Capital, Commodity and Money Market
CS Mohit Shaw
Dear Student, Open book examination is all about time management and selecting the right content from the given study material. Many of our friends commit the mistake of writing (copying) the whole content from the material without considering the valid points which ultimately kills the time. So we need to have patience. At the same time the greed to write more and more encompassing irrelevant points should be curbed. This master index has been prepared with the help of the Institute’s study material (published on July 2015 – printed mat). It is worth noting that the content table of the original mat does not cover the sub divisions of the topic which makes it difficult for a student to trace the exact answer from the book during the examination. Hence in order to reduce the effort and confusion of an aspirant this master index has been framed. Kindly note that certain topics in the index does not containpage numbers. This is because those topics are included in the electronic mat available on the search engines and not been covered under the printed mat of the given published date.So it will be beneficial for you to cover those topics as well (bold or highlighted ones). All the best!! Lesson 1 Economic Framework of Capital Market Particulars Introduction Constituents of the financial system Financial assets Classification of Financial Assets A. (i) Marketable assets (ii) Non-marketable assets B. (i) Money/cash asset (ii) Debt asset (iii) Stock assets Financial intermediaries Financial markets Classification of financial markets Unorganized Markets Organized Markets 1) Capital Market a) Industrial Securities Market b) Government Securities Market c) Long-term Loans Market 2) Money Market Features of Money Market Capital market Primary market
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
Page no 2
2
3
3-5
5 5-6 6 www.careerkeeda.com Page 1
Capital, Commodity and Money Market Secondary market What is Transaction Cost? Functions of capital market Role of capital market in resource allocation Capital formation Stages of capital formation
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
CS Mohit Shaw 6-7 7-8 8-9 9 10 10-11
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Capital, Commodity and Money Market
CS Mohit Shaw
Role of capital market in capital formation Lesson 2 Legal Framework Introduction Department of Economic Affairs (DEA)
11-12
16
Capital Market Division 1) 2) 3) 4)
Primary Market (PM) Secondary Market (SM) External Markets (EM) External Commercial Borrowings (ECB) 16-20
Ministry of Corporate Affairs Company Law Board National Company Law Tribunal Reserve Bank of India Securities and Exchange Board of India (SEBI) Legislations Grievance Redressal Mechanism Grievance Redressal Mechanism at – 1.Stock Exchange 2.SEBI Investor Protection Fund Investor Protection and Education Fund Securities Appellate Tribunal (SAT) Prevention of Money Laundering Act, 2002 Objective Offence of Money-Laundering Punishment for Money-Laundering Obligations of Banking Companies, Financial Institutions Intermediaries of Securities Market Cash transaction report Suspicious transaction reports Investigating Agencies in case of PMLA, 2002 Directorate of Enforcement Central Bureau of Investigation Financial Intelligence Unit – India (FUI-IND) Functions of FIU-IND The Financial Action Task Force (FATF) FATF recommendations 2012
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
20
20-22
22
and
23-27
27-31
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Capital, Commodity and Money Market
CS Mohit Shaw
Lesson 3 Framework of Market Infrastructure Institutions Introduction Securities Contract (Regulation) (Stock Exchanges and Corporations) Regulations, 2012 Recognition of Stock Exchanges and Clearing Corporations Net worth requirements Ownership of – 1. Stock Exchanges 2. Clearing Corporations Governance of Stock Exchanges and Clearing Corporations Listing of Securities Procedural norms
Part A: Recognition Part B : Action Plan for achieving Net worth Ownership Part C: Governance The Depositories Act, 1996 Objectives Eligibility condition for Depository Services Eligible Securities required to be in the Depository Mode Fungibility Rights of Depositories and Beneficial Owner Register of beneficial owner Pledge or hypothecation of securities held in a depository Furnishing of information and records by depository and issuer Option to opt out in respect of any security Depositories to indemnify loss in certain cases Enquiry and inspection Power of SEBI Power of SEBI to give directions Penalty Penalty for failure toi) Furnish information/return etc. ii) Enter into agreement iii) Redress investors' grievances iv) Reconcile records v) Comply with directions issued by SEBI Penalty for – 1. Delay in dematerialisation or issue of certificate of securities 2. Contravention where no separate penalty has been provided Power to adjudicate Factors to be taken into account by Adjudicating Officer Settlement of Administrative Civil Proceedings Recovery of amounts
