Financial System and Capital Market Operations

Paper Code: 
EMF 522
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 
  1. The course will consider the economic principles underlying the working of national and international financial institutions. It aims to cover the basic theory and operation of financial systems from an economist’s viewpoint. The stress is on financial instruments, markets in which they are traded, and attendant structures.
  2. This course is intended to serve as a base for understanding bigger deeper issues in financial services and products, derivatives and risk, perspectives.
12.00
Unit I: 

The Financial System: An Introduction
Introduction, Components of the Formal Financial System, functions of a financial system, key elements of a well-functioning financial system, financial system designs, nature and role of financial institutions and financial markets. Global Financial Markets.
 

12.00
Unit II: 

Reforms in the financial system
Indian financial system in the pre reform period, objectives of financial system reforms, a macro economic frame work analysis for exploring the role of the financial system in the economy.
 

12.00
Unit III: 

Capital Markets
Organization and structure of markets- Primary market and secondary market, Role of Stock Exchanges in India, Dematerialization of securities and its need, Depository / Depository Participant, Brokers and their role in Capital Market, Secondary Market - Screen based versus Open Out Cry. Market Indices- Concept and methodology. Capital Market Integration- US,Japan,India and China
 

12.00
Unit IV: 

Regulations for Public Issue
SEBI guidelines for public issue, IPO Process, Conventional Method versus Book Building Route (Fixed price versus price range), DIP Guidelines , Public Issue versus Private Placement, Listing Eligibility Requirements, IPO Process, Conventional Method versus Book Building Route (Fixed price versus price range), DIP Guidelines.
 

12.00
Unit V: 

Legal Frame Work
SEBI Act, Insider Trading Regulations, Corporate Governance Guidelines, Buy Back of Shares, ESOPs, Investor Protection Guidelines.
Reforms in Indian Capital Market in Post Liberalization era.    

 

  • A minimum of one case study will be discussed per unit of the syllabi.
References: 

Text Book:

  1. M.Y. Khan, and P. K. Jain, Indian Financial System, Tata McGraw Hill,2009
  2. L.M. Bhole, Indian Financial Systems and Markets, Tata McGraw Hill,2009
  3. Kohn Meir, Financial Institutions and Markets, Tata McGraw Hill, 2009.
  4. Security Analysis and Portfolio Management by Donald E Fisher and Ronald J. Jordon, Prentice Hall, 6th Edition,2009
  5. Investment Analysis and Portfolio Management, Prasanna Chandra, Tata McGraw Hill, 3rd Edition, 2009
  6. SEBI Manual, 2 Vols,2010, Taxman

Other readings:

  1. Business World. Business India
  2. Finance Review. Economic Times
  3. RBI and SEBI websites.
  4. NSE and BSE websites