Identify and Develop Broking Options for Clients with Complex Needs

CASE: IDENTIFY AND DEVELOP BROKING OPTIONS FOR
CLIENTS WITH COMPLEX NEEDS.
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PART I: WRITTEN ACTIVITY
1. Relevant Legislation, Regulations and Codes of Practice.
The induction training helps to integrate new employees into the company so that they can
easily understand and cope up the work system and get to know procedures of the different
departments of any broking organization.
Relevant Legislation
An induction process must include health and safety management.
 New workers must be ensured to develop good work habits, which will be same with
safe practice of work.
 Induction workplace must look for healthy and safe places.
 Some emergency equipment, such as personal protective equipment must be placed in
the induction workplace, which may require additional training
 fire alarms and firefighting equipment should also be placed, and locations of these
equipment’s and demonstration should also be there
 First aid and other emergency contacts must be placed.
Regulations and codes of practice
a. An induction program should be started by bringing new employees to the mission,
goals, and values of the company. It’s important of the employee induction process
because this provides the reasons why the company exists, where it has come from, and
where it is headed.
b. Other staff members should be introduced to the new employees and let them know
what they do. Welcoming email can also be written to everyone by Supervisors in the
organization.
c. The trainer should use some visuals, past years’ sales figures, and theory based training
need to be avoided. As human beings like to remember the data more than text. Real life
examples of market competition information are important so that they can easily connect.
d. Senior management should be involved by the trainers, so that the trainees can get to
know the people who are there in the scenes of the company.
e. Participative learning methods can be most effective by the process of question and
answer.
f. Product Training
To achieve the success the base should be strong; the training should focus on the core
product areas mainly the Financial Market including the following products.
1. Derivative- Future & options
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2. Mutual Fund, ETFs, NCDs
3. Commodity Derivative
4. Currency Derivative
5. Equity
g. Market training - Trainer should provide some Basic knowledge about capital market and
Derivative market
Currency market and commodity market information should also be included in the
induction program
A Structure of the induction training
 Meet and greet all the employees.
 Introduce them with whole existing team and explain their role.
 A brief of organisation overview need to be given to them.
 The work policies, organisation culture should be described to all the employees
 Explain the role and position of the new employees and what org. is expecting from
them.
 The performance standard need to very clear on the first day only
 A complete review and feedback must be taken from all the new employees.
2. Key Products Available In the Broking Industry.
A. Mutual fund: a combined stock policy that mobilize fund from stock-holders to
stocks, bonds, short-term fund market tools, and/or other securities is known as mutual
fund. Normally the operators manage this portfolio of securities and gain income from
different way such as dividend, interest and capital gains. The incomes gets shared by
shareholders of mutual fund. Generally, financial firm has their own stream of in-house
mutual funds, and the limits of investment is habitually small. This process does not
contain any rigidity on selecting products from various sorts like Equity, Debt and Fund
Markets. Most schemes are open ended that offer liquidity. A person can invest in
Mutual Fund - either in form of Lump-sum or Systematic Investment Plan (SIP).
B. Treasury Bills (T-bills): Treasury bill refers a common short-term currency market
instrument, issued by the RBI, Government of India through. Treasury bill gets issued
with a maturity period of 14, 28, 91, 182 and 364 days. US Treasury issues Treasury bills,
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or T-bills, are short-term debt instruments. To handle T-bills, here we will need to use a
middle-man.
C. Bill Re-discounting Schemes (BRDS): Bill Re-discounting Schemes is scheme of
currency market when banks raise funds by issuing promissory notes in groups and
maturities, this matches with the discounted trade bills. This scheme helps to keep
money liquidity in the market. There is a minimum 15 days and maximum 90 days
limit of transaction. The bank borrowing in this scheme may issue promissory note
to lender and a certificate at an effect - the bank holds genuine bills equaling to the
transaction amount.
D. Capital Gain Bonds: Capital gain bonds are just another type of bonds where a
person can be exempted in terms to long-duration capital gains when the same is
invested in bonds then, the exemption will equal to the amount of investment made,
whichever is less. Interest rate offered is 6% per annum approximately.
3. Organisational Guidelines and Procedures on Assessing Impact of
Risks and Documenting Broking Recommendations.
The organizational guidelines on accessing impact of risk are
 The system should have the ability to calculate all necessary market risks regarding
assets, liabilities & subjects off the balance sheet items.
 Risk regarding interest rate, exchange rate and pricing should be included.
 “There are different ways to measure market risks; each has its own benefits and
restrictions. There are different models like net income simulation, re-pricing gap
report, economic valuation model”.1
 Correct, reliable, accurate and timely information should be employed; it’s an
important factor in risk measurement process.
 Factors accessing the negative effects on the system should have a reliable source
for selection.
 To manage market risks financial Institutions, need to follow three fundamental
managerial approaches:
 Practical guidelines and policies for risk management.
 Audit independence with internal control.
1 Palea, V. (2014). Fair value accounting and its usefulness to financial statement users. Journal of Financial Reporting and
Accounting, 12(2), 102-116.
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