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
36 Clearing
36-38
38-41
41-43
43-44
44-47
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Capital, Commodity and Money Market
CS Mohit Shaw
Crediting of penalties to Consolidated Fund of India Offences Offences by companies Cognizance of offences by Courts Composition of certain offences Power to grant immunity Special court Establishment of Special Courts Offences Tribal by Special Courts Appeal and Revision Application of Code to proceedings before Special Court Transitional provisions Appeals Appeal to Securities Appellate Tribunal Procedure and powers of Securities Appellate Tribunal Appeal to Supreme Court Right to legal representation Civil court not to have jurisdiction Areas on which rules may be framed by the Central Government Securities Contracts (Regulation) Act, 1956 Application for recognition of stock exchanges Grant of recognition to stock exchanges Withdrawal of recognition Power of Central Government to call for periodical returns or direct inquiries to be made Annual reports to be furnished to Central Government by stock exchanges Power of recognised stock exchange to make rules restricting voting rights, etc Power of Central Government to direct rules to be made or to make rules Clearing Corporation Power of SEBI to make or amend bye-laws of recognised stock exchanges Power of Central Government to supersede governing body of a recognised stock exchange Power to suspend business of recognised stock exchanges Penalty Lesson 4 Financial Intermediaries Framework Introduction Primary market intermediaries Merchant banker
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
47-48
48-49
49-51
51-56
60
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Capital, Commodity and Money Market
CS Mohit Shaw
SEBI (Merchant Bankers) Regulations, 1992 Capital adequacy General Obligations and Responsibilities of Merchant Banker Code of conduct for merchant bankers Responsibilities of Lead Manager Merchant Banker not to Act as such for an Associate Minimum underwriting obligation Prohibition to Acquire Shares Disclosure to SEBI Appointment of Compliance Officer Procedure for Inspection Procedure for Action against Merchant Banker in case of Default Registrars to an issue and share transfer agents
60-66
66
SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993
Criteria for Registration General Obligations and Responsibilities Code of conduct Procedure for Inspection Liability for Action in case of default Underwriters
SEBI (Underwriters) Regulations, 1993 Obligations and Responsibilities of Underwriters Appointment of Compliance Officer Inspection and Disciplinary Proceedings Procedure for Action in Case of Default
Banker to an Issue SEBI (Banker to an Issue) Regulation, 1994 Consideration of Application Procedure for Registration General Obligations and Responsibilities Code of Conduct Compliance Officer Procedure for Inspection Action on Inspection or Investigation Report Procedure for Action in Case of Default Debenture Trustees SEBI (Debenture Trustees) Regulations, 1993 Responsibilities and Obligations of Debenture Trustees Duties of Debenture Trustees Maintenance of Records Appointment of Compliance Officer Information to SEBI Action on Inspection or Investigation Report Procedure for Action in Case of Default Secondary market intermediaries Stock brokers and sub-broker
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
66-68
68
68-70
70
70-72
72
73-76
76 www.careerkeeda.com Page 6
Capital, Commodity and Money Market
CS Mohit Shaw
SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992 Rejection of Application of Brokers Registration of1. Sub-brokers 2. Trading and Clearing Members (Chapter IIIA…..) Registration Procedure for Trading and Clearing Member (Regulation 16I…) Registration of Trading and Clearing Members of Currency Derivatives Segment Registration Procedure General Obligations and Responsibilities Compliance officer Procedure for Inspection of Stock Brokers’ Offices Obligations of Stock Broker on Inspection by SEBI Procedure for Action in Case of Default Liability for1. Monetary Penalty 2. Action under the Enquiry Proceeding 3. Prosecution A Case Study on Fraudulent Dealings BishwanathMurlidharJhunjhunwala v. SEBI Submission of Annual Returns Certification by Practicing Company Secretary Portfolio Manager SEBI (Portfolio Managers) Regulations, 1993 Norms for Registration as Portfolio Managers Capital adequacy requirement Renewal of Certificate Conditions of Registration Period of Validity of Certificate Procedure where Registration is not granted Contract with Clients and Disclosures Responsibilities of a Portfolio Manager Investment of Clients Money Accounting by Portfolio Managers Reports by Portfolio Manager to the Client Action on Auditor’s Report and Disclosure to SEBI Compliance Officer Inspection and Disciplinary Proceedings Notice before Inspection Obligations of Portfolio Manager Appointment of Auditor Liability for Action in Case of Default Internal Audit of Portfolio Manager Custodian of securities
