ICWA :: Final
Paper 11 : Capital Market Analysis & Corporate Laws
[One paper: Three Hours – 100 marks]
Objective . . .
| • | To know application of the various regulations for financial and capital markets |
| • | |
| • | To gain basic knowledge on Corporate Governance Principles and purpose of good corporate governance |
A. Capital Market Analysis ( 50 Marks)
| 1. | Introduction of Capital Market & Capital Market Instruments | 10% |
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| • | Capital Market / Security Market |
| • | Primary Market / New Issues / IPO Market |
| • | Secondary Market / Stock Market / Stock Exchange |
| • | Depositaries |
| • | Private placements of shares / Buy back of shares |
| • | CAPM vs Market Model |
| • | Issue mechanism |
| • | Forward Contract and future contracts |
| • | Clearing mechanism |
| |
| 2. | Capital & Financial Market Regulation | 10% |
|
| • | Financial System and Capital Market Instruments, |
| • | SEBI – Regulation of Market and Control, |
| • | Collective Investment Schemes, Depositories, Dematerialization of Securities, |
| • | Regulation of banking & finance companies – role of Reserve Bank of India and Banking Ombudsmen; Regulation of Insurance sector by Insurance Regulation and Development Authority (IRDA), |
| • | Cyber Law and regulation of e-commerce and electronic financial transactions, |
| • | Contemporary issues and Development |
| |
| 3. | Capital Market Analysis | 30% |
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| • | Stock market efficiency; |
| • | Risk and Return; |
| • | Investment Analysis; |
| • | Cost of Finance And Financing Structures; |
| • | Capital Asset Pricing Model; |
| • | Products on Stock Exchanges: Equity / Stock Markets, Basket Trading, Derivatives, Debt Markets- Retail and Wholesale, Interest Rate Futures, Exchange Traded Funds, Mutual Funds (Close Ended). |
| • | Risk Management System: Capital Adequacy Requirements, Intra day Trading limits, Gross Exposure Limit, Margining Procedure. |
| • | Derivatives Markets: Introduction to Options and Futures, Explanation of Market Terminologies, Pay-off Structure, Basic Trading Strategies, Weekly Options. |
| • | Debt Markets: Debt Products traded in Stock Exchanges, Wholesale Debt Markets, and Retail Debt Markets. |
| • | Commodity Market & Trading Corporate Actions: Bonus, Rights, Dividend, Buy Back etc., Regulations to be followed by the Corporates, Impact on the Shareholders. |
| • | Portfolio Management
| » | Basic Principle, Functions and Activities |
| » | Factors effecting investment decision in portfolio management |
| » | Investment strategy |
| » | Portfolio theory |
| » | Use of matrix approach in investment decisions |
|
| • | Mutual Funds
| » | Role of Mutual Fund in financial market |
| » | Advantage of investment in mutual fund |
| » | Regulations and operations |
| » | Investors right and obligation |
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B. Corporate Law & Corporate Governance ( 50 Marks)
| 4. | Corporate functionalism in the context of Companies Act & Corporate Laws | 30% |
|
| • | Introduction, Incorporation and its Consequences, |
| • | Financial Structure and Membership, |
| • | Management and Control of Companies, |
| • | Inter-corporate loans, Investments, Guarantees and Security, |
| • | Maintenance of Statutory Books/Registers and Filing of Returns, |
| • | Winding-up, |
| • | Joint Ventures, |
| • | Corporate Accountability, |
| • | Competition Act and Competition Commission, |
| • | Information Act and its corporate implication, Emerging Issues and Concepts |
| • | Merger and Acquisition
| » | Reason for merger acquisition |
| » | Objective of acquisition |
| » | Gain from merger |
| » | Problem of merger and acquisition |
| » | Issues related to Companies Act 1956, Industrial(Development & Regulation) Act, Sick Industrial (Special Provision) Act, Income Tax Act, SEBI Regulations |
| » | Function of Court |
| » | Reconstruction |
| » | De-merger or division |
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| 5. | Corporate Governance | 20% |
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| • | Genesis, Narasimhan Committee and other Committee Recommendations on Corporate Governance, |
| • | Effective Board of Directors and its role, |
| • | Independent Directors and Audit Committee, Remuneration Committee, Nomination Committee; |
| • | Evaluation of effectiveness of Internal Control-Management Accounting applications and Directors’ Responsibility Statement; |
| • | Going Concern status-financial and other indicators, role of management audit, evaluation of going concern uncertainties; |
| • | Related party transactions and disclosures; |
| • | Project management audit and corporate governance; |
| • | Relevance of Risk Evaluation and Risk management; |
| • | Evaluation of key financial decisions and disclosures; |
| • | Management Audit for investors’ protection in the context of Corporate Governance, |
| • | Corporate Governance Norms as prescribed by SEBI, |
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