AIM OF THE EXAMINATION

To ensure that the holder of the qualification has an appropriate level of factual
knowledge on the regulatory requirements and the financial and market environment within which the investor relations practitioner operates.

OBJECTIVES OF THE EXAMINATION

On completion the candidate will:

• 1. Know the main regulations governing the structure, governance and Behaviour of listed companies
• 2. Know the types of shares and shareholders
• 3. Know the role of stock exchanges
• 4. Know the regulations governing the conduct of investor relations and in Particular the disclosure of information
• 5. Know the legal requirements regarding the financial calendar
• 6. Be familiar with the fundamentals of accounting, ratios, valuation and investment analysis
• 7. Be aware of the requirements for Indian listed companies of the conduct of Investor relations in major overseas markets
• 8. Have an awareness of the conduct of investor relations appropriate to a practitioner

 

LEVEL OF KNOWLEDGE EXPECTED IN EACH AREA

The level of knowledge expected in different parts of the syllabus is set out in the italicised notes together with suggested sources of information. This is for candidates guidance only and should not be viewed as complete or prescriptive.

 

MAIN SUBJECT AREAS

Subject areas refer to India except where otherwise indicated.

 

1. Introduction to IR

• 1.1 What is IR
• 1.2 Aims and objectives
• 1.3 Why companies need IR
• 1.4 Who does IR
• 1.5 The place of IR in the organization
• 1.6 The scope of IR
• 1.7 Key responsibilities of the IRO
• 1.8 IR Resources
• 1.9 The IRO's skill set
• 1.10 Summary - IR Best Practice

 

2. Companies & Regulation

• 2.1. Limited Companies
• 2.2. Companies Act & commencement timetable
• 2.2.1 Types of company
• 2.2.2 Formation of a limited company
• 2.2.3 The Constitution of a company
• 2.2.4 Company & Business names
• 2.2.5 Members
• 2.2.6 Share Capital
• a. Terminology & meanings
• b. Maintenance and alteration
• c. Acquisition of own shares
• 2.2.7 Meetings and resolutions
• a. General meetings
• b. Resolutions
• c. Notice of meetings
• d. Voting at meetings
• e. Annual General Meetings (AGM) of public company


• 2.2.8 Directors
• a. Definition
• b. Appointment
• c. Register of directors
• d. Removal of directors
• e. Directors residential addresses
• f. Employees
• g. Minutes of directors meetings
• h. Company secretary
• i. Directors duties
• j. Transactions with directors requiring members approval
• k. Directors service contracts


• 2.2.9 Auditors
• a. Appointment
• b. Remuneration
• c. Qualifications & independence
• d. Removal or resignation
• e. Duties
• f. Rights
• g. Limitation of liability


• 2.3 Statutory Reporting & Financial reporting calendar
• 2.3.1 Companies Act requirements
• 2.3.2 Requirements of The Listing Rules
• a. Preliminary results
• b. Dividend payments
• c. Half yearly report or interim statement
• d.Quarterly reports
• e. Annual financial report


• 2.3.3 Company Communications Provisions
• 2.3.4 Identification of Shareholdings

This section requires a broad understanding of the fundamentals of Indian company
law and practice, with the rules and processes surrounding some of the major Investor Relations events of the year. Key areas are the legal and regulatory requirements for processes, information and timing.

3. Financial Markets
3.1 How the financial markets work

3.2 How do stock markets work
3.2.1 Exchanges
3.2.2 Functions
3.2.3 Major Centres and Features
3.2.4 Markets
3.2.5 Indices

3.3 Investors
3.3.1 Institutional Investors
a. Types
b. Investment Styles

3.4 Debt Investors
3.4.1 Types of Debt or Fixed Income Investors
3.4.2 Debt Instruments
3.4.3 Credit Rating
Candidates will be expected to display a good working knowledge of the features of investment and the participating bodies. Primary focus will be on India with lesser level of knowledge required of overseas practice, in proportion to the importance of each area to investor relations in the India.

4. Regulatory environment
4.1 Introduction
4.1.1 Key Principles of Regulation
4.1.2 The Indian Regulatory System & who enforces it
4.1.3 Financial Services Authority
4.1.4 Directives and Reports

4.2 Market Abuse
4.2.1 Regulation on Market Abuse
4.2.2 Insider Dealing
4.2.3 Regulation & Insider Dealing

4.3 Listing Rules
4.3.1 Regulations

4.4 The Disclosure and Transparency Rules
4.4.1 When to disclose inside information
4.4.2 Breach of confidentiality
4.4.3 Dealing with rumours
4.4.4 Insider lists
4.4.5 Disclosure of share dealings
4.4.6 Major Shareholdings Notification Rules
4.4.7 Continuing Obligations and Access to Information

4.5 Periodic Financial Reporting
4.5.1 Annual Financial Report
4.5.2 Key Performance Indicators
4.5.3 Responsibility statements
4.5.4 Half-Yearly Financial Reports
4.5.5 Interim management statements

4.6 Corporate Governance
4.6.1 The Combined Code
a. The new Combined Code
4.6.2 Corporate Governance Guidelines

4.7 Takeover Panel
4.7.1 Introduction
4.7.2 Membership of the Panel
4.7.3 Function of the Panel

4.8 Regulatory Announcements
4.8.1 Categories of Announcements
4.8.2 Primary Information Providers
4.8.3 Distribution Process
4.8.4 Monitoring
4.8.5 Secondary Information Providers

4.9 The UK - AIM Rules

4.10 Summary of US Regulation
4.10.1 US Securities and Exchange Commission (SEC)
4.10.2 Laws that govern the US securities industry
4.10.3 Regulation Fair Disclosure
4.10.4 Sarbanes-Oxley Act 2002

Candidates will be expected to display a good working knowledge of the system for regulatory announcements.

5. Accounting Valuation and Investment Principles

5.1 Introduction
5.1.1 What the section will cover
5.1.2 Structure of this section

5.2 Time value of money
5.2.1 Present value & discount factor
5.2.2 NPV/IRR
5.2.3 DCF
5.2.4 Risk and NPV

5.3 Valuation models and measures
5.3.1 DDM 5.
3.2 DGM
5.3.3 EVA & MVA
5.3.4 Shareholder Value Analysis

5.4 Portfolio theory and risk & return
5.4.1 Concept of portfolio risk
5.4.2 Specific risk & market risk - diversification
5.4.3 Beta
5.4.4 Efficient portfolios
5.4.5 CAPM

5.5 Accounts
5.5.1 Use of accounting date in valuations of companies
5.5.2 Key issues from accounting data
5.5.3 Forecasting business drivers
5.5.4 Financial statements - formats and the meaning of the content &
accounting terminology use
5.5.5 Key financial ratios
5.5.6 Return measures - ROCE, ROA, ROE

5.6 Investment ratios - P/E ratios, Price to book, Dividend yield

Focus will be on India with a very much lesser level of knowledge of overseas practice, in proportion to the importance of each area to investor relations in India. Candidates will be expected to display a working knowledge of the measurements and rations in common use and be able to perform some simple calculations.

6. Practical Experience

6.1 Introduction - The Practice of IR
6.2 Who to communicate with - audience identification and targeting
6.3 What to say - developing messages
6.4 How to communicate - the tools and techniques of IR
6.5 When to communicate - disclosure obligations
6.6 The IR programme and typical annual cycle
6.7 Managing the day to day relationships with shareholders and analysts
6.8 Crisis management
6.9 Why do it - measuring the value of IR
6.10 Other Professional Bodies

Candidates will be expected to demonstrate a working knowledge of the major processes by which investor relations is performed.

Teaching Methodology

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