Introduction to Finance part2

Objective

This resource is a continuation of the part1 where we introduced finance as an area and discussed the accessibility of academic content. In this resource, we will discuss the various opportunities available in capital markets and compliance departments.

3. Job Opportunities in Securities Market

There are various intermediaries in securities market, like merchant banker, trading member, investment advisors, portfolio manager, mutual funds, depository participants, etc. Most of these intermediaries are looking for professionals in the field of finance. Some of the job opportunities these intermediaries provide are as under:

Credit risk/rating Analyst:

1. Work Profile: Work profile of credit risk analyst includes valuing the company/product and to assign appropriate ratings to the debt products issued by the companies and to determine an appropriate probability of default.
2. Who is the employer: Following organizations require the services of the credit risk/rating analyst:
   • Credit Rating Agencies: As per law, all the listed companies are required to get their debt instruments, i.e. debentures and bonds, to be rated from SEBI registered Credit Rating agencies. Hence, Credit Rating Agencies hire professionals in the field of finance. The professional is expected to value the company and to rate the financial product.
   • Lending Institutions like banks, Non Banking Finance Corporations, etc. – The primary work of these institutions is to lend money to large corporate. Considering that there is a risk of default by such companies, all these organizations have an internal team whose primary job is to value the company and to predict the chances of default of the corporate. This helps the organizations to decide whether the loan should be given to the companies and, if yes, the rate of interest to be charged.
3. Qualification required: MBA in Finance, CA, CFA or FRM.
4. Skill set required: Good knowledge of Microsoft Excel, powerPoint and word. Also good drafting and presentation skills are expected by the organizations. Moreover, the person should be good at forecasting models. It is preferred that the candidate learns advance Microsoft excel through various courses available.
5. Challenges: Following challenges may be faced by visually challenged people in this work profile:
   • In the case of credit rating agencies, the officer is required to visit various organizations which involves lot of travelling. Hence, credit rating agencies may avoid recruiting a visually challenged person.
   • Big credit rating agencies and lending institutions may have deployed in house applications for the forecasting models, which may not be accessible with screen reader software.

Investment Banking

1. Work profile of an Investment Banker: The investment banker or merchant banker is an intermediary in securities market. The primary work of an Investment Banker includes the following:
   • Assisting the companies to list their shares on stock exchanges. This involves valuation of company, evaluation of offer price, performing road shows, preparation of prospectus/documents, ensuring compliance of rules and regulations, etc.;
   • Assisting the companies to merge or to acquire another company. This involves valuation of target company, preparation of documents, ensuring compliance of rules and regulations, etc.
   • Assisting the companies to design complex products and the valuation of the same.
2. Qualification required: MBA in Finance, CA, CFA or FRM. The person may also clear Merchant Banker Certification offered by National Institute of Securities Market (NISM), if required.
3. Skill set required: Good efficiency with MS Office, specially word, excel and powerpoint. Understanding of complex products and forecasting models, excellent communication and drafting skills.
4. Courses to improve skills: The candidate can learn advance Microsoft office by doing course provided by different institutes.
5. Challenges: Visually challenged people may face the following issues :
   • Usually the Investment Banking involves a team of individuals working on a particular project. Some employees are involved in front office work, which includes meeting with companies, coordinating with regulatory bodies, doing road shows and meeting big investors; whereas other employees do the back office work which may include drafting of prospectus, compliance of various regulations, valuation of companies/products, etc. Hence, the Investment Banker may be apprehensive towards recruiting visually challenged individuals for its front office work. However, visually challenged individuals may be recruited for the back office work.
   • Some of the big Investment Bankers may have deployed an in house applications for valuations and forecasting which may not be accessible with speech synthesizer software.

Trader/Jobber

Trading members, quite often, recruit traders/jobbers whose job is to trade in securities market on behalf of the trading member and to earn profits.

1. Job Profile of a Jobber/ Trader: A jobber typically buys a security and sells it within a short period of time with an objective to generate maximum profits for its organization.
2. Qualifications required: A graduate can also become a trader but he/she should have cleared following NISM Certifications:
   • Securities Operations and Risk Management – for working with stock brokers;
   • Currency Derivatives certification for trading in currency derivatives;
   • Interest Rate derivatives certification for dealing in interest rate derivatives; and
   • Equity Derivatives Certifications for dealing in equity derivatives.
3. Skill Set required: efficiency in dealing with numbers is a basic pre-requisite for becoming a trader. Technical analysis of the price movements of various securities
4. Courses to improve skillset: The candidate can learn advance Microsoft excel by pursuing courses provided by different institutes. The candidate should also be familiar with macros in MS excel and python programming language so that he/she can build small algorithms which may help him/her in taking trading decisions.
5. Challenges: Following challenges can be faced by a visually impaired individual while working as a Jobber/ Trader:
   • BSE/NSE trading terminals may not be accessible with speech synthesizer software.
   • The applications which generate graphs depicting price-volume movement may not be accessible with the speech synthesizer software.