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
77-85
85-86
86
86-94
94 94-95
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Capital, Commodity and Money Market
CS Mohit Shaw
SEBI (Custodian Of Securities) Regulations, 1996 Application for Grant of Certificate Application to Conform to Requirements Furnishing of Information Consideration of Application for Grant of Certificate Capital requirement Procedure and Grant of Certificate Conditions of Certificate Period of Validity Renewal of Certificate Procedure where Certificate is not Granted Effect of Refusal to Grant Certificate Segregation of Activities Mechanism for Monitoring Review Prohibition of Assignment Separate Custody Account Agreement with the Client Internal Controls Maintenance of Records and Documents Appointment of Compliance Officer Information to SEBI Inspection and Audit Notice before inspection Obligations of Custodian Submission of Report to SEBI Liability for Action in Case of Default Foreign institutional investor SEBI (foreign institutional investors) Regulations, 1995 Consideration of Application Procedure for Grant of Certificate Validity of Certificate Grant of Certificate Procedure where Certificate is not Granted Application for Registration of Sub-accounts Procedure and Grant of Registration of Sub-accounts Responsibility of FIIS Investment Conditions and Restrictions Conditions for Issuance of Offshore Derivative Instruments General Obligations and Responsibilities Maintenance of Proper Books of Accounts, Records, Etc. Appointment of Compliance Officer Information to SEBI Procedure for Action in Case of Default Qualified foreign investors (QFIS) Qualified foreign investors Permissible transactions allowed for QFI’s investing into Indian securities Investment adviser
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
95-100
100
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Capital, Commodity and Money Market
CS Mohit Shaw
SEBI (Investment Advisers) Regulations, 2013 Registration of Investment Advisers Exemption from registration Qualification & certification Capital adequacy Registration General Obligations and Responsibilities Code of Conduct for Investment Adviser Maintenance of records Liability for action in case of default Audit investment adviser SEBI (Credit Rating Agencies) Regulations, 1999 Registration of Credit Rating Agencies Promoter of Credit Rating Agency Eligibility criteria Application to Conform to the Requirements Furnishing of Information, Clarification and Personal Representation Grant of Certificate Conditions of Certificate Procedure where Certificate is not granted Effect of Refusal to grant Certificate Code of Conduct Agreement with the Client Monitoring of Ratings Procedure for Review of Rating Internal Procedures to be Framed Disclosure of Rating Definitions Submission of Information Appointment of Compliance Officer Maintenance of Books of Accounts Records, etc. Steps on Auditor’s Report Confidentiality Rating process Restrictions on Rating of Securities Issued by Promoter and Certain Entities, Connected with A Promoter, or Rating Agency Procedure for Inspection and Investigation Notice of Inspection or Investigation Obligations of Credit Rating Agency Action in case of Default
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
100-103
103-110
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Capital, Commodity and Money Market Market Maker Guidelines for market maker Registration of the Market Maker The Obligations and Responsibilities of Market Makers Dissemination of Information Number of Shares per Market Maker Risk Containment Measures and Monitoring for Market Makers Capital adequacy Monitoring Price Band and Spreads SEBI (depositories and participants) Regulations, 1996 Rights and Obligations of Depositories and its Constituents Governance of Depository Governing Board, Disclosures and Corporate Governance Investor Protection Fund Audit under SEBI (Depositories And Participants) Regulations, 1996 Internal Audit of operations of Depository Participants Concurrent audit Issuance of DIS Verification of DIS Designated Depository Participant (DDP) Eligibility criteria for DDP Qualified Depository Participants Role and responsibilities of QDP Responsibilities on the QDP with respect to the regulator Concern need to be taken by QDP while registering a QFI Undertakings that the QDP's need to obtain from the QFI's Lesson 5 Primary Market Introduction Types of Issue Offer for sale OFS process Difference between Offer for Sale (OFS) process and IPOs/FPOs
