Interest Rate Derivatives Certification Examination – fincarrer.com

Interest Rate Derivatives Certification Examination

I. Introduction to Interest Rate, Interest Rate Instruments and Fixed Income Market.

Understanding the Interest Rate Concept
Fixed Income Securities
Type of Fixed Income Securities
Equity Securities v/s Debt Securities
Concept of risk-free interest rate
Term Structure of Interest Rates
Conversion of Rate into Amount
Accrued Interest
Spot Rate (Zero Rate) and Holding Period Return
Coupon, Current Yield and Yield-To-Maturity
Determining Cash Flow, Yield and Price of Bonds
Risk Measures
Role of the Debt Market
Primary and Secondary Debt Market in India

Interest Rate Derivatives

Derivatives: Definition and Economic Role
Products in Derivatives Market
Growth Drivers of Derivatives
Market Participants in Interest Rate Derivatives Market
Underlying of Interest Rate Derivatives
OTC versus Exchange-Traded Derivatives

Exchange Traded Interest Rate Futures

Interest Rate Futures
Pay off Charts for Futures Contract
Contract Specification of Exchange Traded Interest Rate Futures
Lot Size, Tick Size and Change in Contract Value for each Tick change
Rationale for Introducing Exchange Traded Interest Rate Derivatives in India
Advantages and Limitations of Future Contracts in Comparison to FRA
Interest rate futures price computation

Exchange Traded Interest Rate Options

Basics of Options
Difference between futures and options
Style of options
Moneyness of an option
Basics of Option Pricing and Option Greeks
Option pricing methodology
Implied Volatility (IV)
Pay off Diagrams for Options
Contract Specification of Exchange Traded Interest Rate Options
Comparison of Exchange Traded IRO and OTC IRO

Strategies Using Exchange Traded Interest Rate Derivatives

Market participants
Hedging through Exchange Traded Interest Rate Derivatives
Option Trading Strategies
Use of Interest Rate Derivatives for Speculative Transaction
Use of Interest Rate Derivatives by Arbitragers
Trading spreads using ETIRD
Limitation of Interest Rate Derivatives for Hedgers

Trading Mechanism in Exchange Traded Interest Rate Derivatives

List of Entities in the Trading System
Exchange Trading System
Order Management
Risk Management and Order Routing
Price Limit Circuit Filter
Trading Costs

Clearing, Settlement and Risk Management in Exchange Traded Interest Rate Derivatives

Clearing and Settlement Mechanism
List of Entities in Clearing and Settlement of ETIRD
Interoperability among Clearing Corporations
Clearing Mechanism
Determination of Settlement Obligations
Position Limits
Settlement
Funds Settlement
Delivery Under Physical Settlement
Risk Management
Margin Collection by Clearing Corporation
Core Settlement Guarantee Fund

Regulatory Framework for Exchange Traded Interest Rate Derivatives

Securities Contracts (Regulation) Act, 1956 [SC(R)A]
RBI-SEBI Standing Technical Committee on Exchange Traded Currency and Interest Rate Derivatives
RBI guideline on Exchange Traded Interest Rate Derivatives
SEBI regulation and guideline
Regulatory guideline on participation of various entities in ETIRD
Role of FIMMDA in Fixed Income and Derivatives Markets in India
Eligibility Criteria for Members

Accounting and Taxation

Accounting Guideline and Disclosure Requirements
Taxation of Exchange Traded Interest Rate Derivatives

Code of Conduct and Investor Protection Measure

SEBI’s Code of Conduct for Brokers
Investor Grievance Redressal Mechanism
Investor Protection Fund
Arbitration
Execution of Power of Attorney (PoA) by the Client in favour
of the Stock Broker / Stock Broker and Depository Participant
Risk Disclosure to Client and KYC

URL – https://www.nism.ac.in/interest-rate-derivatives/

Fees (Rs.) – 1500+
Test Duration(in minutes) – 120
No. of Questions – 100
Maximum Marks – 100
Pass Marks*(%) – 60
Certificate Validity(in years) – 3