NATIONAL STOCK EXCHANGE OF INDIA LIMITED

DEPARTMENT : SBU - EDUCATION NCFM COURSE OUTLINE OPERATIONS RISK MANAGEMENT MODULE

Introduction to Operations Risk

A. B. C. D. E. Risk & Uncertainty The Financial Sector Risk Types Operations Risk Operations Risk Management 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Recruitment & Training Work Flow Design Work Flow Documentation Delegation of Authority Independent Internal Audit Independent Compliance Function Independent Risk Management Function Systems Audit Corporate Governance Whistle Blower Policy Risk Management Culture

Trades in Secondary Market

A. Trade Intermediaries 1. 2. 3. Stock Broker Trading Member (TM) Clearing Member (CM)

Regd. Office : Exchange Plaza, BandraKurlaComplex, Bandra (E), Mumbai 400 051

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4. 5. B. C.

Authorised Persons Sub-brokers

Screen-Based Trading System NEAT System 1. 2. 3. Corporate Manager Branch Manager Dealer

D.

Order Management 1. 2. 3. 4. Entering Orders Modifying Orders Cancelling Orders Order Matching

E. F.

Trade Management Risk Management in Trades

Clearing & Settlement of Trades

A. B. C. Transaction Cycle Clearing Settlement 1. 2. D. Pay-in of Funds and Securities Pay-out of Funds and Securities

Settlement Risks 1. 2. Counter-Party Risk System Risk

E. F.

Risk Management Investor Protection

Workflow Design
A. B. Front Office, Middle Office & Back Office Risk Events

BASEL Overview
A. B. Bank for International Settlements (BIS) Basel Accords
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Regd. Office : Exchange Plaza, BandraKurlaComplex, Bandra (E), Mumbai 400 051

1. 2. 3. C.

Basel I Basel II BASEL III

Detailed Loss Event Type Classification

Basel II: Operational Risk

A. The Three Methods 1. 2. 3. B. C. Basic Indicater Approach The Standardised Approach Advanced Measurement Approaches

Mix of Three Methods SIGOR (June 2011) 1. 2. 3. 4. 5. 6. 7. Risk Appetite & Risk Tolerance ORMF & ORMS: Verification & Validation Embeddedness Operational Risk Data Gross Loss & Net Loss Dates Distributions

Basel: Operational Risk Principles

A. B. Background The Principles

Basel: Audit
A. B. C. External Audit Audit Committee Internal Audit

Regd. Office : Exchange Plaza, BandraKurlaComplex, Bandra (E), Mumbai 400 051

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