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
CS Mohit Shaw
111-112
112-113 114 114 114-115
115-116
120-121 121 121-122
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Capital, Commodity and Money Market
CS Mohit Shaw
SEBI guidelines on Offer For Sale (OFS) of shares by promoters through the Stock Exchange mechanism Eligibility Definitions Size of Offer for sale of shares Advertisement and Offer Expenses Operational Requirements Risk Management Allocation Settlement Handling of default in pay-in Issuance of Contract Notes Withdrawal of offer Cancellation of offer Understanding the guideline step wise Different form of Prospectus Offer Document Draft Offer Document Red Herring Prospectus Shelf Prospectus
122-126
126-127
127-128
Filing of Offer Document Lead Manager Pre-issue Management Post-issue Management Co-ordination with Intermediaries
128-130
Underwriting
Due Diligence Due Diligence in IPO/FPO Pre-issue-Due Diligence Certificates Post issue diligence Basis of allotment Example-Allocation to Retail Investor Book Building Book Building process through a Flowchart Additional disclosures in case of Book Building Procedure for Bidding Alternate Method of Book Building Green Shoe Option Facility Pre-issue activities Rights issue Steps involved in issue of rights shares Bonus issue Advantages of Issuing Bonus Shares SEBI Regulations Pertaining to Bonus Issue Steps involved in Issue of Bonus Shares
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
130-136
136-137
137-145
145-153
153-156
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Capital, Commodity and Money Market
CS Mohit Shaw
Preferential issue SEBI ICDR Regulations, 2009 Pertaining to Preferential Issue Non-Applicability Qualified Institutions Placement Qualified Institutional Buyer Conditions for making QIP Intermediaries involved in QIP and their roles Placement document Pricing Issue of partly paid-up securities Restrictions on allotment Minimum numbers of Allotters Validity of the special resolution Restriction on amount raised Tenure Transferability of Securities
156-160
160 -165
Institutional Placement Programme
Conditions for Institutional Placement Programme Appointment of Merchant Banker Offer document Pricing and Allocation/Allotment Restrictions Restrictions on size of the offer Period of Subscription and display of demand Withdrawal of offer Transferability of eligible securities Listing agreement Benefits of listing Listing agreement Laws governing Listing Event based and time based Compliance under Listing Agreement Lesson 6 Secondary Market Introduction Corporate actions Requirement under listing agreement for corporate action Continuous listing Rule 19(2)(b) Rule 19A Clause 40A of Listing Agreement 40B – Take Over offer Material events under listing agreement Price sensitive information (PSI) Submission of interim and annual financial results under listing agreement
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
165-171
176
176-179
179-181 181-182
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Capital, Commodity and Money Market
CS Mohit Shaw
Disclosures under listing agreement Disclosure relating to shareholding pattern (clause 35) Disclosure under clause 41 Disclosure regarding agreements with media companies (clause 53) Corporate Governance Regulatory framework of Corporate Governance in India Corporate Governance -Voluntary Guidelines 2009 Guidelines on Corporate Governance for Central Public Sector Enterprises Applicability CPSEs listed on Stock Exchanges: Non-listed CPSEs National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business, 2011 Companies Bill, 2012 Evolution of clause 49 of listing agreement Highlights of Clause 49 Composition of Board of Directors Definition of Independent Director Limit on number of Directorships Maximum tenure of Independent Directors Formal letter of appointment to Independent Directors Performance evaluation of Independent Directors Separate meetings of Independent Directors Training of Independent Directors Nominee Directors to be treated as Independent Director Non Executive Directors’ Compensation and Disclosures Disclosures on Remuneration of Directors Code of Conduct Board of Meetings Limit on membership of committees Other provisions as to Board and Committees Code of Conduct Whistle Blower Policy Audit committee Quorum Powers Meetings and Role Review of Information by Audit Committee Nomination and Remuneration Committee Subsidiary company Shareholders/Investors Grievance Committee Risk Management Related Party Transaction Disclosures CEO/CFO certification
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
182-184
184 184-185
185
185 186-187
187-190
190-191
