Stock Market Operations

Course Overview

This course provides delegates with a solid introduction to the operational role of today’s major Stock Exchanges in the global capital markets.

It highlights the major asset classes that are traded on these Exchanges and how the trading is managed and regulated. Also, the role of Custodians, Clearing and Settlement Houses within these markets and how they interact with Stock Exchanges around the world is analysed.

During the course, real examples from all the major Exchanges are highlighted.

Course Content

The Global Capital Markets

• What is a ‘financial market place’
• Historical development of today’s global financial market
• The role of the financial media
• Structure of the major capital markets:
  • Exchanges, Clearers, Regulators
  • The modern day surge in global investment
  • The different types of ‘Stock Exchanges’
  • Where Stock Exchanges fit in today’s markets
  • US, European, Middle Eastern and Asian Stock Exchanges

The Different Asset Classes and Their Markets

• What is traded on Stock Exchanges today?
• Equities – Common and Preferred
• Bonds – Corporate and Government
• Bonds – Fixed, Floating and Zero coupon, the Yield Curve
• Money Market instruments
• The currency markets
• Why do investors buy them, and what makes them sell?
• Income/Capital Gain
• The relationships between the various asset classes
• How Exchange traded and Over-The-Counter markets interrelate

The Different Types of Stock Exchange investor

• Investors
• Fund managers
• Hedge funds
• Stock Exchange participants
• Investment banks, Stockbrokers, Hedge Funds and Prime Brokers
• Intra-market relationships – the buy and sell side of the industry

The Role of the Stock Exchange

• Where are these products traded?
• The importance of the OTC market
• The past development of Stock Exchanges
• The main Stock Exchanges in today’s markets
• US, European and Asian Markets and their differing architecture
• Asset classes traded on different Stock Exchanges around the world
• The major Primary and Secondary markets
• New York, Euronext, London, Shanghai, Hong Kong
• The attraction of “listed” companies to investors
• Using Stock Exchanges to pool liquidity and raise capital
• Methods of Capital Raising
• ‘Floating’ the company – different methods

Case studies of recent IPOs and Bond Issues

• Trading on Stock Exchanges
• Order Driven Trading

Example: The London Stock Exchange International Order Book trading system

• Price formation – unwinding the order book
• Different types of orders – Limit, At Best, Limit, Iceberg
• Quote Driven Trading
• Exchange trading services
• Indices, their constituents and their importance
• Financial Crime
• Insider trading and Market Manipulation
• Keeping an orderly market
• Regulating the participants – member firms and listed companies
• Market Surveillance and Intelligence  – watching trading activity
• Short selling
• Stock Borrowing and Lending
• Chinese Walls
• Take over’s and mergers – politics and intrigue               

Clearing & Settlement

• Settlement and settlement risk
• The different Settlement Conventions in the major markets
• Equities, Bonds and derivatives
• The process for Derivatives Clearing
• The Central Counterparty (CCP)
• CCP services provided to Stock Exchanges
• Margin
• The security trade settlement process
• Pre-settlement
• Settlement
• Potential problems – unmatched trades, delayed settlement, bad delivery
• Stock Exchange Settlement Discipline
• The ‘life cycle of a trade’  – how the process links up from trade to settlement
• The role of International Central Securities Depositories (ICSDs) and Central Securities Depositories (CSDs) – LCH.Clearnet, Euroclear,Crest, Clearstream International, the DTC

Custody

• The role of Custodians in the Stock markets
• Settlement and safe keeping
• Income collection and Corporate Actions
• Cash management and funding transactions
• Additional services
• Accounting
• Stock Lending and collateral management
• Trustee services
• Valuation reports

Future Issues and Trends for Investors and Markets

• Global Regulation in the post-crisis world
• The role of new Stock Markets – Asia and the Middle East
• Real time trading, Dark Pools and new liquidity
• Real Time Gross Settlement and Straight Through Processing
• Global Stock Exchange alliances and mergers

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.