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8. Knowledge Initiatives
Several initiatives have been taken over the last few years with a view to developing the skills of market intermediaries, educating the investors, and promoting high quality research in the securities market.
Quality Intermediation
In some of the developed and developing markets, there is a system of testing and certification for persons joining the market intermediaries. This ensures that these personnel have the minimum required knowledge about the market and the existing regulations. The benefits of this system are widespread. While the intermediaries are assured of qualified staff, the employees get an opportunity to improve their career prospects. This, in turn, instills confidence in the investors of being associated with the securities market. The formal educational or training program on the securities markets is not adequate to cover their areas of operations. For instance, no academic course teaches how to maintain depository accounts or how to sell mutual fund products, issue contract notes, or clear and settle trades on a stock exchange. As a result, the need for a certification was being increasingly felt by the regulators as well as by the securities industry.
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Table 8-1: NCFM Module Test Details Sr. No. Name of Module Fees (Rs.) Test No. of Maximum Pass Certicate Duration Questions Marks Marks Validity (in (%) minutes) 120 60 100 50 5 120 60 100 50 5 120 60 100 50 5 120 60 100 50 5 120 60 100 50 5 120 60 100 50 5 105 60 100 60 5 105 60 100 50 5 120 60 100 60 3 120 60 100 60 5 120 60 100 60 5 120 60 100 60 5 120 60 100 60 5 120 60 100 60 5 120 60 100 60 5 120 60 100 60 5 120 60 100 60 3 120 120 120 120 120 120 120 75 120 120 90 120 120 120 120 120 120 100 100 100 100 100 100 80 60 60 50 100 60 60 90 90 60 75 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 140 50 50 60 50 60 50 60 60 # 50 60 60 60 60 60 60 60 60 3 3 3 3 3 3 3 5 3 5 5 5 5 2 5 NA
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Financial Markets: A Beginners Module * Mutual Funds : A Beginners' Module Currency Derivatives: A Beginners Module Equity Derivatives: A Beginners Module Interest Rate Derivatives: A Beginners Module Commercial Banking in India: A Beginners Module Securities Market (Basic) Module Capital Market (Dealers) Module * Derivatives Market (Dealers) Module * FIMMDA-NSE Debt Market (Basic) Module Investment Analysis and Portfolio Management Module Fundamental Analysis Module Securities Market (Advanced) Module Banking Sector Module Insurance Module Macroeconomics for Financial Markets Module NISM-Series-I: Currency Derivatives Certication Examination NISM-Series-II-A: Registrars to an Issue and Share Transfer Agents Corporate Certication Examination NISM-Series-II-B: Registrars to an Issue and Share Transfer Agents Mutual Fund Certication Examination NISM-Series-IV: Interest Rate Derivatives Certication Examination NISM-Series-V-A: Mutual Fund Distributors Certication Examination * NISM-Series-VI: Depository Operations Certication Examination NISM Series VII: Securities Operations and Risk Management Certication Examination Certied Personal Financial Advisor (CPFA) Examination NSDLDepository Operations Module Commodities Market Module Surveillance in Stock Exchanges Module Corporate Governance Module Compliance Ofcers (Brokers) Module Compliance Ofcers (Corporates) Module Information Security Auditors Module (Part-1) Information Security Auditors Module (Part-2) Options Trading Strategies Module FPSB India Exam 1 to 4**
1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1000 1000 1000 1000 1000 1000 1000 4000 1500 1800 1500 1500 1500 1500 2250 2250 1500 2000 per exam 5000 1500 1500 1500 1000
34 35 36 37 38
Examination 5/Advanced Financial Planning ** Equity Research Module ## Issue Management Module ## Market Risk Module ## Financial Modeling Module ###
30 65 80 50 50
50 55 55 55 50
NA 2 2 2 NA
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Candidates have the option to take the tests in English, Gujarati or Hindi languages. Candidates securing 80% or more marks in NSDL-Depository Operations Module ONLY will be certied as Trainers. Following are the modules of Financial Planning Standards Board India (Certied Financial Planner Certication) FPSB India Exam 1 to 4 i.e. (i) Risk Analysis & Insurance Planning (ii) Retirement Planning & Employee Benets (iii) Investment Planning and (iv) Tax Planning & Estate Planning Examination 5/Advanced Financial Planning ## Modules of Finitiatives Learning India Pvt. Ltd. (FLIP) ### Module of IMS Proschool The curriculum for each of the modules (except Modules of Financial Planning Standards Board India, Finitiatives Learning India Pvt. Ltd. and IMS Proschool) is available on our website: www.nseindia.com > Education > Certications.
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the NSE Certified Capital Market Professional (NCCMP) since August 2009, in the campuses of the respective colleges/ institutes. The aim of the NCCMP program is to develop skills and competency in the securities markets. It is a 100hour program, spanning 46 months, and covering theoretical and practical training in various subjects related to the capital markets. Successful candidates are awarded a joint certification from the NSE and the concerned college. The NCCMP covers an array of subjects pertaining to the capital markets, such as equity markets, debt markets, derivatives, macroeconomics, technical analysis, and fundamental analysis.
