nism update december 2010

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INSIDE: India Investment Management Conference Agenda Clearing House and Counterparty Default Risk in Derivatives Market NISM DECEMBER 2010 UPDATE SORM Developing a Common Visual Language for Personal Financial Education Volume 3 / Issue 5 Certification for Securities Operations and Risk Management m e e n l t t t e S n i g r a e l C RISK Management

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In November 2010, NISM launched a first of its kind, mandatory certification examination titled: Securities Operations and Risk Management (SORM) Certification Examination.It covers the operational aspects of securities markets which include trading, clearing and settlement, redressal of investor grievances, risk management etc. In this Issue of NISM Update we share with you more details of this certification examination.

TRANSCRIPT

Page 1: Nism Update December 2010

INSIDE:India Investment

ManagementConference

Agenda

Clearing House and Counterparty Default Riskin Derivatives Market

NISMDECEMBER 2010UPDATE

SORM

Developing a Common Visual Language for Personal Financial Education

Volume 3 / Issue 5

Certification for Securities Operations and Risk Management

mee

nlt

t

teS

ni graelC

RISKManagement

Workshop for Trustees of Mutual Funds and Independent Directors of Asset Management CompaniesTuesday, January 11, 2011, Mumbai

he next in the series of workshops that NISM conducts for Trustees and TIndependent Directors is scheduled on January 11, 2011. The two key sessions that will be covered in this workshop are:

1.Risks and Rewards in DerivativesDr. Sayee Srinivasan, Head - Product Strategy, Bombay Stock Exchange

2.Operational Risk and Fund Financial StatementsShri Sanjay Panse, Partner, S. Panse & Company

Senior professionals from SEBI and NISM will also be present at the event to interact with the participants.

We will also be launching an online discussion forum for Trustees and Independent Directors. This will make sharing of views, documents, easier and faster. On this forum we will also upload presentations and videos of past workshops for reference.

A sample screen of the online forum.

12 December 2010NiSM

Page 2: Nism Update December 2010

NISM UPDATE Team

2 December 2010

In November 2010, NISM launched a first of its kind, mandatory certification examination titled: Securities Operations and Risk Management (SORM)

Certification Examination. It covers the operational aspects of securities markets which include trading, clearing and settlement, redressal of investor grievances, risk management etc. In this Issue of NISM Update we share with you more details of this certification examination.

Also read about:• Clearing houses and counterparty default risk in derivatives market• Developing a common visual language for personal financial education

Post-event round-up:nd

• 2 Roundtable Conference on Direct Tax Code: “Implications for Securities Markets: Investors, Issuers and Intermediaries” on Monday, December 20th 2010

Upcoming events:• India Investment Management Conference in association with CFA Institute

thand IAIP on Friday, Jan 7 2011• Workshop for Trustees of Mutual Funds and Independent Directors of AMC

thon Tuesday, January 11 2011

For our first big event in 2011, the India Investment Management Conference, we are glad to have a line-up of world class experts who will share their insight on global investment strategy and contemporary valuation methods, followed by domestic gurus discussing the latest trends in performance reporting and disclosure, fixed income and alternative investments, and investment outlook in India. We hope to meet some of our readers at the event

We trust you had a wonderful Christmas and wish you a very happy new year.

NATIONAL INSTITUTE OF SECURITIES MARKETSNISM Bhavan, Plot No. 82, Sector - 17, Vashi, Navi Mumbai - 400 705 Phone: +91- 022-66735100-106 | Fax: 022-66735110www.nism.ac.inNiSM

NiSM

Foreword

4.00 p.m.

4.45 p.m.

Refreshment Break

Power Panel – India Investment OutlookPanel Moderator:Dr. Venkatraman Anantha-NageswaranChief Investment Officer, Bank Julius Baer

Panelists:Mr. Vallabh Bhansali Chairman, ENAM Securities Ltd.Mr. Madhusudan KelaChief Investment Strategist, Reliance CapitalMr. Akash PrakashDirector & CEO, Amansa Capital Pte. Ltd.

5.45 p.m.

