Common Derivative certificate Examination Overview
The various derivatives products available in the three derivatives segments, regulations, and risks associated with these products and the exchange mechanisms of clearing and settlement. It also covers knowledge competencies related to the understanding of the financial structure in India and the importance of the different rules and regulations governing the Indian securities market, especially those related to the exchange traded derivatives.
What are the course objectives?
- Know the basics of the Indian derivatives market (covering Equity Derivatives, Currency Derivatives, and Interest Rate Derivatives).
- Understand the various trading and hedging strategies that can be built using futures and options.
- Understand the clearing, settlement and risk management as well as the operational mechanism related to the derivatives markets.
- Know the regulatory environment in which the derivatives markets operate in India.
Course Fees ?
Name of Examination: NISM-Series-XIII: Common Derivatives Certification Examination
|Fees (Rs.)||Test Duration (in minutes)||No. of Questions||Maximum Marks||Pass Marks* (%)||Certificate Validity (in years)#|
|3000+||180||150||150||60% or 90 marks||3|
* Negative marking – 25% of the marks assigned to the question.
+ Payment gateway charges extra.
# Passing Certificate will be issued only to those candidates who have furnished/updated their Income Tax Permanent Account Number (PAN) in their registration details.
Benefits from this Course ?
- All approved users and sales personnel of trading members of currency derivatives, interest rate derivatives and equity derivatives segments of recognized stock exchanges
- Interested students/professionals
- Any other individuals
The examination seeks to create a common minimum knowledge benchmark for:
- The approved users and sales personnel of the trading members of the Currency Derivatives Segment of a recognized stock exchange and trading in Currency Derivatives
- The approved users and sales personnel of the trading members who are registered as such in the Currency Derivatives Segment of a recognized stock exchange and trading in Interest Rate Derivatives
- The associated persons functioning as approved users and sales personnel of the trading members of equity derivatives exchange or equity derivative segment of a recognized stock exchange
Frequently Asked Questions
Is there a study material available for preparing for this examination?
The candidate has to prepare from the workbooks of NISM-Series-I: Currency Derivatives Certification Examination, NISM-Series-IV: Interest Rate Derivatives Certification Examination and NISM-Series-VIII: Equity Derivatives Certification Examination. There is no separate workbook for this examination as this is a combined examination of the above mentioned three examinations (CD, IRD, and ED). You will receive a soft copy of the above-mentioned workbooks after enrollment for this examination. For non-receipt of soft copy of the workbook/study material, you may contact NISM at email@example.com
Do I have to pay for the study material?
You will receive a soft copy of the workbook/study material free of cost after enrolment for the examination.Candidate can buy NISM workbooks online through Taxmann Publications Private Ltd.
Visit https://www.taxmann.com/bookstore/nism-iibf-books.aspx to place your orders for NISM workbooks.
If you prefer to order by phone, please call your nearest store directly to place your order.Click here to get the details of your nearest store.
I have passed NISM Common Derivatives Certification Examination, when will I receive the certificate?
Only the candidates who have produced their Income Tax Permanent Account Number (PAN) during registration would receive the NISM Certificate within two weeks of appearing for the examination.
Candidates who produced other identification proofs would not receive the NISM certificate. They would receive only the temporary mark sheet at the end of the examination.
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CHAPTER-1: Basics of Derivatives
Introduction to derivatives
History and evolution of derivatives market
Factors influencing the growth of derivatives market
History of Indian derivatives Market and available derivative products in India
Market participants and their roles in the derivatives markets
OTC and Exchange Traded Market
Significance and economic purpose of derivatives
Risks associated with financial derivatives
CHAPTER-2: Introduction to the Underlying Markets
Introduction to Equity Markets and Equity Indices
Introduction to Currency Markets
Introduction to Fixed-income Securities
Introduction to “Interest Rate” concept and yield curve
Return and Risk Measures for Debt Securities (Current yield, YTM, Duration, PVBP, Convexity, etc.)
CHAPTER- 3: Introduction to Forwards and Futures
Introduction to Forwards and futures contracts
Forwards and Futures on Equities
Payoff Charts for Futures contract
Basic differences in Commodity, Equity and Index Futures
Exchange Traded Currency Futures
Concept of Interest rate parity and pricing of currency futures
Interest Rate Futures
Delivery aspects of IRD contracts including conversion factor, invoice amount, cheapest-to-deliver bond
Chapter – 4: Strategies Using Futures
Strategies using Equity Futures
Strategies for hedging, speculation, and arbitrage in futures market
Strategies Using Currency Futures
Strategies Using Interest Rate Futures
Chapter – 5: Introduction to Options – Options on Equities and Currencies
Basics of options
Concept of option premium
Call and Put option
Buying and selling (writing) options
European vs. American option
Moneyness of an option
Binomial and Black-Scholes option pricing models and option Greeks
Payoff charts for options
Uses of Options
Chapter – 6: Option Trading Strategies – Strategies using Equity Options and Currency options
Options spreads and their payoff charts
Straddle: market view and payoff charts
Strangle: market view and payoff charts
Covered Call: market view and payoff charts
Protective Put: market view and payoff charts
Collar: market view and payoff charts
Butterfly spread: market view and payoff charts
chapter – 7: Introduction to Trading, Clearing, Settlement & Risk Management
Introduction to Trading Systems
Clearing Mechanism and computation of open positions
Settlement Mechanism for futures and options contracts
Margining and mark to market (MTM) under SPAN
Risk Management features, position limits and net worth requirements
Margin collection process of Clearing Corporations and delivery procedure
Chapter – 8: Legal and Regulatory Environment
Provisions of Securities Contract (Regulation) Act, 1956
Role of SEBI in regulating Derivatives market and SEBI Act, 1992
Important rules and regulations on trading in Derivatives market
Regulations in clearing & settlement and risk management
Outline major recommendations of the L C Gupta Committee
Outline major recommendations of the J R Verma Committee
RBI-SEBI Standing Technical Committee on Exchange Traded Currency and Interest Rate Derivatives
Provisions of Foreign Exchange Management Act, 1999
Salient features of RBI notification ‘Currency Futures (Reserve Bank) Directions, 2008
Features of RBI Circular ‘Guidelines on trading of Currency Futures in Recognized Stock / New Exchanges’
Salient features of SEBI Regulations for Currency Derivatives Exchanges
Explain the role of various regulators in Bond and Interest Rate Derivatives Market
Regulatory reporting requirements for Interest Rate Derivatives Markets
Role of FIMMDA in fixed income and derivatives markets in India
Chapter – 9: Accounting and Taxation
Accounting treatment for derivative contracts
Taxation of derivative transaction in securities
Chapter – 10: Sales Practices, Code of Conduct and Investor Protection Measures
Basic features of SEBI Codes of Conduct for Brokers and Sub-Brokers
Importance of risk profiling of clients in sales process
Importance of KYC and required documentation for investors to trade in Derivatives contract
Best practices in derivatives sales
Grievance redressal mechanism available to the investors
Nature of complaints considered by exchanges
Arbitration mechanism at exchanges