NISM Certification on Securities Operations and Risk Management

Workbook

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION TO THE SECURITIES MARKET ................................................................................. 9
1.1 INTRODUCTION ............................................................................................................................................ 9
1.2 SECURITIES MARKET ................................................................................................................................... 10
1.3 MONEY MARKET ....................................................................................................................................... 12
1.4 PRODUCTS TRADED IN THE INDIAN SECURITIES MARKET ..................................................................................... 14
1.5 INTERNATIONAL FINANCIAL SERVICES CENTRES (IFSC) ....................................................................................... 23
CHAPTER 2: MARKET PARTICIPANTS IN THE SECURITIES MARKET ................................................................... 26
2.1 INTRODUCTION .......................................................................................................................................... 26
2.2 INVESTORS ................................................................................................................................................ 26
2.3 ISSUERS .................................................................................................................................................... 29
2.4 MARKET STRUCTURE AND PARTICIPANTS ........................................................................................................ 31
2.5 REGULATORS ............................................................................................................................................. 39
CHAPTER 3: INTRODUCTION TO SECURITIES BROKING OPERATIONS ............................................................... 58
3.1 INTRODUCTION TO THE SECURITIES TRADE LIFE CYCLE ....................................................................................... 58
3.2 FRONT OFFICE OPERATIONS ......................................................................................................................... 65
3.3 MIDDLE OFFICE OPERATIONS ....................................................................................................................... 85
3.4 BACK OFFICE OPERATIONS ........................................................................................................................... 88
CHAPTER 4: RISK MANAGEMENT .................................................................................................................... 103
4.1 RISK MANAGEMENT ................................................................................................................................. 103
4.2 COMPLIANCES AND REGULATORY REPORTING ................................................................................................ 136
4.3 CORE SETTLEMENT GUARANTEE FUND ......................................................................................................... 145
CHAPTER 5: CLEARING PROCESS ..................................................................................................................... 151
5.1 INTRODUCTION ........................................................................................................................................ 151
5.2 ROLE OF THE CLEARING CORPORATION ......................................................................................................... 151
5.3 CLEARING BANKS AND THEIR FUNCTION ........................................................................................................ 154
5.4 CLEARING MEMBERS AND CUSTODIANS......................................................................................................... 155
5.5 DEPOSITORIES & DEPOSITORY PARTICIPANTS ................................................................................................. 156
5.6 CLEARING PROCESS................................................................................................................................... 158
CHAPTER 6: SETTLEMENT PROCESS ................................................................................................................ 167
6.1 INTRODUCTION ........................................................................................................................................ 167
6.2 DETERMINATION OF SETTLEMENT OBLIGATIONS .............................................................................................. 168
6.3 SETTLEMENT OF FUNDS ............................................................................................................................. 171
6.4 SETTLEMENT OF SECURITIES........................................................................................................................ 174
6.5 AUCTION OF SECURITIES ............................................................................................................................ 174
6.6 CORPORATE ACTIONS ADJUSTMENT ............................................................................................................. 176
CHAPTER 7: INVESTOR GRIEVANCES AND ARBITRATION ................................................................................ 182
7.1 INTRODUCTION ........................................................................................................................................ 182
7.2 INVESTOR GRIEVANCE ............................................................................................................................... 182
7.3 ONLINE RESOLUTION OF DISPUTES IN THE INDIAN SECURITIES MARKET ............................................................... 188
7.4 INVESTOR PROTECTION FUND ..................................................................................................................... 197
CHAPTER 8: OTHER SERVICES PROVIDED BY BROKERS ................................................................................... 201
8.1 INTRODUCTION ......................................................................................................................................... 201
8.2 IPO APPLICATIONS ................................................................................................................................... 202
8.3 TRADING OF MUTUAL FUND UNITS.............................................................................................................. 203
8.4 PORTFOLIO MANAGEMENT SERVICE ............................................................................................................ 205
8.5 RESEARCH REPORTS ................................................................................................................................. 210

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 NISM Certification on Securities Operations and Risk Management
Workbook

8.6 DEPOSITORY SERVICES ............................................................................................................................... 210