Closing Remarks

Vote of Thanks

End of Conference

Prof. G. SethuOSD In-charge, NISM

Mr. Vidhu Shekhar, CFAVice President, IAIP

11December 2010 NiSM

st1 Concurrent sessions“Reporting and Disclosure”

Performance Measurement and Reporting

Panel Moderator:Mr. Trevor PersaudDirector, Head of Investment Risk Oversightand Performance Analysis, Prudential Asset Management (Singapore) Ltd

Panelists:Mr. Aditya AgarwalManaging Director, Morningstar IndiaMs. Fannie Fang, CFA, CIPMDirector, Global Investment Performance standards, CFA InstituteMs. Ashu SuyashManaging Director and Country Head, FIL Fund ManagementMr. K. N. Vaidyanathan Executive Director, SEBI

IFRS update

Panel Moderator:Mr. Suresh MahadevanManaging Director, UBS Investments, Mumbai

Panelists:Mr. K Balachandran Co-Founder and Director, IRIS Business Services LimitedMr. Jamil Khatri Executive Director, Accounting Advisory Services, KPMGMr. Makarand Paladkar

2.00 p.m.

3.00 p.m.

nd2 Concurrent sessions“Fixed Income & Alternative Assets”

Fixed Income

Panel Moderator:Mr. Jayesh MehtaManaging Director and Treasurer, Bank ofAmerica

Panelists: Mr. Anjan BaruaDeputy Managing Director & Group Executive (Global Markets), State Bank of India Dr. H. K. Pradhan Professor of Finance & Economics,

XLRI Jamshedpur Mr. Nilesh ShahDeputy Managing Director, ICICI Prudential

Asset Management Company Limited Mr. Naresh TakkarManaging Director, ICRA Ltd.

Private Equity, Venture Capital & Real Estate

Panel Moderator:Mr. Vikram UtamsinghHead, Markets and Private Equity Advisory, KPMG

Panelists:Mr. Rajeev GuptaMD, Carlyle India Advisors Private LimitedMr. Satish MandhanaManaging Director, IDFC Private EquityMr. S. Sriniwasan

2.00 p.m.

3.00 p.m.

Break-Out Sessions (Two tracks)

Page 3: Nism Update December 2010

India Investment Management Conference What's Next after the Recovery?

Agenda – 7th January 2011

10 December 2010NiSM

8.30 a.m.

9.00 a.m.

9.40 a.m. Plenary Session I

Registration

Conference WelcomeMr. John Rogers, CFA, President and CEO, CFA Institute

Opening RemarksMr. Sunil B. Singhania, CFA, President, IAIP

Keynote Speech Mr. C. B. Bhave, Chairman,SEBI

Global Investment Strategy & OutlookMs. Abby Joseph Cohen, CFA, Senior InvestmentStrategist and President Global Markets Institute,Goldman Sachs

Q&A Session: Moderated by Mr. Uday KotakExecutive VC & MD, Kotak Mahindra Bank

7 January 2011

Grand Hyatt Mumbai Mumbai, India

CFA Institute Members, IAIP Members,

NISM Graduates (CFERM/CSMP

Program) Rate: INR 8,400

CFA Institute Candidates /

NISM Students Rate: INR 9,450

Non-member Rate: INR 10,500

7DATE

VENUE

FEES

Registration: [email protected] +91 22 66735100-06

10.40 a.m. Plenary Session II

11.40 a.m.

12.00 p.m. Plenary Session II (Continued)

1.00 p.m.

Valuation Inferno: Dante Meets DCF - Avoiding CommonMistakes in Valuation Analysis (Part 1)Prof. Aswath Damodaran, Professor of Finance, Leonard N. Stern School of Business,New York University

Refreshment Break

Valuation Inferno: Dante Meets DCF - Avoiding CommonMistakes in Valuation Analysis (Part 2)Prof. Aswath Damodaran, Professor of FinanceLeonard N. Stern School of Business, New York University

Q&A SessionModerated by Dr. K. M. Abraham, CFAWhole Time Member, SEBI

Lunch

3December 2010 NiSM

nd2 Round Table Conferenceon Direct Tax Code“Implications for Securities Markets: Investors, Issuers and Intermediaries”

With the aim of providing a platform for various stakeholders in securities markets to discuss various issues and concerns related to the revised Direct Tax Code, NISM organized Direct Tax Code- Second Round Table Conference on December 20, 2010 at Hotel Taj Land's End, Bandra (E), Mumbai. Mr. C.K.G. Nair, Director - Capital Markets, Ministry of Finance inaugurated the conference.

