NISM UPDATE. Professionalizing the Indian Securities Industry OCTOBER 2010

Transcription

1 INSIDE: NISM's Management Development Programmes NISM Management Development Programs (MDP) Customised Training Programs for Companies NISM School of Securities Education (SSE) offers short-duration programmes of 1 to 5 days duration on various topics for meeting the in-house training requirements of corporates at their respective premises. Some of the important topics where training programmes are available include: 1. IFRS for Analysts 2. Financial Planning & Wealth Management 3. Financial Statement Analysis 4. Forensic Accounting 5. Securities Analysis 6. Portfolio Management 7. Mergers & Acquisitions 8. Financial Derivatives 9. Risk Management 10. Behavioural Finance UPDATE OCTOBER 2010 Volume 3 / Issue 3 ATION CERTIFIC The above represents an indicative list. Customization is possible, depending upon the specific needs of each organization. Interested organization may send in their enquiries to Prof. Sunder Ram Korivi on sunder.korivi@nism.ac.in or dial NISM conducts customized programme on IFRS for Kotak Mahindra AMC NISM conducted a Management Development Programme titled IFRS for Analysts customized to meet the training requirements of Kotak Mahindra Asset Management Company. The objective of the programme was to provide a perspective and technical insights into the form and content of financial statements which would be prepared based on IFRS standards with effect from April 1, A team of 24 officers, including the senior analysts and fund managers, were nominated for the programme. 8 The first half of the two day programme was conducted on 9th at the Kotak training facility in Mumbai. Mr Rehan Farias and Mr Alroy Lobo of Kotak Mahindra AMC gave the opening remarks. Dr Sunder Ram Korivi, Professor, NISM has provided the perspective about IFRS. Deloitte, the Collaborating Partner with NISM, was represented by CA Sekkizhar Balasubramanian (Director) and CA G K Subramaniam (Senior Manager). The two day programme covers the important aspects of IFRS like major differences between IFRS and Indian GAAP, key impact on various sectors like manufacturing and financial service, etc. The programme concluded with the final phase of training on October 23, Professionalizing the Indian Securities Industry India Investment Management Conference NISM conducts customized programme on IFRS for Kotak Mahindra AMC

2 Foreword I ndian securities markets have made impressive progress in the past fifteen years in terms of new products, improved market regulations, technology, access and efficiency. This has called for a cadre of securities markets intermediaries who can serve the investors and issuers professionally. The characteristics of a profession, among other things, include: (a) skill based on theoretical knowledge; (b) testing of competence; and (c) institutional training Given that the professionals in the securities industry deal with the assets of the investors directly or indirectly, it has become essential that the staff of intermediaries in the securities markets possess the requisite skill sets and conceptual understanding of the functions they discharge. Consequently, it becomes necessary that the competencies of the staff are tested and certified. Also, they need continuous professional education to stay updated with the latest developments. NISM has been working along these directions for over three years. In this Issue of NISM Update, we share some information about our efforts in launching certificate examinations and continuous professional education programmes. We also present a detailed story on the India Investment Management Conference coming up on January 7th, The eminent speakers include Mr. C. B. Bhave, Chairman, Securities and Exchange Board of India; Ms. Abby Joseph Cohen, Senior Investment Strategist and President, Global Markets Institute, Goldman Sachs; and Prof. Aswath Damodaran, Professor of Finance at Leonard N. Stern School of Business, New York University. We have also been conducting customized Management Development Programs to our corporate clients. Apart from the list of topics mentioned, we also create customized training programmes. If you have any specific training needs in the securities markets domain, NISM would be able to provide a tailor-made programme to cater to your needs. We hope that you find the NISM Update useful and informative. Please send your feedback and suggestions to editor@nism.ac.in Editorial Team NISM UPDATE NATIONAL INSTITUTE OF SECURITIES MARKETS NISM Bhavan, Plot No. 82, Sector - 17, Vashi, Navi Mumbai Phone: Fax:

