CERTIFICATE IN INVESTOR RELATIONS ANNOTATED SYLLABUS

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 upon UK 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 the UK except where otherwise indicated.

1. Introduction to IR
1.1 Aims and objectives of IR 1.1.1 What is IR 1.1.2 Aims and objectives Why companies need IR 1.2.1 Tactical reasons 1.2.2 The place of IR in the organisation 1.2.3 The scope of IR 1.2.4 Board expectations of the role of IR Skills and responsibilities of the IR function 1.3.1 Key responsibilities of the IRO 1.3.2 The IROs skill set Communication with target groups 1.4.1 External audiences 1.4.2 Internal audiences 1.4.3 Audience identification 1.4.4 Investor targeting 1.4.5 What to say developing messages 1.4.6 Communication tools and techniques 1.4.7 Disclosure obligations 1.4.8 Earnings announcements The day to day business of IR 1.5.1 The IR programme and typical annual cycle 1.5.2 Managing the day to day relationships with shareholders and analysts 1.5.3 Providing earnings guidance 1.5.4 Organising presentations and roadshows 1.5.5 Board reporting 1.5.6 IR during a crisis 1.5.7 Measuring the value of IR 1.5.8 IR as part of corporate governance 1.5.9 IR Best Practice

1.2

1.3

1.4

1.5

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

2. Companies & Regulation

2.1 2.2 Limited Companies Companies Act 2006 & commencement timetable 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 Types of company Formation of a limited company The Constitution of a company Company & Business names Members

2.3

2.4

Share Capital (i) Terminology and meanings (ii) Issue and allotment of shares (iii) Maintenance and alteration (iv) Acquisition by a limited company of its own shares 2.2.7 Meetings and resolutions (i) General meetings (ii) Resolutions (iii) Notice of meetings (iv) Voting at meetings (v) Annual General Meetings 2.2.8 Directors (i) Definition (ii) Appointment (iii ) Register of directors (iv) Removal of directors (v) Directors Residential addresses (vi) Employees (vii) Minutes of meetings (viii) The Company Secretary (ix) Directors duties (x) Transactions with Directors 2.2.9 Auditors (i) Appointment (ii)Remuneration (iii) Qualifications and independence (iv) Removal or resignation (v) Duties (vi) Rights (vii) Limitation of liability of auditors Statutory Reporting & Financial reporting calendar 2.3.1 Companies Act 2006 requirements 2.3.2 Requirements of The Listing Rules (i) Preliminary results (ii) Dividend payments (iii ) Half yearly report (iv) Interim management statements and annual report (v) Annual Financial report 2.3.3 Company communication provisions 2.3.4 Identification of shareholdings S793 AIM Companies 2.4.1 Preliminary statement 2.4.2 Half yearly report (AIM rule 18) 2.4.3 Annual Report and accounts (AIM Rule 19)

2.2.6

This section requires a broad understanding of the fundamentals of UK company law and practice. It also requires candidates to be familiar 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.

Section 3. Financial Markets

3.1 Financial Markets 3.1.1 Purpose 3.1.2 Types How do equity or stock markets work? 3.2.1 Exchanges 3.2.2 Functions 3.2.3 Major centres and features (i) Equity Markets (ii) Trading services (iii) Market information (iv) Derivatives 3.2.4 Markets (i) Primary markets (ii) Secondary markets 3.2.5 Indices Equity investors 3.3.1 Institutional Investors (i) Types of investors (ii)Pension funds (iii)Insurance companies (iv)Unit trusts and mutual funds and investment companies (v) Hedge funds (vi)Sovereign Wealth funds 3.3.2 Retail investors 3.3.3 Investment styles 3.3.4 Trends in investment management Debt Investors 3.4.1 Types of debt or fixed income investors 3.4.2 Debt instruments 3.4.3 Credit ratings

3.2

3.3

3.4

Candidates will be expected to display a good working knowledge of the features of investment and the participating bodies. Primary focus will be upon the UK with a lesser level of knowledge required of overseas practice, in proportion to the importance of each area to investor relations in the UK.

