND PROCEDURES 4.12VII MISCELLANEOUS 4.13

Chapter 5 SEBI(MUTUAL FUNDS)REGULATIONS 1996I PRELIMINARY 5.1II REGISTRATION OF MUTUAL FUND 5.3III CONSTITUTION AND MANAGEMENT OF MUTUAL FUND AND OPERATION OF TRUSTEES, ETC. 5.6IV CONSTITUTION AND MANAGEMENT OF ASSET MANAGEMENT COMPANY AND CUSTODIAN 5.10V SCHEMES OF MUTUAL FUND 5.16VI INVESTMENT OBJECTIVES AND VALUATION POLICIES 5.22VIA REAL ESTATE MUTUAL FUND SCHEMES 5.24VIB INFRASTRUCTURE DEBT FUND SCHEMES 5.29VII GENERAL OBLIGATION 5.33VIII INSPECTION AND AUDIT 5.38IX PROCEDURE FOR ACTION IN CASE OF DEFAULT 5.39X MISCELLANEOUS 5.40