Theory and Practice of Forex and Treasury Management

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 Integrated Treasury Accounting Units.  Accounting – Valuation and Elimination of Exposures.  Accounting of Treasury Instruments.  Management of Daily, Weekly and Monthly Liquidity / Funding Plans and Coordinating Plans with Treasury Dealer.  Administration – Bank Cash Management System.  Group Cash Flow Forecasting.  Daily, Weekly and Monthly Treasury MIS to Stakeholders.  Monthly Bank Reconciliation.  Treasury Control and Hedge Accounting: o Treasury Hedge Accounting as per US GAAP (FAS 133, FAS 157), IFRS (IFRS 9, IFRS 13) and Indian GAAP o Detailed Accounting of all Hedge Items in respective Corporates Books 8. Treasury – Taxation 60-88  Tax on Derivatives.  Financial Transaction Tax.  Banking Services Tax.  Other Taxes applicable to Treasury Operations (Domestic and Forex). 9. Treasury – Types 89-135  Treasury – Manufacturing and Service Corporates: o Back ground o Contribution Analysis o Operating and Financial Leverage iv o Liquidity Management o Foreign Exchange Exposures o Commodity Exposures o Credit Exposures o Debt Restructurings  Treasury – Banking o Back ground o Capital Adequacy o Yield Curve and Spreads o Credit Risks o Foreign Exchange Risk o Interest Risks o Re-financing Risks o Securitization o Asset Liability Management  Treasury – Special Reference to: o Insurance Companies (Life & General) o Mutual Fund Organizations o Chit Fund Organizations o Housing Finance Companies o Non-banking Financial Companies o Government (Either State or Central) o Reserve Bank of India o Profit Centre Vs. Non-Profit Treasury 10 Treasury – Risk Management 136-228  Risk – Definition. o Risk Process – Risk Management o Key Risks – Interest Rate Risk, Market Risk, Currency Risk, Credit Risk, Liquidity Risk, Legal and Operational Risk v  Treasury Risk Management Policy. o Risk Measurement and Control o Calculation o Monitoring Risks in Open & Exposure Limits o Risk Exposure Analysis o Risk Mitigation Policy o Risk Immunization Policy o Risk Diversification Strategies o Risk Framework and Individual Instruments o Contingency Plan for Liquidity Management o Reviewing Risk-Return Profile as well as the Tax-efficiency of investment instruments. o Minimizing Float Across the Business Value Chain and reducing the Cost of Borrowing Reviews  Role of Mid Office o Operational Clarity and Documentation and Monitoring.  System Audit – Risk Management / Mitigations.  Approach to Forex Risk Management Policy. o Developing Risk Framework o Country Risk and Operating Risk o Liquidity Coverage Ratio, Net Stable Funding Ratio, Leverage Ratio  Risk Hedging Instruments & its Mechanism. o Forward, Futures, Options, Swaps and Arbitrage Opportunities  Credit Rating Agencies. o Portfolio Management Services.  Asset Liability Management. o Multi Currency Balance Sheet o Organizational Structure o Risk Adjusted return on Capital o Capital Adequacy Norms o ALCO Techniques / Tools – GAP Analysis vi o Liquidity and Interest Rate Sensitivity Gaps o ALM Book – Banking Book & Trading Book o Liability Management using Interest Rate Derivatives o Mismatch of positions – Gap Limits (IGL – Individual Gap Limits and AGL – Aggregate Gap Limit) and Stop Loss Limits VaR & Capital Provisions  Viability and Risk of using different Hedging Instruments. o Hedging Strategies – Mandatory and Optional Hedging – Transactionwise / Portfolio-wise Risk Management  Implications and Challenges of Basel III.  International Swaps and Derivatives Association Master Agreement: o Role played by ISDA Agreement during Global Financial Crisis o Importance of ISDA after Global Financial Crisis 11. Treasury – Regulation, Supervision and Compliance 229-332  Treasury Management – Ethics and Compliance.  Prevention of Money Laundering Act, 2002.  Money Market Operations. o RBI Policy – Liquidity Support for Banks and Primary Dealers o Market Practices o FIMMDA Guidelines (In Detail)  Banking Regulations: o Investment Bankers, Bankers to the Issues, Underwriters o Portfolio Managers, Wealth Advisors, Investment Advisors  Intraday Liquidity Management Guidelines issued by RBI.  RBI Guidelines on Risk Management.  Regulatory Guidelines on Futures, Options, Forward and Swaps.  Recent Policy Guidelines of RBI on Basel III implementation.  Statutory Returns to Reserve Bank of India (RBI).  Overview of Regulatory Requirements SEBI (ICDR) Regulations, 2009.  Latest Foreign Direct Investment Policy. vii  Foreign Exchange Management Act, 1999.  Disclosures in Banks Balance Sheet on Treasury.  FEDAI Guidelines for Merchant Quotes.  RBI Guidelines on Internal Control. 12. Treasury – Auditing 333-363  Internal Audit and External Audit.  Internal Audit of Treasury: o Functions o Departments  Treasury Operations – Systems Audit.  Documentation & Internal Audit: o Limit Setup for Existing / New Corporates o Un-secured and Collateral based Limits set-up  Audit of Regulatory Compliance in particular Foreign Exchange Risk Management.  New Norms in Internal Audit or COSO (Committee of Sponsoring Organizations).  Compliance Guidelines with regard to Investments of Banks.  Issues in Management of Integrated Treasury.  Co-ordination: Internal and External Treasury Audit.
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