192-194
194-196 196 196-197
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Capital, Commodity and Money Market
CS Mohit Shaw
Report on Corporate Governance Compliance Certificate Non-mandatory Requirements Comparison between revised Clause 49 and Companies Act, 2013 Audit qualifications Training of Board Members Mechanism for evaluating non-executive Board Members Whistle blower policy Stock exchange mechanism Arbitration Mechanism Kinds of disputes covered under Exchange Arbitration Mechanism Legal framework for Arbitration Mechanism provided by Exchange Arbitration Mechanism at Stock exchanges Maintenance of a Panel of Arbitrators Code of Conduct for Arbitrators Arbitration Appellate Arbitration Arbitration fees Place of Arbitration Implementation of Arbitral Award in favour of Clients Record and Disclosures Margining Initial Margin Maintenance Margin Types of margins in cash and derivative segment Value at Risk (VAR) margin Example Extreme loss margin Example Mark-to-Market (MTM) margin Example Derivatives segment Initial margin Exposure margin Premium margin Trading of securities Order placing Order execution Contract note preparation Delivery and Clearing Share transfer Settlement system Clearing and settlement Clearing & settlement process Trade Guarantee Fund Trading Software Stock Market Indices The index is as per printed MAT issued by the Institute July 2015/PRN -2981
197 198-211
212
212-216
216-218
218-219
219
220-221
221 221-222 222-223 223
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Capital, Commodity and Money Market
CS Mohit Shaw
Types of indices BSE indices NSE indices
224 BSE indices
Sensex Sensex - Scrip Selection Criteria S & P BSE Sensex Calculation Methodology Free-float 1. Definition 2. Example 3. Major Advantages 4. Determining Free-float Factors of Companies 5. Free-float Bands Formula for Calculation of Index a) Example b) Index closure algorithm c) Maintenance of BSE Indices d) On - Line Computation of the Index e) Adjustment for Bonus, Rights and Newly Issued Capital f) Base Market Capitalization Adjustment CNX nifty Selection Criteria for CNX Nifty Price Index Calculations Formula Investible weight factors (IWFS) Example Lesson 7 Capital Market Investment Institutions Introduction National Level Institutions 1. All-India Development Banks (AIDBs) 2. Specialised Financial Institutions (SFIs) 3. Investment Institutions State Level Institutions 1. State Financial Corporations (SFCs) 2. State Industrial Development Corporations (SIDCs) Qualified Institutional Buyers Anchor investor Private Equity Types of private equity 1. Leveraged Buyout (LBO) 2. Venture capital 3. Growth capital Venture capital Areas of investment Stages Of Investment Financing Early stage financing Later stage financing
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
224-230
230-231 231-232
236-238
238-239
239
240 240-241
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Capital, Commodity and Money Market
CS Mohit Shaw
Angel fund
242
Types of angel investors Core angels High-tech angels Return on investment (ROI) angels Enthusiast angels Micromanagement angels Professional angels Pension fund Formal sector pensions Pension fund management Foreign Portfolio Investor Categories of FPI Investment conditions and restrictions Foreign Institutional Investor(FII) Why FIIs required? Investment by FIIs Investment by FIIs under portfolio investment scheme Qualified foreign investor Mutual fund Types of mutual fund schemes Fixed maturity plans Exchange traded funds (ETFs) Capital protection oriented schemes Gold exchange traded funds (GETFs) Quantitative funds Funds investing abroad Fund of funds (FOFs) Alternative investment funds Types of AIFs Where an AIF can invest Category wise investment condition Conditions for – 1. Category II AIFs 2. Category III AIFs Hedge funds Domestic hedge fund Offshore hedge fund A taxonomy of hedge fund strategies Market benefits of hedge funds Lesson 8 Capital Market Instruments Introduction Equity Shares-Characteristics Shares with Differential Voting Rights+ Example (Pantaloons Retail India Ltd, Tata Motors) Pre-conditions for issue of DVRs
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
242-243
243-244
244-245
245-247
247-250
250-251
254 254-255 255-256
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Capital, Commodity and Money Market
CS Mohit Shaw
