...requisite degree of transparency. Demutualised exchanges will be forced to account to their shareholders regarding the bottom line as well as corporate governance. Secondly, there will be more investor participation. The new corporation will be more profit orientated due to shareholder accountability. Unlike a mutual structure where often only broker-dealers maybe members, a demutualised exchange affords both institutional and retail investors the opportunity to become shareholders. A demutualised exchange will have greater flexibility to accommodate the needs of institutional investors as customers, and potentially, as owners. Thirdly, it is the resources for capital investment. A competitive stock exchange must be able to respond quickly to global competitive forces and technological advances. With the capital raised from initial public offerings or private investment and a heightened awareness of accountability to stakeholders, a stock exchange should have both the incentive and the resources to invest in the competitiveness of its information systems. So to be competitive, products and services must not only be timely and cost effective, but also reliable. The second part of the structural changes needs to be at the SEC of Bangladesh. The fundamental issue here is: what is the regulator doing to help minimise risk for the investors? The absolute minimum the SEC can ensure is to have risk minimising tools. As a first step...
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...regulatory responsibility of the jurisdiction’s capital market regulators, the impact on national standard setters, and the consequences for other bodies responsible for the broader accounting standard-setting process” (page 4). The staff’s research has shown that “…jurisdictions generally have incorporated or intend to incorporate IFRS into their reporting requirements for listed companies by either: (1) full use of IFRS as issued by the IASB or (2) use of IFRS after some form of national or multinational incorporation process, which could lead to a full use of IFRS as issued by the IASB or some local variation thereof” (page 4). According to the staff’s research, very few jurisdictions use the first approach. Majority of jurisdictions use the second approach because it is easier to address country-specific issues, yet, it could impact the use of a single set of globally accepted accounting standards. The SEC and its staff continue researching different approaches to figure out which one will help lead to a consistent set of accounting standards, internationally. b. http://www.ifrs.org/Alerts/PressRelease/Documents/GovernanceReviewFinalReportFeb2012.pdf i. 1. Full membership of the Monitoring Board is limited to the authorities that are responsible for establishing the form and content of financial reporting that are used in the capital markets. 2. New members are chosen from developing markets...
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...the fundamental asset value concept. In other words, assessments of each individual business must be based on its ability to generate added value, rather than on subjective concepts. In our opinion, the economy of the future must become an economy of real values. How to achieve this is not so clear-cut. Let us think about it together.” From the Address of Vladimir Putin, Prime Minister of Russia, at the Davos Economic Forum (February, 2009) This Part analyzes the pre-analytical foundations and macro-economic impact of the Modern Portfolio Theory1 (MPT) tenets, on which much of the present Western investment theory and financial economics is erected. Our general inference is that while the former are tautological at their core and treat capital investment pricing processes as if those relate to an impersonal network of natural oscillators, the latter are perceivably dangerous in spite of the belief in the strong ‘performativity’ (self-fulfillment) of MPT (McKenzie, 2006). Performative the MPT may be, but this performativity comes it a cost: as year by year it only removes the universe of traded...
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...Financial Institutions and Financial Markets FIN/370 Financial Institutions and Financial Markets The state of the economy in the United States is very crucial to businesses and society. The success of the economy is reliant on financial institutions and financial markets. “The market for the creation and exchange of financial assets such as money, stocks, and bonds, plays a central role in organizing and coordinating our economy” (Colander, 2013, p. 643). Financial institutions are essential in providing funding for activities that take place within the financial markets. This paper will describe the roles of financial institutions and financial markets in our economy, as well as compare and discuss the differentiations between markets. The Roles of Financial Institutions Financial institutions play a vital role in the success of our economy and financial markets. They are responsible for financial transactions such as deposits, investments, and loans. Examples of financial institutions are commercial banks, investment banks, credit unions, insurance companies, mutual funds, and brokerages. A few of the well-known U.S. financial institutions are Bank of America, JP Morgan Chase Bank, Wachovia Bank, and Wells Fargo Bank. Financial institutions provide a means of savings for society and businesses. Saving money incurs interest, which allows people and businesses to save additional funds. Financial institutions provide loans so businesses can grow...
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...Introduction This essay mainly discussed the market for information, although this market is invisible, it plays an essential role in financial and banking industry. In part I, the essay will try to explain why the market will exist as well as why the different kinds of participates exist. The market for information is a complex market with a large number of chains and relations between information producers and information buyers. However, some chains and relations of the market are the core part for the market to function well. The essay will also discuss the “Chains of transacting and accountability” and “Networks of assurance”. However, in the process of information producing, there will be some difficulty in learning and knowledge creation. In part II, the essay will firstly introduce the ideal process of learning and knowledge production and secondly discuss the reason for the ineffectiveness of learning and knowledge creation processes. Based on the possible reasons of ineffectiveness, it will also give some suggestions on how to avoid the difficulties in the future. This essay is mainly based on John Holland’s two papers; therefore, in the end, the report will discuss some limitations of these two papers. I. Information production and assurance roles of participants in the ‘market for information’ What is the market for information and why does this market exist? Information markets are usually a place where individual knowledge is organized and aggregated...
