Examination Plan & Certification

BSE Certification in Derivative Exchange
Objectives of the test To educate about the functioning of derivatives markets, the features of various products, the classification of products, the regulatory framework and the margining mechanism.
Why should one take this course? Securities and Exchange Board of India (SEBI) has made it mandatory for all brokers/dealers and sales persons desirous of trading in the derivatives market to get themselves certified from an institution approved by SEBI. BSE Certification on Derivatives Exchange (BCDE) is a SEBI-approved on-line testing process for this purpose.
Participants Profile Derivatives Dealers, Stock Brokers, High Net Worth Investors, Custodians, Mutual Funds, Portfolio Managers, Insurance Companies, Banks, Financial Institutions and Management Students
Certificate validity 3 years
Test details BSE conducts a test of 100 marks consisting of 60 questions. The questions are objective type having multiple choices, with a provision of negative marks for wrong answers.
BCDE is awarded to only those candidates who obtain a minimum of 60% marks.There is no minimum eligibility criterion for taking the test
Course outline
  • Principles of trading and hedging with Options

  • Terminology - call, put, writer, buyer, premium, intrinsic value, time value, expiry date, settlement date, strike price, ATM, OTM & ITM, The Greeks - (Delta, Gamma, Theta, Vega).

  • Risk management systems and procedures

  • Types of risks (Counter-party or credit risks, Market or price risks, Liquidity risks, Legal and regulatory risks, Operating risks), Risk identification and measurement, Methods of risk control (Position limits, VAR, Margins, Operating Procedures and systems etc.),

  • Separation of trading, settlement, accounting and risk control functions, Internal control structure and Management Information System, Regulatory and external reporting. Regulatory aspects, Accounting and taxation.

  • SCRA/Regulatory changes made and required, SEBI Act, LC. Gupta Committee report, Bye laws and special regulatory requirements of the derivatives market, Rights and obligations in broker-client relationships, Accounting of derivatives (Treatment of margins,

  • Valuation and accounting of closing position), Taxation of derivatives.

Duration 120 minutes
Training Duration & Timing  2 sessions of 5 hours training on consecutive Saturdays (1 pm to 6 pm) and 5 sessions of 2 hours (practice tests at participants convenience Monday to Friday - 11 am to 4 pm).