In his inaugural speech, Mr. C.K.G Nair emphasized on the importance of Direct Tax Code in the emerging India, the aim with which it was drafted and also the significance of feedback received from the participants. Mr. Nair also mentioned the major areas where the bill has been revised on flexibility of corporate tax, reintroduction of difference between long term and short term capital gains tax, securities transaction tax and minimum alternate tax. Leading Tax experts like Mr. Ketan Dalal, Mr. Kanu Doshi and Mr. Percy Chhapgar addressed the above areas and their impact on securities markets. 30 representatives from various financial intermediaries participated in the conference. The conference concluded with remarks from Mr. Nair followed by a high tea.

Monday, December 20, 2010, Mumbai

Page 4: Nism Update December 2010

ISM has been established with the primary Nobjective of developing and implementing the Certification Framework for the Indian securities markets. This includes establishing knowledge benchmarks for various market functions, developing and implementing certification examinations and continuing professional education programs.

In order to bring in uniformity and a level playing field for all the professionals working in the securities industry, NISM has developed certification examinations focused on the different areas of this

Industry such as Currency Derivatives, Interest Rate Derivatives, Mutual Fund Advisors, Registrars and Transfer Agents to name a few.

Securities Operations and Risk Management (SORM) Certification Examination

The Securities Operations and Risk Management Certification Examination aims at building a cadre of professionals who would be skilled in understanding the operational aspects of the securities industry. This examination is a first of its kind in India.

Securities Operations and Risk ManagementCertification Examination Mitu Bhardwaj, Programme Manager at NISM

4 December 2010NiSM

SORM

RISKManagement

Clearing

Settlement

9December 2010 NiSM

Entry Load's removal in Mutual Funds and its implication on investors and advisors:

Here are some samples:

Why should an individual consider investing in equities markets:

Page 5: Nism Update December 2010

n the process of creating content for various I investor education and financial literacy initiatives, we talk to many individual investors and the two points that are almost always part of the discussion are:

1. Lot of confusion prevailing today because of i n f o r m a t i o n o v e r l o a d a n d d i f f e r e n t people/entities presenting content that’s often inconsistent or contradictory.

2. Very few people have the time, inclination and ability to read large volume of text matter to learn about personal finance and investing.

These insights tell us that we need a neutral and trusted body to bring in some amount of standardization in the base content for personal financial education and make it available to public at large. There is also a need to introduce innovative visual formats for customizing the content based on the target audience and delivery mediums.

Creation of a common visual language for personal financial education can be a good solution. This would involve bringing together professionals from various domains including educators, instructional designers, graphic artists, copywriters, journalists, and financial practitioners etc. to create a common base language for financial education which can then be used by as many people/entities as feasible. This would reduce duplication of effort in creating content and tackle the problem of inconsistency.

O n o u r i n v e s t o r e d u c a t i o n w e b s i t e we have experimented with a

visual style for explaining a few financial concepts and have received a highly positive feedback.

We did some further research on this subject and came across The Visualizing Finance Lab (VFL) - a working group of researchers, artists, and educators affiliated with Parsons the New School for Design and the The New School who are interested in the intersection of finance, education and design. The VFL explores the ways in which complex financial situations and dynamics can be explained through visual, metaphorical and narrative representations. The lab's initial goal is to develop a vocabulary for describing illustrations and other visualizations of the recent financial crisis, and creating a searchable online database for the use of educators, scholars, and professionals. These tools will assist designers and creative professionals to contribute more confidently to the discourses of business and economics, and establish a common language for artists, editors, and educators in building financial literacy and understanding. We have started a dialog with The VFL to learn from their experience.

We intend to further examine the need, viability and implementation methodology for creating a common visual language for personal financial education in India. What are your thoughts? Would you like to participate? Do write to us with feedback and comments on

www.InvestorFirst.in

[email protected]

Developing a Common Visual Languagefor Personal Financial EducationDeven Shah, Consultant at NISM

8 December 2010NiSM

InvestorFirst.in is NISM’s initiative

to empower investors with

knowledge and tools to manage

their investments wisely.

