Theory and practice of Forex and treasury management

Theory and practice of Forex and treasury management

Theory and practice of Forex and treasury management (Module 1 +2)

Category: Forex

Author: The Institute of Chartered Accountants of India 

Language: English

Download link: At the end of the post

Contents- Theory and practice of Forex and treasury management

Module 1

1. Treasury – Organisational Structure

Treasury – Its Evolution and Objectives
Organisation Structure of Treasury – Front, Back & Mid Office
Functions of Treasury Department
Role of Treasury and Treasurer in:
Responsiblities of a Treasurer
Intergrated Treasury Management – Cost Centre and Profit Centre

2. Treasury – Process

Treasury Management – Systems and Techniques.
Treasury Policy and Procedure Manual.
Delegation with Accountability
Control and Reporting Requirements.
Dealing and Trading Operations – Control and Orderly Conduct, Moral and Ethical Codes, Checks of Balances, Sigining Ethical Code Agreement.
An insight into

Benchmark Rates for Discounting Cash Flows.
Liquidity and Cash Flow Management – CRR.
Treasury Management Processes like Domestic Remittances, International Remittances.
Payment & Settlement Systems, CCIL, CLS and RTGS, NEFT, SWIFT.
Dealing Room Operations: Nostro / Vostro/ Loro & Mirror A/cs – Open Currency Position / Cash Position by Dealers.

3. Treasury – Domestic
Classification of Treasury Market
Money Market
Money Market Instruments
Capital Markets
Bond Market – Types and its Futures
Understanding Current Yields, YTM, Changes in Yields, Different Maturities of Treasury Bonds, Revaluation – Mark to Market and Profit Calculations, VaR (Value at Risk).
Negative list of investments.
Guidelines on Non-performing investments.
Commodity Market

4. Treasury – Forex

Foreign Exchange Markets

Forex Concepts

International Treasury

External Commercial Borrowings (ECBs)

International Funding Organisations

Derivative Markets

Practical Concepts of Options Market

Black Scholes and Beyond – In Options.
Settlement of Futures / Option Contract.
Swaps Market

Hedge Accounting.
Standard International Agreements

5. Treasury – Mathematics 

YTM – Yield Curve, Modified YTM, Current Yield, Different Versions – Callable Bonds, Callable Yield Notes, Puttable Bonds.
Building ZCC and and Use of ZCC Yields.
Bootstrapping Process to derive the Zero Curve.
Liquidity & Interest Rate Sensitivity Gap measures – RBI Guidelines.
Bond & Securities Valuation – Bond Dynamics – Duration – Modified Duration.
Risk Measures – VaR – Mecaulay Duration.
Back Testing of VaR
Investment Appraisals.
Financial Statement Analysis

6. Treasury – Technology
Role of Information Technology in Treasury Management.
Overview of Software used in Treasury – Banks, Insurance Companies and Corporates.
Storage of Data Files – Reports Generation, IT Risks Mitigation Measures like Business Continuity Plan (BCP), Disaster Recovery Plan (DRP) and Transaction Protections etc.
Bloomberg / Thomson Reuters screenshot showing Forward Markets and their
Interpretation. FX Swap Curve across the globe and Indian and Correlation between Swap Curves.

Module 2

7. Treasury – Accounting 
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

8. Treasury – Taxation
Tax on Derivatives.
Financial Transaction Tax.
Banking Services Tax.
Other Taxes applicable to Treasury Operations (Domestic and Forex).

9. Treasury – Types
Treasury – Manufacturing and Service Corporates

Treasury – Banking

Treasury – Special Reference

10 Treasury – Risk Management
Risk – Definition.
Treasury Risk Management Policy.
Role of Mid Office
System Audit – Risk Management / Mitigations.
Approach to Forex Risk Management Policy.
Risk Hedging Instruments & its Mechanism.
Credit Rating Agencies.
Asset Liability Management.
Viability and Risk of using different Hedging Instruments.
Implications and Challenges of Basel III.
International Swaps and Derivatives Association Master Agreement:

11. Treasury – Regulation, Supervision and Compliance
Treasury Management – Ethics and Compliance.
Prevention of Money Laundering Act, 2002.
Money Market Operations.
Banking Regulations
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.
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
Internal Audit and External Audit.
Internal Audit of Treasury
Treasury Operations – Systems Audit.
Documentation & Internal Audit
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.

About the author

The Institute of Chartered Accountants of India

Download ebook Theory and practice of Forex and treasury management (Module 1+2)

Module 1: PDF

Module 2: PDF

Read more Forex ebook:

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments