By Vishal Ranjeet & Candice

1. By Vishal Ranjeet & Candice

2. Stock Exchange

3. History of stock exchange • 12th century France, • Unofficial share markets existed across Europe through the 1600s, • The Amsterdam Stock Exchange, created in 1602, • By the early 1700s there were fully operational stock exchanges in France and England, and America followed in the later part of the century. • The early days of the stock exchange experienced many scandals and share crashes, as there was little to no regulation and almost anyone was allowed to participate in the exchange.

4. Role and Functions of a stock exchange • Established for the purpose of assisting, regulating and controlling business of buying, selling and dealing in securities • The stock market is one of the most important sources for companies to raise money

5. Role and Functions of a stock exchange • Provides a market for the trading of securities to individuals and organizations seeking to invest their saving or excess funds through the purchase of securities • Provides a physical location for buying and selling securities that have been listed for trading on that exchange • Establishes rules for fair trading practices and regulates the trading activities of its members according to those rules • The exchange itself does not buy or sell the securities, nor does it set prices for them

7. 1. NYSE Euronext (US & Europe) Founded on April 4th 2007. NYSE Euronext Inc is a Euro-American for-profit corporation that operates multiple securities exchanges, New York Stock Exchange (NYSE), Euronext and NYSE Arca.

8. 2. NASDAQ OMX (US & North Europe) The NASDAQ OMX Group, Inc. (NASDAQ: NDAQ) is an American multinational financial services corporation that owns and operates the NASDAQ stock market and eight European stock exchanges in the Nordic and Baltic regions and Armenia under the NASDAQ OMX banner. It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange.

9. 3. Tokyo Stock Exchange The Tokyo Stock Exchange was established on May 15, 1878, as the Tokyo Kabushiki Torihikij. The exchange has 2,292 listed companies.

10. 4. London Stock Exchange Founded in 1801, the London Stock Exchange is the third largest stock exchange in the world.

11. 5. Shanghai Stock Exchange The Shanghai Stock Exchange was re-established on 26 November 1990. It is not fully open to foreign investors due to tight capital account controls by the Chinese mainland authorities.It is a membership institution directly governed by the China Securities Regulatory Commission(CSRC).

12. 6. Hong Kong Exchange Founded in 1891, it is Asia's third largest stock exchange in terms of market capitalisation after Tokyo Stock Exchange and Shanghai Stock Exchange and 6th largest in the world.

13. 7. TMX Group Founded in May 2008, The TMX Group owns and operates the Toronto Stock Exchange (TSX), and the TSX Venture Exchange (TSX-V), formerly known as the Canadian Venture Exchange (CDNX), the Montreal Exchange, the Natural Gas Exchange and the Boston Options Exchange.

14. 8. BM&FBOVESPA The Sao Paulo Stock Exchange (Bovespa) and the Brazilian Mercantile and Futures Exchange (BM&F) merged, creating BM&FBOVESPA. It was founded in August 23, 1890.

15. 9. ASX Founded in 1987. The Australian Securities Exchange (ASX) was created by the merger of the Australian Stock Exchange and the Sydney Futures Exchange in July 2006. It is the primary stock exchange group in Australia.

16. 10. Deutsche Borse Founded in 1993, Deutsche Borse AG gives companies and investors access to global capital markets. It is a joint stock company with its headquarters in Frankfurt, Germany. As of December 2010, the over 765 companies listed in the bourse.

17. World’s top Stock Exchange as of 31 Dec 2011

18. Metals Energy Commodities Exchange

19. Commodities Exchange Most commodity markets across the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies, oil, metals, etc.) and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures. Other sophisticated products may include environmental instruments, or ocean freight contracts. Commodities exchanges usually trade futures contracts on commodities, such as trading contracts to receive something, say corn, in a certain month.