5December 2010 NiSM

The SORM examination will be helpful for graduates or post graduates in commerce, economics, and management or in any other discipline who are aspiring to be a part of the securities industry and are keen on learning about the operational aspects of trading, clearing and settlement of trades, procedures to redress investor grievances, risk management etc.

The Securities and Operations Risk Management certification discusses the various products and participants in the securities market and the trade life cycle in its entirety including clearing and settlement of trades. The functioning of the front office, middle office and back office in a broking firm has also been discussed in detail. It also focuses on the various risk management requirements and practices; the procedures followed for redressing investor grievances; and arbitration mechanism followed in the securities industry. The securities broking industry also provides other financial services to customers, such as depository services, portfolio management etc. As a part of this certification, candidates are also required to have knowledge of these other services provided by the broking fraternity.

Benefits:The certification in Securities Operations and Risk Management will prepare the candidates to:Learn about the Indian securities market; the products being traded, the different players in the market.Understand the regulatory framework in which the securities market functions.Better understand the activities having a bearing on the operational risk.Understand the procedural aspects for redressing investor grievances.

Who should take the examination?SEBI has mandated the NISM Series VII Certification Examination for the following category of associated persons i.e., persons associated with a registered Stock Broker /Trading Member / Clearing Member in recognized stock exchanges, who are involved in, or deal with, any of the following, namely:Assets or funds of investors or clientsRedressal of investor grievancesInternal control or risk management, and Activities having a bearing on operational risk.

This examination will also help Graduates/Post Graduates looking for a career in the securities industry.

How do you register for the examination?A candidate interested in taking the NISM Securities Operations and Risk Management examination may do so by registering themselves through the three different test administrators appointed by NISM viz. NSE, BSE and MCX-SX.

To find out more please visit our website www.nism.ac.in

Page 6: Nism Update December 2010

he process of “clearing” involves post-trade T operations that include trade matching, confirmation and clearances, and risk-management activities such as, netting, collateralization and procedures that mitigate or eliminate some forms of credit risk. Although the risk management activities of the clearing process are essential to both the stock and derivative markets, this article focuses on the derivative market which has come to the forefront of policy debate particularly in the aftermath of the financial crisis of 2007-2008.

Derivatives contracts are agreements to makePayments or buy/sell something at some time in the future period, where the period could range from a few days to many years based on the value of the underlying asset or index in case of futures/forwards and, in the case of options, the decision of one of the counterparties. Typically, one of the primary risks associated with a derivative contract is the counterparty risk, i.e. the risk of one counterparty failing to honor its obligation and hence defaulting. If this risk is allowed to persist, it can lead to loss of confidence in the system and eventually the system can dwindle.

Clearing House and Counterparty Default Risk in Derivatives MarketDr. Poonam Mehra, Assistant Professor at NISM

6 December 2010NiSM 7December 2010 NiSM

Eliminating this uncertainty is the function of a clearing house which comes into play during the trade clearance stage of the clearing process. At this point the clearing house becomes an official “party to every trade,” substituting itself as a seller to every buyer and a buyer to every seller. In interposing itself this way, the clearing house legally assumes the obligation of guaranteeing the execution of each trade to other clearing members, should one of the clearing members default or fail. There are also two financial aspects to this risk management function of the clearing house. First of all, the clearing house attempts to reduce the risk that a clearing member will not be able to honor its commitments by setting capital requirements, position limits, and other financial standards for members, collecting margin payments on open positions and continuously monitoring the financial strength and portfolio positions taken by member firms. Second, the clearing house makes provisions for fulfilling its guarantee by envisaging a guarantee fund and sometimes by establishing rules permitting it to make an ex-post assessment of its solvent members to cover any defaults.

Normally the default risks insured by the clearing house, as discussed above, are idiosyncratic affecting relatively small subsets of traders. For mitigating such idiosyncratic risks, the effectiveness of clearing house is well established. However this risk could be systemic i.e. the risk could be that derivatives contracts can lead to failure of major financial institutions as seen during the financial crisis of 2007-08. While one school of thought argues that the systemic risks could be mitigated by provisioning mandatory clearing of all derivative contracts through the clearing house, there is another school of thought which is skeptical about the effectiveness of the clearing house against systemic risk. This latter school argues that the ability of the clearing house in handling systemic risk is adversely affected by information related problems, particularly moral hazards and adverse selection. Whether the clearing house with its current mechanisms would be able to match up against systemic risk or it would need to equip itself better in handling the information problems is going to be a top agenda in the policy debate as the world gears itself up against potential financial turmoil!

Page 7: Nism Update December 2010

he process of “clearing” involves post-trade T operations that include trade matching, confirmation and clearances, and risk-management activities such as, netting, collateralization and procedures that mitigate or eliminate some forms of credit risk. Although the risk management activities of the clearing process are essential to both the stock and derivative markets, this article focuses on the derivative market which has come to the forefront of policy debate particularly in the aftermath of the financial crisis of 2007-2008.

Derivatives contracts are agreements to makePayments or buy/sell something at some time in the future period, where the period could range from a few days to many years based on the value of the underlying asset or index in case of futures/forwards and, in the case of options, the decision of one of the counterparties. Typically, one of the primary risks associated with a derivative contract is the counterparty risk, i.e. the risk of one counterparty failing to honor its obligation and hence defaulting. If this risk is allowed to persist, it can lead to loss of confidence in the system and eventually the system can dwindle.

Clearing House and Counterparty Default Risk in Derivatives MarketDr. Poonam Mehra, Assistant Professor at NISM

6 December 2010NiSM 7December 2010 NiSM

Eliminating this uncertainty is the function of a clearing house which comes into play during the trade clearance stage of the clearing process. At this point the clearing house becomes an official “party to every trade,” substituting itself as a seller to every buyer and a buyer to every seller. In interposing itself this way, the clearing house legally assumes the obligation of guaranteeing the execution of each trade to other clearing members, should one of the clearing members default or fail. There are also two financial aspects to this risk management function of the clearing house. First of all, the clearing house attempts to reduce the risk that a clearing member will not be able to honor its commitments by setting capital requirements, position limits, and other financial standards for members, collecting margin payments on open positions and continuously monitoring the financial strength and portfolio positions taken by member firms. Second, the clearing house makes provisions for fulfilling its guarantee by envisaging a guarantee fund and sometimes by establishing rules permitting it to make an ex-post assessment of its solvent members to cover any defaults.

Normally the default risks insured by the clearing house, as discussed above, are idiosyncratic affecting relatively small subsets of traders. For mitigating such idiosyncratic risks, the effectiveness of clearing house is well established. However this risk could be systemic i.e. the risk could be that derivatives contracts can lead to failure of major financial institutions as seen during the financial crisis of 2007-08. While one school of thought argues that the systemic risks could be mitigated by provisioning mandatory clearing of all derivative contracts through the clearing house, there is another school of thought which is skeptical about the effectiveness of the clearing house against systemic risk. This latter school argues that the ability of the clearing house in handling systemic risk is adversely affected by information related problems, particularly moral hazards and adverse selection. Whether the clearing house with its current mechanisms would be able to match up against systemic risk or it would need to equip itself better in handling the information problems is going to be a top agenda in the policy debate as the world gears itself up against potential financial turmoil!

Page 8: Nism Update December 2010

n the process of creating content for various I investor education and financial literacy initiatives, we talk to many individual investors and the two points that are almost always part of the discussion are:

1. Lot of confusion prevailing today because of i n f o r m a t i o n o v e r l o a d a n d d i f f e r e n t people/entities presenting content that’s often inconsistent or contradictory.

2. Very few people have the time, inclination and ability to read large volume of text matter to learn about personal finance and investing.

These insights tell us that we need a neutral and trusted body to bring in some amount of standardization in the base content for personal financial education and make it available to public at large. There is also a need to introduce innovative visual formats for customizing the content based on the target audience and delivery mediums.

Creation of a common visual language for personal financial education can be a good solution. This would involve bringing together professionals from various domains including educators, instructional designers, graphic artists, copywriters, journalists, and financial practitioners etc. to create a common base language for financial education which can then be used by as many people/entities as feasible. This would reduce duplication of effort in creating content and tackle the problem of inconsistency.

