Curriculum-NISM-Series-XXII: Fixed Income Securities Certification Examination

I. OVERVIEW OF THE INDIAN DEBT MARKET
A. Role of the Debt Market
B. Importance of Debt Markets
C. The Bond Market Ecosystem
D. Role of Regulators
E. Role of Credit Rating Agencies
F. Role of Monetary Policy in Debt Markets
G. Evolution of Debt Markets
H. Market Dynamics

II. TYPES OF FIXED INCOME SECURITIES
A. Classification of fixed income securities based on the Type of Issuer
B. Classification of fixed income securities based on Maturity
C. Classification of fixed income securities based on Coupon
D. Classification of fixed income securities based on Currencies
E. Classification of fixed income securities based on Embedded Options
F. Classification of fixed income securities based on Security
G. Other fixed income securities in India

III. RISKS ASSOCIATED WITH INVESTING IN FIXED INCOME SECURITIES
A. Risks associated with fixed income securities
B. Risk Mitigation Tools

IV. PRICING OF BONDS
A. Concept of “Par Value”
B. Time Value of Money
C. Determining Cash Flow, Yield and Price of Bonds
D. Pricing of Different Bonds
E. Price-Yield Relationship
F. Price Time Path of a Bond
G. Pricing of a Floating Rate Bond

V. YIELD MEASURES AND TOTAL RETURN
A. Understand the Sources of Return
B. Traditional Yield Measures

VI. TERM STRUCTURE OF INTEREST RATES
A. Yield Curve and Term Structure
B. Relationship between Spot and Forward Rates
C. Determinants of the Shape of the Term Structure

VII. MEASURING INTEREST RATE RISK
A. Price Volatility Characteristics of Option Free Bonds and Bonds with Embedded Options
B. Understand the Concept of Duration
C. Difference between Modified Duration and Effective Duration
D. Price Value of Basis Point (PV01)
E. Convexity Measure
F. Modified Convexity and Effective Convexity
G. Taylor’s Expansion and Its Application in Approximating Bond Price Changes

VIII. INDIAN MONEY MARKET
A. Introduction to Money Market
B. Types of Instruments in Money Market
C. Trends in the Indian Money Market
D. Importance of the Call Money Market
E. Important Rates in the Indian Inter-Bank Call Market

IX. GOVERNMENT DEBT MARKET
A. Introduction to Government Debt Market
B. Types of Instruments in Government Debt Market
C. Trends in the Indian G-Sec Market
D. The Issuance Mechanism
E. Secondary Market Infrastructure for G-Secs in India
F. Clearing and Settlement of Secondary Market Trades
G. G-sec Valuation in India
H. Key Regulatory Guidelines for the Indian G-Sec Market

X. CORPORATE DEBT MARKET
A. The Indian Corporate Debt Market
B. Types of Instruments in Corporate Debt Market
C. Trends in Indian Corporate Debt Market
D. Issuance Mechanism
E. Secondary Market Mechanism
F. Key Regulatory Guidelines for Corporate Debt Market
G. Corporate Bond Valuation