3 ATION CERTIFIC India Investment Management Conference Professionalizing the Indian Securities Industry Mr. Paritosh Sharma (Adviser, NISM) What's Next after the Recovery? W hile the unusually uncertain economic outlook in the United States is causing investors to look to Asian markets for potentially higher returns, India features as a fast growing economy that may present attractive alternative investment opportunities. Foreign ownership of stocks and foreign holding of debts in India have peaked in recent times, indicating a strong capital inflow into the country. It is also predicted that by 2030 India will have the world s largest middle class population. At this conference, globally acclaimed experts will give 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. International high profile speakers include Mr. C. B. Bhave, Chairman, Securities and Exchange Board of India; Ms. Abby Joseph Cohen, Senior Investment Strategist and President, Global Markets Institute, Goldman Sachs; and Prof. Aswath Damodaran, 6 September 2010 Professor of Finance at Leonard N. Stern School of Business, New York University. It is a rare event where speakers of such caliber in one room will analyze and discuss what India means to global investors. A must-attend event if you want to stay ahead of the game. Limited seats available. Register Now: DATE 7 VENUE FEES 7 January 2011 Grand Hyatt Mumbai Mumbai, India CFA Institute Members, IAIP Members, NISM Graduates (FERM/CSMP program) Rate: INR 8,400 CFA Institute Candidates /NISM Students Rate: INR 9,450 Non-member Rate: INR 10,500 Register by 31 October, 2010 for a 20 percent discount. Registrations are open: apevents@cfainstitute.org The Need for Certification T he securities industry is a dynamic entity. Unprecedented and continuous changes take place in the available products and their features; market systems, processes and procedures; and rules and regulations governing the securities markets. These changes are driven by the need to make securities markets operationally efficient and fair to all participants, particularly to the investing public. The key drivers of change are the technological advances, financial innovations, crossborder transactions, regulatory imperatives, and private participation in economic development. Additionally, with increasing cross border financial flows across jurisdictions, there is a perceptible preference towards harmonization of securities industry practices globally. All these changes demand the development of a cadre of securities market professionals who are well-informed, competent, up-to-date and conversant with markets, products and global trends, are trustworthy, and able to swiftly adapt to changes. Most International Regulatory Jurisdictions mandate minimum education and certification requirements for securities market professionals. Today, securities industry professionals in India represent various shades of professional competence. In order to make the Indian securities industry a truly professional market place where investors and issuers can participate with a sense of confidence and comfort, it is necessary to upgrade the competency levels of all intermediaries. This can be achieved by evolving testing and certification requirements at the time of entry in the industry and Continuing Professional Education (CPE) throughout a professional s employment in the industry and making them a pre-requisite. 3

4 Professional sales people for the industry- Testing and Certification he investors' interface to the markets is through Tmarket intermediaries. It is important to create regulatory structures that include minimum knowledge criteria to professionalize this segment. A regulatory structure helps good professionals to clearly understand what it takes to enter the business of market intermediation. They also know and are comforted by the fact that everyone in the industry has to follow those standards and the principle of level playing field will prevail. Professionals already in the business also understand the qualification standards they need to maintain to continue to survive in the industry. A certification program including uniform entry level and continuing professional education requirements administered fairly across all participants establishes and improves professional standards among intermediaries that are critical to maintaining and raising investor confidence. Addressing the issue of making minimum competency levels a pre-requisite for all segments of the securities industry intermediaries is therefore a regulatory objective. Most International Regulatory Jurisdictions prescribe minimum education and certification requirements for securities market professionals. National Institute of Securities Markets- School for Certification of Intermediaries n keeping with the above objectives, the I Securities and Exchange Board of India (Certification of Associated Persons in the Securities Markets) Regulations, 2007 (Certification regulations) were notified in October In these regulations, SEBI has delegated responsibility for developing certification and continuing e d u cation re q u i re m e nts fo r intermediaries in the Indian capital markets to NISM. The NISM School for Certification of Intermediaries is focusing on implementing these objectives. With respect to certification examinations, NISM develops criterion referenced examinations using well established processes that meet international educational measurement standards. Criterion referenced tests are developed with the involvement of professionals having subject expertise, and are based on the competencies required for satisfactory, entry level performance on the job. The starting point of this process is a thorough job analysis from which the applicable competencies are derived. These in turn provide the basis for developing the test objectives, which explicitly state the ways in which the attainment of the competencies will be measured. The objectives lead directly to the creation of test questions and ultimately to the structure of the test itself. NISM has collaborated with leading international organizations to establish and to continuously improve and upgrade its examination development and administrative processes. These organizations include the US Financial Regulatory Authority (FINRA), the US securities market self regulatory organization and the CFA Institute among others. NISM is also in the process of establishing continuing professional education requirements for various intermediary segments and administering these programs for the industry. 4