O n o u r i n v e s t o r e d u c a t i o n w e b s i t e we have experimented with a

visual style for explaining a few financial concepts and have received a highly positive feedback.

We did some further research on this subject and came across The Visualizing Finance Lab (VFL) - a working group of researchers, artists, and educators affiliated with Parsons the New School for Design and the The New School who are interested in the intersection of finance, education and design. The VFL explores the ways in which complex financial situations and dynamics can be explained through visual, metaphorical and narrative representations. The lab's initial goal is to develop a vocabulary for describing illustrations and other visualizations of the recent financial crisis, and creating a searchable online database for the use of educators, scholars, and professionals. These tools will assist designers and creative professionals to contribute more confidently to the discourses of business and economics, and establish a common language for artists, editors, and educators in building financial literacy and understanding. We have started a dialog with The VFL to learn from their experience.

We intend to further examine the need, viability and implementation methodology for creating a common visual language for personal financial education in India. What are your thoughts? Would you like to participate? Do write to us with feedback and comments on

www.InvestorFirst.in

[email protected]

Developing a Common Visual Languagefor Personal Financial EducationDeven Shah, Consultant at NISM

8 December 2010NiSM

InvestorFirst.in is NISM’s initiative

to empower investors with

knowledge and tools to manage

their investments wisely.

5December 2010 NiSM

The SORM examination will be helpful for graduates or post graduates in commerce, economics, and management or in any other discipline who are aspiring to be a part of the securities industry and are keen on learning about the operational aspects of trading, clearing and settlement of trades, procedures to redress investor grievances, risk management etc.

The Securities and Operations Risk Management certification discusses the various products and participants in the securities market and the trade life cycle in its entirety including clearing and settlement of trades. The functioning of the front office, middle office and back office in a broking firm has also been discussed in detail. It also focuses on the various risk management requirements and practices; the procedures followed for redressing investor grievances; and arbitration mechanism followed in the securities industry. The securities broking industry also provides other financial services to customers, such as depository services, portfolio management etc. As a part of this certification, candidates are also required to have knowledge of these other services provided by the broking fraternity.

Benefits:The certification in Securities Operations and Risk Management will prepare the candidates to:Learn about the Indian securities market; the products being traded, the different players in the market.Understand the regulatory framework in which the securities market functions.Better understand the activities having a bearing on the operational risk.Understand the procedural aspects for redressing investor grievances.

Who should take the examination?SEBI has mandated the NISM Series VII Certification Examination for the following category of associated persons i.e., persons associated with a registered Stock Broker /Trading Member / Clearing Member in recognized stock exchanges, who are involved in, or deal with, any of the following, namely:Assets or funds of investors or clientsRedressal of investor grievancesInternal control or risk management, and Activities having a bearing on operational risk.

This examination will also help Graduates/Post Graduates looking for a career in the securities industry.

How do you register for the examination?A candidate interested in taking the NISM Securities Operations and Risk Management examination may do so by registering themselves through the three different test administrators appointed by NISM viz. NSE, BSE and MCX-SX.

To find out more please visit our website www.nism.ac.in

Page 9: Nism Update December 2010

ISM has been established with the primary Nobjective of developing and implementing the Certification Framework for the Indian securities markets. This includes establishing knowledge benchmarks for various market functions, developing and implementing certification examinations and continuing professional education programs.

In order to bring in uniformity and a level playing field for all the professionals working in the securities industry, NISM has developed certification examinations focused on the different areas of this

Industry such as Currency Derivatives, Interest Rate Derivatives, Mutual Fund Advisors, Registrars and Transfer Agents to name a few.

Securities Operations and Risk Management (SORM) Certification Examination

The Securities Operations and Risk Management Certification Examination aims at building a cadre of professionals who would be skilled in understanding the operational aspects of the securities industry. This examination is a first of its kind in India.

Securities Operations and Risk ManagementCertification Examination Mitu Bhardwaj, Programme Manager at NISM

4 December 2010NiSM

SORM

RISKManagement

Clearing

Settlement

9December 2010 NiSM

Entry Load's removal in Mutual Funds and its implication on investors and advisors:

Here are some samples:

Why should an individual consider investing in equities markets:

Page 10: Nism Update December 2010

India Investment Management Conference What's Next after the Recovery?