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...Internship Report On Effectiveness of DSE Monitoring System SUBMITTED TO: Md. Rafiqul Islam Professor Department of Business Administration Faculty of Business & Economics Daffodil International University SUBMITTED BY: Md. Nasir Uddin ID: 072-11-2038 BBA Department of Business Administration Faculty of Business & Economics Daffodil International University Daffodil International University September 10, 2011 Internship Report On Effectiveness of DSE Monitoring System Date of Submission: 10 September, 2011 4/2, Sobhanbagh, Prince Plaza, Mirpur Road Dhanmondi, Dhaka-1207, Bangladesh LETTER OF TRANSMITTAL August 10, 2011 Md. Rafiqul Islam Professor Internship Supervisor Department of business administration Daffodil International University Subject: Submission of internship report. Dear Sir, This is my pleasure to present my internship report entitled “Effectiveness of DSE Monitoring System” Which was prepared from my experience in Dhaka Stock Exchange. With your kind supervision I believe that the knowledge and experience gathered...
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...Chapter 2 The Financial Market Environment ( Instructor’s Resources Overview Money and capital markets and their major components are introduced in this chapter. Firms need to raise capital in order to survive. Financial institutions give firms access to the money they need to grow. However, greed can drive financial managers and institutions to commit actions that get them into trouble and even force bankruptcy. These bankruptcies result in limited capital flows to firms, and both they and the whole economy can suffer. Therefore, financial institutions and markets should be well regulated. The final section covers a discussion of the impact of taxation on the firm’s financial activities. ( Suggested Answer to Opener-in-Review Question Consider a buyer who purchased a home that month for $150,000, using $30,000 of her own funds as a down payment and borrowing the remaining $120,000 from a bank via a 30-year mortgage. Two years later, prices in Phoenix rose by 30 percent, and the house was worth $195,000. Assuming that after making two years of payments on the 30-year mortgage, the outstanding mortgage balance was still $118,000. How much equity does the buyer have in her home? What rate of return has she earned on her initial $30,000 investment? Buyer’s equity in her home = $195,000 – $118,000 = $77,000 Rate of return = ($77,000 – $30,000) ÷ $30,000 = $156.67% ( Answers to Review Questions 1. The key participants in financial transactions are individuals, businesses...
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...Accounting Standards Building international opportunities for Australian business Corporate Law Economic Reform Program Proposals for Reform: Paper No. 1 © Commonwealth of Australia 1997 ISBN 0 642 26110 5 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be directed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601. The Government is seeking comments from interested parties on the detail of the proposals in this paper which should be forwarded to the following address: First Assistant Secretary Business Law Division The Treasury Parkes Place PARKES ACT 2600 Telephone: 02 6263 3960 Fax: 02 6263 2882 Email: clerp@treasury.gov.au Copies of this paper are available from the Australian Government Publishing Service and on the Treasury web site (http://www.treasury.gov.au). Enquiries concerning the paper can be made to: Ms Veronique Ingram Assistant Secretary The Treasury Telephone: 02 6263 3970 Printed by the Australian Government Publishing Service TABLE OF CONTENTS Page Abbreviations PART 1: PART 2: Reform Proposals Introduction 2.1 2.2 PART 3: Background Key economic principles v 1 9 9 10 11 11 12 13 13 14 16 17 19 19 19 20 22 23 The Case for Reform 3.1 3.2 Impetus...
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...Financial Markets C h a p t e r - 6 59 helped to keep the money market sound and stable during the financial year 2008. A number of steps were taken for activation of secondary trading in treasury bills/bonds. As a result, the overall money market situation was moderate during FY08. Developments in the money market during FY08 are summarized below: Call Money Market 6.3 The volume of transactions in the call money market depicted a mixed trend during FY08 (Table 6.1) reflecting some brisk activities in the money market particularly during the second quarter of the year. It remained sluggish 6.1 A healthy, transparent and dynamically evolving financial system helps mobilize savings and allocate resources, ensure safe and efficient payment and settlement arrangements and ease financial crisis management. Efforts continued in FY08 to establish a healthy and transparent financial system in the country. In addition to the challenges emanating from the internal and external shocks that affected the real sector, there were signs of strain both in the interbank call market and forex market. Volatility in these two markets was tamed through repo operation and intervention by the Bangladesh Bank. Money Market 6.2 Money market, the important segment of financial market that basically channelizes the short term fund in the country was quite active and vibrant with the participation of both banks and non-bank financial institutions during FY08. The...
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...there be any impact on liquidity or volatility 4 4. Analysis 5 5.Impact on Liquidity 10 Conclusion: 13 References 14 1. Introduction Increasing globalization in the last decade has made Indian financial markets more integrated with the rest of the world. As a result, many Indian companies have gone for raising funds in foreign capital markets by way of issuing ADRs and GDRs. Though cross listing is viewed positively by many corporations, many researchers have shown that changes in liquidity and volatility may affect quality negatively in the domestic markets. Since companies from emerging markets go for raising funds from foreign liquid markets, some policymakers fear that if allowed unrestricted, this may impact the development of local equity markets and hence prove disastrous for emerging markets. Existing studies show that effect of foreign listing depends on factors specific to firms, market and country. Indian GDRs trade on European exchanges and ADRs trade on US exchanges. Also, since US requires higher quality disclosures than Europe, cost of listing in US markets is higher. 2. Regulatory Framework As part of its economic liberalization policy in 1992, Indian government allowed Indian companies to raise money from foreign capital markets in the form of DRs. These DRs can be denominated in any currency and can be listed on any foreign exchange. Recently, government has also allowed two-way fungibility of DRs. Earlier only one way fungibility was allowed...
