curriculum nism i cd

7/28/2019 Curriculum Nism i CD

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NATIONAL INSTITUTE OF SECURITIES MARKETSEstablished by the Securities and Exchange Board of India

NISM-Series-I: Currency Derivatives Certification Examination Page 1 of4

NISM-Series-I: Currency Derivatives Certification Examination

Curriculum

I. Introduction to Currency MarketsA. History of foreign exchange marketsB. Major currency pairsC. Overview of international currency marketsD. Basics and Peculiarities of currency markets in IndiaE. Settlement or value dateF. Over-the-Counter (OTC) forward marketG. Exchange rate arithmetic- cross rateH. Impact of market economics on currency pricesI. Economic indicatorsII. Foreign Exchange DerivativesA. Evolution of derivativesB. Derivative products and featuresC. Growth drivers of derivativesD. Market players in the foreign exchange marketE. Key economic functions of derivativesF. Exchange-Traded Vs. OTC derivatives

III. Exchange Traded Currency FuturesA. Currency futuresB. Spot priceC. Futures priceD. Contract cycleE. Value date/Final settlement dateF. Expiry dateG. Contract sizeH. Initial marginI. Marking-to-marketJ. Rationale behind currency futuresK. Standard items in a futures contractL. Introduction of currency futures in IndiaM. Futures and forward contractsN. Advantages of futures contractsO. Limitations of futures contractsP. Interest rate parity and pricing of currency futures


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IV. Strategies Using Currency FuturesA. Role of speculation in futures marketsB. Long position in futuresC. Short position in futuresD. Hedging using currency futuresE. Types of hedgersF. Size of the hedging positionG. Trading spreads using currency futuresH. Concept of arbitrageI. Use of arbitrage in currency futures marketsJ. Arbitrage opportunities under various conditionsV. Trading in Currency FuturesA. Contract specification for currency futuresB. Trading parametersC. Tenors of futures contractD. Expiry dateE. Settlement priceF. Entities in the trading systemG. Types of ordersH. Concept of Mark-to-Market (MTM)I. Position limitsJ. Allowable open position limits for members trading in currency futuresK. Monitoring and enforcement of position limits in the currency futures marketL. Surveillance systems and procedures of exchanges

VI. Clearing, Settlement and Risk Management in Currency FuturesA. Clearing entitiesB. Clearing mechanismC. Open positions and obligations of clearing membersD. Settlement mechanism

MTM settlement Final settlement

E. Risk management measuresF. Concept of margin requirementsG. Initial marginH. Portfolio based marginI. Calendar spread marginJ. Extreme loss marginK. Liquid net worth


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L. Liquid assetsM. Real time computationN. Process of margin collection by Clearing Corporations

VII. Exchange Traded Currency OptionsA. OptionsB. Call and put optionC. Bought and sold optionD. Option premiumE. Futures and optionsF. European vs. American optionG. Moneyness of an optionH. Option pricing and option GreeksI. Option pricing methodology

Black-Scholes model Binomial pricing model

J. Option pay offsK. Option strategiesL. Practical application of currency optionsM. Clearing, settlement and risk management for currency options

Initial margin Extreme loss margin Net option value Calendar margin

VIII. Accounting and TaxationA. Accounting treatment for derivative contractsB. Taxation of derivative transaction in securitiesC. Tax treatment of profit/loss on derivative transaction in securities

IX. Regulatory Framework for Currency DerivativesA. Features of Securities Contracts (Regulation) Act, 1956 [SC(R)A]B. Features of Securities and Exchange Board of India Act, 1992C. Recommendations of the RBI-SEBI Standing Technical Committee on Exchange Traded Currency

and Interest Rate DerivativesD. Provisions of Foreign Exchange Management Act, 1999E. Salient features of RBI notification Currency Futures (Reserve Bank) Directions, 2008F. Salient features of RBI Circular, Guidelines on trading of Currency Futures in Recognised Stock /

New Exchanges

G. Salient features of SEBI Regulations for Currency Derivatives ExchangesH. Regulatory framework for clearing corporations


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I. Governing Council of the Exchange and Clearing CorporationJ. Eligibility criteria for membership of currency derivatives exchangesX. Codes of Conduct and Investor Protection MeasuresA. Features of SEBI Codes of Conduct for brokersB. Features of SEBI Codes of Conduct for sub-BrokersC. Features of Codes of Conduct specific to Exchange Traded Currency Derivatives SegmentD. Grievance redressal mechanism for investorsE. Nature of complaints considered by exchangesF. Arbitration mechanism at exchanges

curriculum nism i cd

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