5 NISM Certification Examinations NISM currently offers the following certification examinations: Currency Derivatives Certification Examination For persons working in the Currency Derivatives market segment, in order to enable a better understanding of currency markets and exchange traded currency future products, better quality investor service, operational process efficiency and risk controls Registrars to an Issue and Share Transfer Agents Corporate Registrars to an Issue and Share Transfer Agents Mutual Funds For persons working in Registrars to an Issue and Share Transfer Agents (R&T agent) organizations in the corporate and mutual fund R&T function, in order to enable better quality investor service, operational process efficiency and risk controls. Interest Rate Derivatives Certification Examination For persons working in the Interest Rate Derivatives market segment, in order to enable a better understanding of fixed income securities markets and interest rate derivative products, regulations and risks associated with the products and the exchange mechanisms of clearing and settlement. Mutual Fund Distributors Certification Examination For all persons involved in selling and distributing mutual funds including: Individual Mutual Fund Distributors Employees of organizations engaged in sales and distribution of Mutual Funds Employees of Asset Management Companies specially persons engaged in sales and distribution of Mutual Funds The certification aims to enhance the quality of sales, distribution and related support services in the mutual fund industry. NISM had also introduced a CPE program for Mutual Fund Distributors in June, Since then over 1800 candidates have cleared the NISM CPE program. No. of candidates enrolled for various NISM certification programs as on October 15, ,785 1,370 22, Mutual Fund Distributors RTA - Mutual Funds Currency Derivatives RTA - Corporate Interest Rate Derivatives 5

6 ATION CERTIFIC India Investment Management Conference Professionalizing the Indian Securities Industry Mr. Paritosh Sharma (Adviser, NISM) What's Next after the Recovery? W hile the unusually uncertain economic outlook in the United States is causing investors to look to Asian markets for potentially higher returns, India features as a fast growing economy that may present attractive alternative investment opportunities. Foreign ownership of stocks and foreign holding of debts in India have peaked in recent times, indicating a strong capital inflow into the country. It is also predicted that by 2030 India will have the world s largest middle class population. At this conference, globally acclaimed experts will give 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. International high profile speakers include Mr. C. B. Bhave, Chairman, Securities and Exchange Board of India; Ms. Abby Joseph Cohen, Senior Investment Strategist and President, Global Markets Institute, Goldman Sachs; and Prof. Aswath Damodaran, 6 September 2010 Professor of Finance at Leonard N. Stern School of Business, New York University. It is a rare event where speakers of such caliber in one room will analyze and discuss what India means to global investors. A must-attend event if you want to stay ahead of the game. Limited seats available. Register Now: DATE 7 VENUE FEES 7 January 2011 Grand Hyatt Mumbai Mumbai, India CFA Institute Members, IAIP Members, NISM Graduates (FERM/CSMP program) Rate: INR 8,400 CFA Institute Candidates /NISM Students Rate: INR 9,450 Non-member Rate: INR 10,500 Register by 31 October, 2010 for a 20 percent discount. Registrations are open: apevents@cfainstitute.org The Need for Certification T he securities industry is a dynamic entity. Unprecedented and continuous changes take place in the available products and their features; market systems, processes and procedures; and rules and regulations governing the securities markets. These changes are driven by the need to make securities markets operationally efficient and fair to all participants, particularly to the investing public. The key drivers of change are the technological advances, financial innovations, crossborder transactions, regulatory imperatives, and private participation in economic development. Additionally, with increasing cross border financial flows across jurisdictions, there is a perceptible preference towards harmonization of securities industry practices globally. All these changes demand the development of a cadre of securities market professionals who are well-informed, competent, up-to-date and conversant with markets, products and global trends, are trustworthy, and able to swiftly adapt to changes. Most International Regulatory Jurisdictions mandate minimum education and certification requirements for securities market professionals. Today, securities industry professionals in India represent various shades of professional competence. In order to make the Indian securities industry a truly professional market place where investors and issuers can participate with a sense of confidence and comfort, it is necessary to upgrade the competency levels of all intermediaries. This can be achieved by evolving testing and certification requirements at the time of entry in the industry and Continuing Professional Education (CPE) throughout a professional s employment in the industry and making them a pre-requisite. 3