Section 4. Regulatory environment

4.1 Introduction and principles 4.1.1 The Key Principles of Regulation 4.1.2 The UK regulatory system and who enforces it 4.1.3 FSA 4.1.4 European Union Directives and Reports 4.1.5 Markets in Financial Instruments Directive (MiFID) Market Abuse 4.2.1 UK Regulation on market abuse 4.2.2 Insider dealing 4.2.3 UK Regulations on insider dealing

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9 4.10

Listing Rules 4.3.1 UK Regulation (i) The official list (ii) The structure of the official list 4.3.2 Listing Rules (i) Listing principles (ii) Sponsors (iii) Transactions (iv) Continuing Obligations (v) The Model Code 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 shareholder notification rules 4.4.7 Continuing obligations and access to information 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 Corporate Governance 4.6.1 UK Corporate Governance Code 4.6.2 The Corporate Governance Statements 4.6.3 The UK Stewardship Code 4.6.4 Other reports (i) The Walker Report (ii)The Smith Report (iii) The Higgs Report (iv) The Committee of Wise men (v) The Myners report on Institutional Investment in the UK The Takeover Panel 4.7.1 Introduction 4.7.2 Membership of the Panel 4.7.3 Function of the Panel 4.7.4 The City Code on Takeovers and Mergers (i) What determines when to apply the City Code (ii)Principles of the City Code (iii) The Rules of the city code Regulatory Announcements 4.8.1 Categories of Announcement 4.8.2 Primary information providers (PIPS) 4.8.3 Distribution Process 4.8.4 Monitoring 4.8.5 Secondary Information Providers (SIPS) The AIM Rules Summary of United States Regulation

4.10.1 US Securities and Exchange Commission (SEC) (i) Creation of the SEC (ii)Role of the SEC 4.10.2 Laws that Govern the US Securities Industry 4.10.3 Regulation Fair Disclosure (Regulation FD) 4.10.4 Sarbanes Oxley Act 2002 4.10.5 Dodd Frank Act Candidates will be expected to display a good working knowledge of the system for regulatory announcements.

5.
5.1

Accounting Valuation and Investment Principles

Introduction 5.1.1 What the section will cover 5.1.2 Structure of this section Time value of money 5.2.1 Present value & discount factors 5.2.2 Net Present Value/ Internal Rate of Return Valuation models and measures 5.3.1 Dividend Discount Model 5.3.2 Dividend Growth Model 5.3.3 Enterprise Value 5.3.4 Shareholder Value Analysis 5.3.5 Sum of the parts valuation Portfolio Theory 5.4.1 Key Concept of Portfolio Risk 5.4.2 Types of risk specific risk and market risk 5.4.3 Beta 5.4.4 Alpha 5.4.5 Modern Portfolio theory 5.4.6 Capital Asset Pricing Model (CAPM) Accounts 5.5.1 The Use of Accounting Data in Valuations of Companies 5.5.2 Key Issues from the use of accounting data 5.5.3 Forecasting business drivers 5.5.4 Financial statements (i) Accounting standards (ii) Balance sheet (iii) Income statement & Profit and Loss (iv) Cash Flow statements 5.5.5 Key Financial Ratios (i) Liquidity ratios (ii) Financial gearing (iii) Profitability and Operating ratios 5.5.6 Returns in comparison to levels of investment (i) Return on Capital Employed (ROCE) (ii) Return on assets (ROA) (iii) Return on equity (ROE) Price-Earnings Ratio (P/E Ratio) 5.6.1 Price- Earnings Ratio (P/E Ratio)

5.2

5.3

5.4

5.5

5.6

5.6.2 5.6.3 5.6.4 5.6.5 5.6.6 5.6.7 5.6.8

Price to Book Value Ratio EV/EBITDA Dividend Yield Earnings per share (EPS) Dividend Cover Net Asset Value (NAV) Market Capitalisation

Focus will be upon the UK with a very much lower lesser level of knowledge required of overseas practice, in proportion to the importance of each area to investor relations in the UK. 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.