Research Analyst

1. Role and Responsibility: A research analyst primarily performs following responsibilities:
   • A research analyst is responsible for researching, analyzing, interpreting, and presenting data related to markets, operations, finance/accounting, economics and about various listed companies etc. . 
   • A Financial Analyst is primarily concerned with performing financial forecasting, evaluating operational metrics, analyzing financial data, and creating financial models and presentations to assist executive management in its decision making and reporting on the financial performance of the company.
2. Prospective Employers in securities market: Following organizations usually have research team:
   • Mutual Fund Houses –Mutual fund houses undertake macro research, i.e. economy and industry research, and micro research, i.e. research on specific companies. This information is then used by fund managers to take buy and sell decisions.
   • Boutique Firms: There are companies that specialize in research activities. There are several types of boutique research companies, like market research, operational research, financial research, etc. A finance based research firm evaluates the listed companies and provide their recommendation accordingly.
   • Other intermediaries like Trading members, investment advisors, portfolio management service providers, wealth management organization, etc., also do research on companies and provide their recommendations to their clients.
3. Qualifications required: MBA in finance, CA, CFA or FRM. The person should also clear Research Analyst Certification offered by NISM to become a research analyst in securities market.
4. Skill Set required: excellent in dealing with numbers, Good command on Microsoft office Tools specially MS excel, excellent communication skills, Accessing financial repositories, like Bloomberg, Reuters, Capitaline, etc.
5. Courses for improving skillset: The candidate can learn advance Microsoft excel by pursuing course provided by different institutes. The candidate should also be familiar with macros in MS excel and python programming language to aid in building programs which may help in automating the process of forecasting.
6. Challenges: Following challenges can be faced by a visually impaired individual while performing his/ her duties as a Research Analyst:
   • A research analyst has to meet company management and attend conference calls arranged by the companies from time to time in order to value the company appropriately. However, large organizations may have a dedicated team and, hence, there may be specific people who handle back office work, which may involve analysis and forecasting of financials of the companies.
   • The organizations might have developed in house applications which may not be accessible with speech synthesizer software. Nevertheless, various financial repositories, like Bloomberg, Reuters, Capitaline etc. are accessible with speech synthesizer software.

4. Job Opportunities for Compliance Professionals

The Compliance Professionals mostly deal with compliance of various laws and regulations by organizations. Some of the major laws which mostly all the large organizations need to comply with are Company law, Direct/ Indirect Tax laws and various other Economic laws (like PF, ESIC etc) Further, all the listed companies and capital market intermediaries (like Stock Exchanges, Depositories, Depository Participants, Brokerage firms, Merchant bankers, Credit Rating Agencies, Alternative Investment Funds, Mutual Funds, Venture Capital Funds, Private Equity Funds etc.) in India also have to deal with the relevant SEBI laws. Hence, there is a dedicated compliance department in all the large organizations (including listed companies) and the various securities market intermediaries which ensure compliance with all the relevant laws applicable to the organization.

Compliance job roles with Security Market Intermediaries

All the security market intermediaries like Depository Participants, Brokerage firms, Mutual Funds, Venture Capital Funds, Private Equity Funds etc. have a dedicated compliance department.

1. Work Profile of Compliance Professionals with Securities Market Intermediaries: The primary work of a securities market compliance professional includes the following:
   • Ensuring compliance with the securities laws and regulations applicable to the organization
   • Undertaking liaison with the various Market Infrastructure Institutions (MIIs) like Stock Exchanges, Depositories and Clearing Corporations on a need basis
   • Complying with the timelines for various regulatory filings as prescribed under various regulations
   • Assisting the Management of the organization in taking their decisions by providing legal perspective
   • Representing the organization at various tribunals and assisting the legal team in preparing to represent the organization in various courts
2. Qualification Required: CA, CS
3. Skill Set Required: Proficiency in Microsoft Office Tools especially Word and Powerpoint, good understanding of various securities market laws and regulations, excellent communication/ drafting skills.
4. Courses to improve skillset: Candidate can learn advance MS office from different institutes.
5. Challenges: The major challenge faced by visually challenged individuals in the said job role may arise while representing the organization in tribunals and in various forums as the same would require dealing with physical documents.

Compliance job roles with Listed Companies

Listed Companies are those organizations which have their equity/ debt securities listed on a recognized Stock Exchange. The said securities are available for trading by the general public. Hence, the said organizations have to comply with a gamut of laws and regulations for which compliance professionals are hired.

1. Work Profile of Compliance Professionals with Listed Companies: The job role of a compliance professional with a listed organization primarily involves complying with the requirements of the Companies Act, SEBI regulations and other allied laws and regulations. The main activities while ensuring the same involves the following:
   • Appropriate and timely filing of various Forms and other documents with MCA, SEBI and other agencies .
   • Convening and Conducting the meetings (including AGM, various committee meetings) for the organization
   • Undertaking liaison with the various regulatory bodies and government agencies
   • Engaging with the other stakeholders like Auditors, Investment Bankers, market intermediaries etc. on a need basis.
   • Representing the organization at various tribunals and assisting the legal team in preparing to represent the organization in various courts
2. Qualification Required: CA, CS
3. Skill Set Required: Proficiency in Microsoft Office Tools especially Word and Powerpoint, good understanding of various securities market laws and regulations, excellent communication/ drafting skills, efficiency in dealing with the MCA21 portal
4. Courses to improve skillset: Candidate can learn advance MS office from different institutes.
5. Challenges: The main challenges which might be faced by visually impaired individuals while working in the said area includes the following:
   • The organizations have internal software to deal with the filing requirements of various laws. These software may be inaccessible partially.
   • Due to the requirement of dealing with physical documents the individuals may find it difficult to represent their organization in various tribunals.