Prohibition on Superior Rights – Clause 28 A AnandJaiswal v. Jagatjit Industries Limited- Case Law Ruling by company law board Reform by SEBI Preference shares Cumulative preference shares Non-cumulative preference shares Convertible preference shares Redeemable preference shares Participating preference shares Non-participating preference shares Fully convertible cumulative preference share (EQUIPREF) Debentures Features Types Classification based upon convertibility Basic features of Convertible Debentures Advantages to the investor Fully Convertible Debentures with interest (optional) Non-convertible debentures (NCDs) with Put and Call Options Put options Call option 1. Example Bonds Characteristics Types Warrant Sweat equity shares Share warrant Position of the holder of a share warrant Conditions for the issue of a share warrant Secured premium notes (SPN) Example Equity shares with detachable warrants Foreign Currency – 1. Convertible Bonds (FCCBS) 2. Exchangeable Bonds (FCEBS) ADR and itsAdvantages GDR Advantages to (I) Issuing company (II) Investor Difference between American Depository Receipts (ADR) and Global Depository Receipts (GDR) Indian Depository Receipts (IDRs) Benefits
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
256-257
257-259
259-262
262
262-263 263 263-264
264 264 265-266 266
266-267
267
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Capital, Commodity and Money Market
CS Mohit Shaw
Derivatives Futures Options& its Example Index futures & options Currency futures Interest Rate Futures (IRFs) Stock futures and stock options Pricing of stock futures Exchange traded funds (ETFs)
267 267-268 268-269 269 270
Lesson 9 Resource Mobilization through International Markets Introduction
274
American Depository Receipt(ADR) Examples ADR Ratio Types of ADRs Global Depository Receipts (GDRs) Advantage of ADRs and GDRs to – Investor Issuer Process involved in issue of ADR/GDR Sponsored ADR/GDR issue Two-way fungibility scheme Issuance of shares under ADR/GDR Provision of Companies Act 2013 relating to issue of GDR Companies(Issue of Global Depositary Receipts) Rules, 2014 Condition for the issue of depository receipts Manner and form of depository receipts Voting rights Proceeds of issue Non applicability of certain provisions of act Statutory approvals required for issue of GDR/ADR Agencies involved in ADR/GDR issue Agreements and related documents 1. Subscription Agreement 2. Depository Agreement 3. Custodian Agreement 4. Escrow Agreement 5. Offering Circular Procedural requirements Roadshows Stepwise procedure for issue of ADR/GDR Reporting of ADR/GDR issues FCCB and ordinary shares (through depository receipt mechanism) scheme,1993 Eligibility Transfer and redemption
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
274-275 275-276 276 277 278
278-286
286-287 287-288 288-289 289-290 290
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Capital, Commodity and Money Market
CS Mohit Shaw
Taxation on shares issued under global depository receipt mechanism Listing of GDR London Stock Exchange
290
Different ways in which a company can list in London Listing on the main market Sponsor FSA’s requirements for a company to receive listed status 1. Company’s incorporation status 2. GDR requirements 3. Continuing obligations Prospectus Block Listing Documents required to be provided – To FSA On the day of listing After Listing 4. Continuing obligations on the main market Listing on professional security market Requirement of prospectus Key eligibility criteria Admission process Trading Key continuing obligations Listing on AIM Admissions Criteria Nominated Advisers (Nomads) Admission Process Key continuing obligations Luxembourg Stock Exchange Listing Requirements Continuing obligations Listing of ADR NASDAQ The NASDAQ global select market (NGSM) NGSM quantitative listing and maintenance standards 1. Quantitative initial listing standards Liquidity Requirements Financial Requirements 2. Quantitative maintenance requirements The NASDAQ Capital Market (NCM) NCM Quantitative Listing and Maintenance Standards The NASDAQ Global Market (NGM) NGM Quantitative Listing and Maintenance Standards NEWYORK Stock Exchange (NYSE) NYSE Quantitative Listing and Maintenance Standards
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
290-294
294-295
295-296
296 296-297 297
297-299
299-300 301-303 303-306 www.careerkeeda.com Page 19
Capital, Commodity and Money Market
Chapter 10 Economics of Commodities Marketing Introduction (what is commodity?) Types of commodities Commodity markets Marketing of Agricultural Commodities Direct marketing Indirect Marketing Contract Farming
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
CS Mohit Shaw
310 310-311 311-312
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Capital, Commodity and Money Market Storage Types of storage 1. Underground Storage Structures& Their Advantages 2. Surface Storage Structures Warehousing Importance & working of warehouses Types of warehouse 1. On the basis of(a) Ownership (b) Commodities Stored Warehousing in India 1.Central Warehousing Corporation(CWC) 2.State Warehousing Corporation(SWC) 3.Food Corporation of India (FCI) Variance in commodity market Weather derivatives Freight derivatives Electricity derivatives Catastrophe derivatives Carbon derivatives Hedging Hedging risks Understanding Basis Risk Chapter 11 Commodities Market Operations Introduction Role of commodity exchanges Evolution of commodity exchanges Origin of Commodity Market in India Regulatory framework Three-tier regulatory system Central Government Forward Market Commission Exchanges Forward Market Commission Of India Functions Powers Commodity exchanges in India Categories Features: National and Regional exchanges Participants/Players Hedgers Speculator 1. Need 2. Difference between a speculator and gambler Arbitrageurs
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
CS Mohit Shaw
313-314
314-316
316-321
321
326 326-327 327-328 328
328-329
329-330
330-332
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Capital, Commodity and Money Market
CS Mohit Shaw
Commodity Producers/Consumers Commodity Processors Commodity Traders Financial Institutional/Dealers Investors Trading in Commodity Market a) Margin money b) Different types of margin money payable on futures Initial/Ordinary Margin Mark to Market (M2M or MTM) Special/Additional Margin Maintenance Margin Delivery Period Margin Order types- Time, Price & Other Conditions Electronic Spot Exchanges Exchange Membership Clearing and Settlement Clearing Clearing Mechanism Clearing Banks Depository Participants Settlement–Settlement Mechanism(Daily Mark to Market and Final settlement) Settlement Methods a) Physical Delivery of the Underlying Asset 1) Compulsory Delivery Contract 2) Sellers Right Contract 3) Intention Matching Contract b) Closing out offsetting positions c) Cash Settlement Entities Involved In Physical Settlement Accredited Warehouse Approved Registrar and Transfer agents (R&T agents) Approved Assayer Instruments available for trading (Forward Contract & its limitation) Futures Distinction between Futures & Forward Contracts Futures Terminology a) Spot Price b) Future Price c) Contract Cycle d) Expiry Date e) Delivery Unit f) Basis g) Cost of Carry h) Initial margin i) Marking to Market (MTM) j) Maintenance Margin Options a) b) c) d)
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
332-333
333-334
334-335 335-336 336
336-337 337-338
339-341
341-342 342-343 343
344
344
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Capital, Commodity and Money Market
CS Mohit Shaw
Options Terminology a) Commodity options b) Stock options c) Buyer of an option d) Writer of an option e) Option price f) Expiration price g) Strike price h) American Options i) European Options j) In the money options k) At the money options l) Out of the money options m) Intrinsic value of an option n) Time value of an option Using Commodity Exchanges for Hedging, Speculation and Arbitrage Hedging Basic Principle Short Hedge Long Hedge Advantages Speculation Bullish, Buy Futures Bearish Commodity, Sell Futures Arbitrage Overpriced Commodity Futures : Buy Spot, Sell Futures Underpriced Commodity Futures : Buy Future, Sell Spot Chapter 12 Money Market Introduction Features of money market Money market vs. Capital market Growth of money market Structure and Institutional Development Money Market Instruments Government Securities Gilt-Edged(Government) Securities Call Money and Notice Money Term Money Bill discounting Procedures Factors influencing discount rates Bill Rediscounting Scheme (BRD) Repurchase agreements Banker’s acceptance
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
345
346
346-347
348-349
349-350
354 354-355 355 355-356 356-357 357 357-358 358 358-359 359 359-360 361 361 362
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Capital, Commodity and Money Market Treasury bills Benefits of investing in T bills Features of T-Bills Primary Market - issuance of T bills [Auction Technique] Secondary market Types of auction for T bills (2 types) Multiple Price based or French Auction Uniform Price based or Dutch Auction Certificates of deposits Eligibility Aggregate Amount Minimum size of issuance and denominations Maturity Discount/Coupon rate Reserve Requirements Transferability Trades in CDs Format of CDs Security aspects Payment of certificate Issue of Duplicate Certificates Accounting Inter-corporate deposits Commercial Bills Commercial Paper (CP) a) Eligible issuers b) Rating requirements c) Maturity d) Denomination e) Limits and the amount of issue of CP f) Issuing & Payment agent (IPA) g) Investment in CP h) Trading in CP i) Mode of issuance j) Preference for Dematerialisation k) Payment of CP l) Procedure for Issuance Money Market Mutual Funds (MMFS) Factoring Definition Parties in factoring Steps for factoring Advantages to seller Types of factoring Letter of credit (reasons for using LC) Basic forms of LCS Working mechanism for Letter of Credit transaction Bill of exchange a) b) c) d) e)
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
CS Mohit Shaw
362-366
366-368
368 368
368-371
371