Agenda – 7th January 2011

10 December 2010NiSM

8.30 a.m.

9.00 a.m.

9.40 a.m. Plenary Session I

Registration

Conference WelcomeMr. John Rogers, CFA, President and CEO, CFA Institute

Opening RemarksMr. Sunil B. Singhania, CFA, President, IAIP

Keynote Speech Mr. C. B. Bhave, Chairman,SEBI

Global Investment Strategy & OutlookMs. Abby Joseph Cohen, CFA, Senior InvestmentStrategist and President Global Markets Institute,Goldman Sachs

Q&A Session: Moderated by Mr. Uday KotakExecutive VC & MD, Kotak Mahindra Bank

7 January 2011

Grand Hyatt Mumbai Mumbai, India

CFA Institute Members, IAIP Members,

NISM Graduates (CFERM/CSMP

Program) Rate: INR 8,400

CFA Institute Candidates /

NISM Students Rate: INR 9,450

Non-member Rate: INR 10,500

7DATE

VENUE

FEES

Registration: [email protected] +91 22 66735100-06

10.40 a.m. Plenary Session II

11.40 a.m.

12.00 p.m. Plenary Session II (Continued)

1.00 p.m.

Valuation Inferno: Dante Meets DCF - Avoiding CommonMistakes in Valuation Analysis (Part 1)Prof. Aswath Damodaran, Professor of Finance, Leonard N. Stern School of Business,New York University

Refreshment Break

Valuation Inferno: Dante Meets DCF - Avoiding CommonMistakes in Valuation Analysis (Part 2)Prof. Aswath Damodaran, Professor of FinanceLeonard N. Stern School of Business, New York University

Q&A SessionModerated by Dr. K. M. Abraham, CFAWhole Time Member, SEBI

Lunch

3December 2010 NiSM

nd2 Round Table Conferenceon Direct Tax Code“Implications for Securities Markets: Investors, Issuers and Intermediaries”

With the aim of providing a platform for various stakeholders in securities markets to discuss various issues and concerns related to the revised Direct Tax Code, NISM organized Direct Tax Code- Second Round Table Conference on December 20, 2010 at Hotel Taj Land's End, Bandra (E), Mumbai. Mr. C.K.G. Nair, Director - Capital Markets, Ministry of Finance inaugurated the conference.

In his inaugural speech, Mr. C.K.G Nair emphasized on the importance of Direct Tax Code in the emerging India, the aim with which it was drafted and also the significance of feedback received from the participants. Mr. Nair also mentioned the major areas where the bill has been revised on flexibility of corporate tax, reintroduction of difference between long term and short term capital gains tax, securities transaction tax and minimum alternate tax. Leading Tax experts like Mr. Ketan Dalal, Mr. Kanu Doshi and Mr. Percy Chhapgar addressed the above areas and their impact on securities markets. 30 representatives from various financial intermediaries participated in the conference. The conference concluded with remarks from Mr. Nair followed by a high tea.

Monday, December 20, 2010, Mumbai

Page 11: Nism Update December 2010

NISM UPDATE Team

2 December 2010

In November 2010, NISM launched a first of its kind, mandatory certification examination titled: Securities Operations and Risk Management (SORM)

Certification Examination. It covers the operational aspects of securities markets which include trading, clearing and settlement, redressal of investor grievances, risk management etc. In this Issue of NISM Update we share with you more details of this certification examination.

Also read about:• Clearing houses and counterparty default risk in derivatives market• Developing a common visual language for personal financial education

Post-event round-up:nd

• 2 Roundtable Conference on Direct Tax Code: “Implications for Securities Markets: Investors, Issuers and Intermediaries” on Monday, December 20th 2010

Upcoming events:• India Investment Management Conference in association with CFA Institute

thand IAIP on Friday, Jan 7 2011• Workshop for Trustees of Mutual Funds and Independent Directors of AMC

thon Tuesday, January 11 2011

For our first big event in 2011, the India Investment Management Conference, we are glad to have a line-up of world class experts who will share their insight on global investment strategy and contemporary valuation methods, followed by domestic gurus discussing the latest trends in performance reporting and disclosure, fixed income and alternative investments, and investment outlook in India. We hope to meet some of our readers at the event

We trust you had a wonderful Christmas and wish you a very happy new year.