20. Role of an Exchange • Anonymous auction for price discovery • Neutrality - conflict of interest avoided • Transparent real time price dissemination • Benchmark reference price • Liquidity to participants • Risk Management in a volatile market • Robust Clearing & Settlement systems - counter party credit risk mitigated • Fair, safe, orderly market - rigorous financial standards and surveillance procedures

21. Benefits of trade on Futures Market • Risk transfer platform from actual users to traders / speculators • Helps hedgers concentrate on core activity • Long term price signals help • Farmers to decide cropping pattern • Corporate managers to take investment / capital expenditure decisions • Cover sales and raw materials risk • Cost of Capital reduced • A good investment option • Arbitrage opportunities

22. Commodity Market Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.

23. Advanced technology in trading • With modern-day technology, the area of commodity trading has developed into a blazing-speed international marketplace. In today’s global market, traders can buy and sell an enormous amount of both physical and financial commodity futures fast and easily. • The technology of the internet allows any trader to buy 10,000 bushels of soybeans and sell $200,000 worth of treasury bonds, and hedge a cash position in the Australian dollar only within a few click of mouse. • While it is the fact the today highly advanced technology has supported the commodity trading market to developed and expanded, it is very important to realise the main objective or reason why people – the buyers and sellers come to this market. Making a profit or hedging their position.

24. Worlds top commodity exchage

25. CME Group CME Group Inc. (NASDAQ: CME) owns and operates large derivatives and futures exchanges in Chicago and New York City, as well as online trading platforms. It also owns the Dow Jones stock and financial indexes. The exchange-traded derivative contracts include futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, rare and precious metals, weather and real estate.

26. Tokyo Commodity Exchange The Tokyo Commodity Exchange (TOCOM) is a non-profit organization, and regulates trading of futures contracts and option products of all commodities in Japan. The Tokyo Gold Exchange, the Tokyo Rubber Exchange, and the Tokyo Textile Exchange merged in 1984 to form TOCOM.

27. NYSE Euronext (US & Europe) Founded on April 4th 2007. NYSE Euronext Inc is a Euro-American for-profit corporation that operates multiple securities exchanges, New York Stock Exchange (NYSE), Euronext and NYSE Arca.

28. Dalian Commodity Exchange The Dalian Commodity Exchange (DCE)is a Chinese futures exchange based in Dalian. It is a non-profit, self-regulating and membership legal entity established on February 28, 1993. Dalian Commodity Exchange trades in futures contracts underlined by a variety of agricultural and industrial produce on a national scale.

29. London Metal Exchange The London Metal Exchange (LME) is the futures exchange with the world's largest market in options, and futures contracts on base and other metals. As the LME offers contracts with daily expiry dates of up to three months from trade date, along with longer-dated contracts up to 123 months, it also allows for cash trading. It offers hedging, worldwide reference pricing, and the option of physical delivery to settle contracts.

30. Multi Commodity Exchange Multi Commodity Exchange of India Ltd (MCX) is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. The turnover of the exchange for the fiscal year 2009 was US$ 1.24 trillion, and in terms of contracts traded, it was in 2009 the world's sixth largest commodity exchange. ([1]) MCX offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities (mentha oil, cardamom, potatoes, palm oil and others).

31. Intercontinental Exchange • Intercontinental Exchange, Inc., known as ICE, (NYSE: ICE) is an American financial company that operates Internet-based marketplaces which trade futures and over-the-counter (OTC) energy and commodity contracts as well as derivative financial products. While the company's original focus was energy products (crude and refined oil, natural gas, power, and emissions), recent acquisitions have expanded its activity into the "soft" commodities (sugar, cotton and coffee), foreign exchange and equity index futures.

32. Africa Mercantile Exchange • The AfMX® (in full, Africa Mercantile Exchange Limited) is a Nairobi-based Commodity Exchange. It is the first fully diversified commodities exchange in Africa in terms of Product portfolio. • It is also the first mercantile exchange to be created in Africa. On June 24, 2005, the Africa Mercantile Exchange was incorporated, creating the Africa Mercantile Exchange AfMX.

33. Foreign Exchange

34. 0 Functions of FX Market The foreign exchange market is the mechanism by which participants: • transfer purchasing power between countries; • obtain or provide credit for international trade transactions, and • minimize exposure to the risks of exchange rate changes.

35. Bid & Ask Quotes Foreign currency dealers provide two quotes: Bid Price: Price at which the dealer is willing to buy foreign currency from you. Ask Price: Price at which the dealer is willing to sell foreign currency to you. • It is always the case that the Ask Price > Bid Price. The difference is the Bid-Ask spread. • The less traded and more volatile a currency, the greater is the spread.