7 th Agenda 7 January 2011 Keynote: Mr. C. B. Bhave, Securities and Exchange Board of India Our Partners Global Investment Strategy & Outlook: Ms. Abby Joseph Cohen, CFA, Goldman Sachs Moderator: Mr. Uday Kotak, Kotak Mahindra Bank Valuation Inferno: Dante Meets DCF Avoiding Common Mistakes in Valuation Analysis Prof. Aswath Damodaran, New York University Moderator: Dr. K. M. Abraham, Securities and Exchange Board of India Panel: Performance Measurement & Reporting Mr. K. N. Vaidyanathan, Securities and Exchange Board of India Mr. Milind Barve (invited) Moderator: Mr. Trevor Persaud, Prudential Asset Management (Singapore) Ltd Panel: IFRS Update Mr. Jayesh Gandhi (invited) Mr. Jamil Khatri, KPMG Ms. Usha Narayanan (invited), Securities and Exchange Board of India, Moderator: Mr. Tom Robinson, CFA, CFA Institute Panel: Fixed Income Mr. Anjan Barua (invited) Mr. Nilesh Shah, ICICI Prudential Asset Management Company Limited Moderator: Mr. Jayesh Mehta Panel: Real Estate, Venture Capital & Private Equity Mr. Kishore Gotely (invited), Government of Singapore Investment Corporation Mr. Rajeev Gupta, Carlyle India Advisors Private Limited Mr. Tuhin Parikh (invited), Blackstone Moderator: Ms. Jenny Blinch (invited), PEI Asia Power Panel: India Investment Outlook Mr. Vallabh Bhansali Mr. Madhusudan Kela Mr. Akash Prakash Moderator: Mr. Venkatraman Anantha-Nageswaran, Bank Julius Baer September

8 INSIDE: NISM's Management Development Programmes NISM Management Development Programs (MDP) Customised Training Programs for Companies NISM School of Securities Education (SSE) offers short-duration programmes of 1 to 5 days duration on various topics for meeting the in-house training requirements of corporates at their respective premises. Some of the important topics where training programmes are available include: 1. IFRS for Analysts 2. Financial Planning & Wealth Management 3. Financial Statement Analysis 4. Forensic Accounting 5. Securities Analysis 6. Portfolio Management 7. Mergers & Acquisitions 8. Financial Derivatives 9. Risk Management 10. Behavioural Finance UPDATE OCTOBER 2010 Volume 3 / Issue 3 ATION CERTIFIC The above represents an indicative list. Customization is possible, depending upon the specific needs of each organization. Interested organization may send in their enquiries to Prof. Sunder Ram Korivi on sunder.korivi@nism.ac.in or dial NISM conducts customized programme on IFRS for Kotak Mahindra AMC NISM conducted a Management Development Programme titled IFRS for Analysts customized to meet the training requirements of Kotak Mahindra Asset Management Company. The objective of the programme was to provide a perspective and technical insights into the form and content of financial statements which would be prepared based on IFRS standards with effect from April 1, A team of 24 officers, including the senior analysts and fund managers, were nominated for the programme. 8 The first half of the two day programme was conducted on 9th at the Kotak training facility in Mumbai. Mr Rehan Farias and Mr Alroy Lobo of Kotak Mahindra AMC gave the opening remarks. Dr Sunder Ram Korivi, Professor, NISM has provided the perspective about IFRS. Deloitte, the Collaborating Partner with NISM, was represented by CA Sekkizhar Balasubramanian (Director) and CA G K Subramaniam (Senior Manager). The two day programme covers the important aspects of IFRS like major differences between IFRS and Indian GAAP, key impact on various sectors like manufacturing and financial service, etc. The programme concluded with the final phase of training on October 23, Professionalizing the Indian Securities Industry India Investment Management Conference NISM conducts customized programme on IFRS for Kotak Mahindra AMC