NATIONAL INSTITUTE OF SECURITIES MARKETSNISM Bhavan, Plot No. 82, Sector - 17, Vashi, Navi Mumbai - 400 705 Phone: +91- 022-66735100-106 | Fax: 022-66735110www.nism.ac.inNiSM

NiSM

Foreword

4.00 p.m.

4.45 p.m.

Refreshment Break

Power Panel – India Investment OutlookPanel Moderator:Dr. Venkatraman Anantha-NageswaranChief Investment Officer, Bank Julius Baer

Panelists:Mr. Vallabh Bhansali Chairman, ENAM Securities Ltd.Mr. Madhusudan KelaChief Investment Strategist, Reliance CapitalMr. Akash PrakashDirector & CEO, Amansa Capital Pte. Ltd.

5.45 p.m.

Closing Remarks

Vote of Thanks

End of Conference

Prof. G. SethuOSD In-charge, NISM

Mr. Vidhu Shekhar, CFAVice President, IAIP

11December 2010 NiSM

st1 Concurrent sessions“Reporting and Disclosure”

Performance Measurement and Reporting

Panel Moderator:Mr. Trevor PersaudDirector, Head of Investment Risk Oversightand Performance Analysis, Prudential Asset Management (Singapore) Ltd

Panelists:Mr. Aditya AgarwalManaging Director, Morningstar IndiaMs. Fannie Fang, CFA, CIPMDirector, Global Investment Performance standards, CFA InstituteMs. Ashu SuyashManaging Director and Country Head, FIL Fund ManagementMr. K. N. Vaidyanathan Executive Director, SEBI

IFRS update

Panel Moderator:Mr. Suresh MahadevanManaging Director, UBS Investments, Mumbai

Panelists:Mr. K Balachandran Co-Founder and Director, IRIS Business Services LimitedMr. Jamil Khatri Executive Director, Accounting Advisory Services, KPMGMr. Makarand Paladkar

2.00 p.m.

3.00 p.m.

nd2 Concurrent sessions“Fixed Income & Alternative Assets”

Fixed Income

Panel Moderator:Mr. Jayesh MehtaManaging Director and Treasurer, Bank ofAmerica

Panelists: Mr. Anjan BaruaDeputy Managing Director & Group Executive (Global Markets), State Bank of India Dr. H. K. Pradhan Professor of Finance & Economics,

XLRI Jamshedpur Mr. Nilesh ShahDeputy Managing Director, ICICI Prudential

Asset Management Company Limited Mr. Naresh TakkarManaging Director, ICRA Ltd.

Private Equity, Venture Capital & Real Estate

Panel Moderator:Mr. Vikram UtamsinghHead, Markets and Private Equity Advisory, KPMG

Panelists:Mr. Rajeev GuptaMD, Carlyle India Advisors Private LimitedMr. Satish MandhanaManaging Director, IDFC Private EquityMr. S. Sriniwasan

2.00 p.m.

3.00 p.m.

Break-Out Sessions (Two tracks)

Page 12: Nism Update December 2010

INSIDE:India Investment

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Agenda

Clearing House and Counterparty Default Riskin Derivatives Market

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Developing a Common Visual Language for Personal Financial Education

Volume 3 / Issue 5

Certification for Securities Operations and Risk Management

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Workshop for Trustees of Mutual Funds and Independent Directors of Asset Management CompaniesTuesday, January 11, 2011, Mumbai

he next in the series of workshops that NISM conducts for Trustees and TIndependent Directors is scheduled on January 11, 2011. The two key sessions that will be covered in this workshop are:

1.Risks and Rewards in DerivativesDr. Sayee Srinivasan, Head - Product Strategy, Bombay Stock Exchange

2.Operational Risk and Fund Financial StatementsShri Sanjay Panse, Partner, S. Panse & Company

Senior professionals from SEBI and NISM will also be present at the event to interact with the participants.

We will also be launching an online discussion forum for Trustees and Independent Directors. This will make sharing of views, documents, easier and faster. On this forum we will also upload presentations and videos of past workshops for reference.

A sample screen of the online forum.

12 December 2010NiSM