36. Why is the ForEx Unique? • its huge trading volume representing the largest asset class in the world leading to high liquidity; • its geographical dispersion; • its continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday; • the variety of factors that affect exchange rates; • the low margins of relative profit compared with other markets of fixed income; and • the use of leverage to enhance profit and loss margins and with respect to account size.

37. Top 10 Currency Tradersas of May 2011

38. Most Traded Currencies by Value

39. FINANCIAL SERVICE AUTHORITY

40. Who are the FSA? Founded in Dec, 2011 - FSA are the regulators of the financial services industry in the UK, which regulates and supervises all insurance activity in the UK (as well as banks, mortgages, pensions etc). It also 'manages' the Financial Services Compensation Scheme, as it is the scheme which guarantees ('insures') any failure of a UK bank, insurance company or other eligible financial services operation. The FSA are owned by the UK government.

41. Who are the FSA? In short, the FSA describe their statutory objectives as covering: • market confidence: maintaining public confidence in the financial system • financial stability & public awareness: contributing to the protection and enhancement of stability of the UK financial system and promoting public understanding of the financial system. • consumer protection: securing an appropriate degree of protection for consumers. • reduction of financial crime: reducing the use of business practices for criminal purposes or activities. Granted statutory powers in the UK by The Financial Services and Markets Act 2000, the FSA sets standards to which such organizations must comply and can take action against them should they fail to meet required standards.

42. Wills & Co Stockbrokers Limited Wills and Co Stockbrokers Ltd., founded in 1883, provides equity opportunities in main market, small caps, and unlisted company shares. It offers clients a balanced portfolio to buy and sell shares in the UK equity markets. • FSA stopped them from giving investment advice because of its poor sales practices. • FSA banned them from 19,000 clients. • On 20 Aug 2010 they were confirmed ‘default’ • 1400 complained about them. • They have an approved CVA (Company Voluntary Arrangement)

43. What does FSA authorized mean? If a company is FSA authorized then the FSA have checked that they: • Operate Segregated Client Accounts – separate from the day to day running of the business • Have proper arrangements in place for “safeguarding” client funds (e.g. If the company runs into money difficulties, the customers money is still protected” • Have adequate funds – maintain specified levels of capital adequacy • A solid balance sheet • Directors must pass an FSA fit and proper test • None of the employees have been convicted for financial crimes, the business is serviceable and organized appropriately to deal in money transfers.

44. MEMBERS The FSA is governed by a Board appointed by HM Treasury. The current members of the Board are: • Adair Turner– Chairman

45. MEMBERS • Deputy Chairman - vacant, following resignation of Sir James Crosby • Hector Sants - Chief Executive, formerly CEO EMEA Credit Suisse First Boston • Jon Pain - Managing Director of the Supervision Business Unit, the FSA • Sally Dewar - Managing Director of the Risk Business Unit, the FSA • Lesley Titcomb - Acting Chief Operating Officer, the FSA • Carolyn Fairbairn - Non-executive FSA Board member, Director of Strategy and Development at ITV plc • Peter Fisher - Non-executive FSA Board member, Managing Director of BlackRock • Brian Flanagan - Non-executive FSA Board member, formerly a Vice President of Mars Inc • Karin Forseke - Non-executive FSA Board, formerly CEO of Carnegie Investment Bank AB • Sir John Gieve - Non-executive FSA Board member, Deputy Governor, Financial Stability of the Bank of England • Professor David Miles - Non-executive FSA Board member, Managing Director and Chief UK Economist at Morgan Stanley • Michael Slack - Non-executive FSA Board, Director of the British Insurance Brokers' Association • Hugh Stevenson - Non-executive FSA Board member, Chairman of the FSA Pension Plan Trustee Ltd • Mick McAteer - Non-executive FSA Board member, Director, Financial Inclusion Centre.

46. CMC Market The fact that CMC Market has FSA as a regulator shows that the company is • Operate Segregated Client Accounts • Have proper arrangements in place for “safeguarding” client funds • Have adequate funds • A solid balance sheet • Directors have passed the FSA fit and proper test • None of the employees have been convicted for financial crimes.

47. THANK YOU!