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...helps the borrowers to fulfill the need of the money. A financial system helps promotes the wellbeing and also helps in improving the living standards of people. Lets start with the Capital Market in India first. Capital Market is a market in which individuals and institutions trade financial securities. The securities are sold off and bought in capital market for raising the funds (Investopedia, 2013). Capital Market includes both primary and secondary market. Capital market helps in proper channelization of funds and helps raising long- term funds. This kind of market is a continuous market and provides variety of services. The market where new securities are bought and sold for the first time is known as Primary Market. Types of issue in Primary Market may be through public offer (where shares are offered to general public), bonus issue, Follow- on public offers, private placement (intermediaries sell shares to selected clients at higher price), right offer (shares are offered to existing shareholders) etc. It helps in providing additional capital to issuer companies. Secondary Capital Market is a market where existing securities are bought and sold. Secondary market offers liquidity, which encourages even those investors to invest who wants to invest for small period of time. Secondary market is also known as Stock Exchange, which is an organized body of individuals for purpose of controlling and regulating the buying and selling of securities (App-1). In India there are 24...
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... |greater than a reliable promise to receive the | | | |same amount of money at a future date | | |Efficient market |Market where all pertinent information is |http://www.businessdictionary.com/definition/efficient-| | |available to all participants at the same time, |market.html | | |and where prices respond immediately to available | | | |information. Stockmarkets are considered the | | | |best examples of efficient markets. | | | | | | |Primary versus secondary market|Both the primary market and secondary market are |http://finance.mapsofworld.com/capital-market/primary-v| |...
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...Prepare a glossary for the terms below: Financial market - A financial market is a market in which people trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural goods. Financial instruments - Financial instruments are tradable assets of any kind. They can be cash, evidence of an ownership interest in an entity, or a contractual right to receive or deliver cash or another financial instrument. Financial intermediaries - A financial intermediary is a financial institution such as bank, building society, insurance company, investment bank or pension fund. A financial intermediary offers a service to help an individual/ firm to save or borrow money. Shares/ stocks – Shares/stocks is a share in the ownership of a company. It represents a claim on the company's assets and earnings. As you acquire more shares, your ownership stake in the company becomes greater. Bonds - A bond is a debt investment in which an investor loans money to an entity which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debt holders, or creditors, of the issuer. Treasury bills - A short-dated government security, yielding no...
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...SWFs has been brought into the spotlight. An ever growing number of SWFs worldwide was thought to precipitate tectonic shifts in global equity and foreign exchange markets. Unlike central banks, the SWFs are more likely to invest in emerging nations rather than the developed countries. Stephen Jen, the managing director and chief currency economist at Morgan Stanley, says that the trend for SWFs to move away from sovereign debt to assets that generate higher returns, including financial, resources, tech, and infrastructure plays, is a natural outcome of the globalization financial markets that seeks to adjust existing global imbalance. Based on the diverse investment nature of SWFs, the global fund industry anticipates huge opportunities to make money off the SWFs. At the same time, SWFs are believed to have a stabilizing role in global markets, helping to resuscitate struggling financial institution. This is based on two prominent features of SWFs. One is its longer investment horizon. The other is its greater tolerance for swings in the balance sheets. Despite the optimistic point of views on SWF, potential problems regarding transparency, potential interference and its effect on currency markets have been revealed. Other challenges faced by SWF are about its conservative nature and apparent impact on capital markets according to Jonathan Anderson, the chief economist at UBS Asia-Pacific. 2) As a business student, it is inevitable for us to read business cases. However, enjoy...
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...globe where some genius brains have been able to use the vulnerable platform of stock market to their own advantage by enriching themselves enormously at the cost of unprecedented financial losses to thousands of others. A common tool used by these manipulative brains is what in common parlance is known as Insider trading. With the vast developments in trade and commerce all over, every person has become very materialistic. That is the reason why people in general and particularly those in business have developed profit motives. And it is quite often that to fulfill their own monetary expectations, such people employ illegal or immoral means. One such illegal method used by some vested interests in area of corporate business is insider trading.[1] Thus, when an insider of a company uses its price sensitive confidential information to buy or sell its securities thereby making a personal profit, he commits acts to the detriment of the interests of bona fide investors of the company. However, in reality, insider trading can be both legal and illegal. Legal in the sense when the corporate insiders officers, directors, and employees buy and sell stock in their own companies, whereas illegal insider trading refers to buying and selling of stock by corporate insiders not within their own company.[2] UK and USA had long back created separate boards for the regulations of the securities market. UK has the securities and investment Board (SIB) and USA...
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