Research Initiatives
Knowledge management is very important in todays competitive world. It acts as a tool that helps to acquire the cutting edge in a globalized financial market. The regulators and SROs have been actively encouraging academicians and market participants to carry out research on the various segments of the securities markets. The objective of this initiative is to foster research, which can support and enable: stock exchanges to better design market micro-structure; participants to frame their strategies in the market place; regulators to frame regulations; policy makers to formulate policies; and researchers to expand the horizon of knowledge.
In 2011, three research papers were completed under the NSE Research Initiative. The complete papers are available on the NSE Website; the non-technical abstracts of these papers are included here. 1. Imbalances Created because of Structured Products in Indian Equity Markets
Mr. GopiKrishna Suvanam and Mr. Amit Trivedi This paper studies the effect of hedging of structured products on exchange-traded equity products. We look at various aspects of the structured product markets including the motivation to buy, the risks of the products, the hedging behaviour, and the effect of hedging on exchange-traded products. We conclude that hedging would be volatility supportive in a sell-off, and would be volatility suppressing in a significant rally. We also suggest the introduction of some new exchange products that would make the hedging process easy, and would also help some retail investors express their view in a better manner without the transaction costs involved in structured products. 2. Some Preliminary Examinations of the Predictive Ability of India VIX
Dr. Debasis Bagchi Earlier studies established a positive relationship between the volatility index (VIX) and the stock index returns. These studies were mainly restricted to developed markets and similar research in emerging markets is scarce. We intend to fill this gap, and in the process, extend our study for examining the direct and the cross-sectional relationship of India
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VIX with three important parameters, viz., stock beta, market-to-book value of equity, and market capitalization. Using multiple regression analysis, we find that India VIX has a positive and significant relationship with the returns of the value-weighted portfolios sorted on the basis of beta, market-to-book value of equity, and market capitalization. We further examine the behaviour of India VIX with market-to-book value of equity and market capitalization as controlling variables, and document that India VIX yields a positive and significant relationship with the portfolio returns in these cases also. These results suggest that India VIX is a distinct risk factor, capable of predicting the pricing mechanism of the market. 3. Market Integration and Efciency of Indian Stock Markets: A Study of NSE
Dr. Prashant Joshi The study attempts to explore the dynamics of the comovement of the stock markets of the USA, Brazil, Mexico, China, and India during the period January, 1996 to July, 2007 using daily closing price data. It attempts to analyze the speed of adjustment coefficients using daily, weekly, and monthly data. It also tries to examine the efficiency of the stock market as a result of the initiatives and regulatory measures taken by the NSE and the SEBI, respectively. The long-term relationships among the markets are analyzed using the Johansen and Juselius multivariate cointegration approach. The short-run dynamics are captured through vector error correction models. The analysis reveals evidence of cointegration among the markets, demonstrating that the stock prices in the countries considered in this study share a common trend. The results reveal that the speed of adjustment of the Indian stock market is higher than that of the other global stock markets. The analysis of the speed of adjustment coefficient reveals that significant underreactions and overreactions along with full adjustment are observed at both shorter as well as longer differencing intervals during the first period (1996 2001) using daily data, while the second period (20022007) indicates significant overreactions with higher speed of adjustment coefficient. The results of the event methodology reveal that the stock market have become efficient at information processing in recent times with regard to some of the regulatory measures taken by the SEBI.
Data Dissemination
The National Stock Exchange (NSE) compiles, maintains ,and disseminates high quality data to market participants, researchers, and policy-makers. This acts as valuable input for formulating strategies, doing research, and making policies. The data and info-vending services of the NSE are provided through DotEx International Limited (DotEx), which is a separate professional set-up dedicated for this purpose. The DotEx provides the NSEs market quotes and the data for the various market segments. The DotEx currently provides the following five products: (i) NSEs online Real Time Data Feed, which is high-speed streaming data providing stock exchange trade quotations and other related information pertaining to the trading on the capital market, the wholesale debt market, the futures and options segments, the securities lending and borrowing market, and the currency derivatives market segment of the NSE (NSEs real time data is provided in three levelslevel 1, level 2, and tick by tick); (ii) NSEs 5-minute, 2-minute, and 1-minute Snapshot Data Feed, which contains data pertaining to stock exchange trade quotations and other related information pertaining to the trading on the various market segments of the NSE; (iii) NSEs End of Day data, which contains the End of Day bhavcopy information along with the security and trade details pertaining to the capital market, the wholesale debt market, and the futures and options segments of the NSE; (iv) Historical Data (provided on DVDs/CDs), which is available for the capital market segment, the futures and options segments, and the wholesale debt market segment, and contains (a) daywise bhavcopy for each trading day, (b) the circulars issued by the NSE or the NSCCL during the month, (c) the masters containing information such as symbols, series, ISINs, etc., (d) the snapshots of the limit order book at four time points in the day, and (e) trades data containing the details about every trade that took place; and (v) Corporate Data, which contains data pertaining to company fundamentals, corporate announcements, and shareholding patterns.
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