371-374
374-375 375 375-376 377 www.careerkeeda.com Page 24
Capital, Commodity and Money Market FIMMDA Foreign Exchange Dealer’s Association of India
CS Mohit Shaw 378 378
Chapter 13 Insider Trading Introduction Provision Relating to Trading in Companies Act, 2013 (Section 195) SEBI (Prohibition of Insider Trading) Regulations, 1992
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
382 383 www.careerkeeda.com Page 25
Capital, Commodity and Money Market
CS Mohit Shaw
Important Definition a) Insider b) Connected Person c) Person deemed to be a Connected Person d) Price Sensitive Information e) Unpublished Prohibition on dealing communication or counselling on matters relating to Insider Trading Non applicability of Regulation 3A in certain case Code of internal procedures and conduct for listed companies and other Entities Disclosures a) Disclosure of interest or holding in a listed companies by certain persons Initial disclosure [Regulation 13(1), 13(2), 13(2A)] Continual Disclosure[Regulation 13(3), 13(4), 13(4A)] b) Disclosure by company of stock exchange c) Disclosure Through e filing Model code of conduct for prevention of insider trading for listed Companies Compliance officer, need to know, prevention of misuse etc. Prevention and misuse – Trading window & its norms Preclearance of trading Other restrictions Reporting requirements for transaction in securities Penalty for contravention of code of conduct Model code of conduct for prevention of insider trading for other entities Chinese wall Restricted/GreyList Other restrictions Code of corporate disclosure practices for prevention of insider trading Corporate Disclosure Policy (to be followed by listed companies) Investigation by SEBI (Power, Right & Obligation on insider, Directions by SEBI) Penalty provisions for violations of the Regulations Penalty under Section 15G of the SEBI Act 1992 Appeal to Securities Appellate Tribunal Role of company secretary in compliance requirements (external reporting by CS as well) SEBI’s view on the role of the compliance officer in case of insider trading [Mr. G Jayaraman in the matter of Satyam Computer Services Ltd]
383-385
385 386
386-387
387-388
389
390
391 392-393 394 395-397 397-398
Chapter 14 Substantial Acquisition of Shares and Takeovers Introduction
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
402
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Capital, Commodity and Money Market
a) b) c) d) e) f) g) h) i) j) k) l) a) b) a) b) c) a) b) c)
CS Mohit Shaw
Important definitions Acquirer Acquisition Control Enterprise value Frequently traded shares Identified date Offer period Persons acting in concert Target company Tendering period Volume weighted average market price Volume weighted average price Trigger point for making an open offer by an acquirer 25% shares or voting rights Creeping acquisition limit Open offer Mandatory offer Voluntary open offer Conditional offer Open offer process Pre-open offer During the offer Post open offer
402-405
405
405-407
408-410 Activity Chart (An activity chart for calculation of prescribed time period for open offer execution.This is the minimum timeline as prescribed under SEBI takeover Regulations, 2011) Public Announcement a) Submission of Public Announcement(PA) b) Publication & Submission of Detailed Public Statement(DPS) Contents of PA & DPS c) Procedure of filing PA & DPS Offer price Provision of Escrow Mode of payment Disclosures[Regulations 29(1), 29(2), 30(1), 30(2), 31(1), 31(2)] Exemptions Regulation 10 - Automatic Exemptions Regulation 11 - Exemption by SEBI Procedure for filing the application under Regulation 11 Case Study Beyond Chapters mentioned in the index Report of the Committee on Capital market Report of the financial sector legislative reform commission The draft Indian Financial code
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
410-412
412-413 413 413-414 414-415 415 415-418 419 420 420-421
423 423
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Capital, Commodity and Money Market
CS Mohit Shaw
Regulators (there is a table given for easy understanding) Report of the takeover Regulation – Mr. C Achuthan (Chairman)
424
Others – Summary of key recommendation (a simplified table is given from page 426) Dhanuka committee Report on Securities law Executive Summary on Principle recommendations Pertaining to Draft securities Bill and draft depositories (amendment) Act, 1998 (Part IA) Dematerialisation/depositories Act, 1996 – Amendments (Part IB) Pertaining to working draft of Companies Bill, 1997 (Part II) Recommendation for issue of an ordinance for moving of an urgent bill to curb the growing evil emanating from collective investment schemes
The index is as per printed MAT issued by the Institute July 2015/PRN -2981
425-439 439
440-444
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