The Future of Fund Management in India 1997
Bombay, 23rd & 24th April 1997

"Opening"
Session 01 - 23rd April, 1997
8.45 am to 11.10 am

"Performance Evaluation"
Session 02, 23rd April, 1997
11.30 am to 1.20 pm

The starting point of the new approach to fund managment is explicit methodologies of performance evaluation. Here, the trace record of a fund is reduced to numerical measures of quality, after adjusting for the level of risk adopted and statistical noise. Such methodologies would (for example) be able to correctly compare the returns obtained by a mostly-debt-oriented and a mostly-equity0oriented fund, even though their levels of risk and return are apparently quite different. The presentations in this session would report upon experiences of applying performance evaluaation procedures to Indian funds using data from the last few years.

Moderator
Dr. Ajay Shah, IGIDR

Panelists
Mr. A.P. Kurian
Chairman, Investor Awarness Committee, AMFI

Mr. Vivek Reddy
Chief Executive, ITI Pioneer AMC Limited

Ms. S. Firodia Motwani
BARRA International Limited

Mr. RNK Prasad
Mutual Fund Specialist, Price Waterhouse / USAID FIRE Project

Presentations
A tutorial in performance evaluation
Dr. Susan Thomas
Indira Gandhi Institute of Development Research

CRISIL's work in performance evaluation
Mr. Vivek Kulkarni, IAS
Deputy General Manager, Advisory Services Group
Credit Rating Information Services of India Limited

Performance Evalution of Indian Funds
Ms. Julie Hudson
Associate Director, Asian Single Country Funds Research
SBC Warburg, London

Panel Discussion followed by questions and answers

"Index Construction"
Session 03, 23rd April, 1997
2.00 pm to 4.00 pm

Whether we discuss performance evaluation, passive management, active management or derivatives, market indices play a key role in the new approaches towards fund mnangement. Hence index construction becomes an important issue which underlines the choice of index used in a given application. The presentations in this session will deal iwth the major alternative market indices in India, and discuss their suitability for a variety of potential applications


Moderator
Dr. Ajay Shah, Professor, IGIDR

Panelists
Mr. Gordon Morrison
Director, Portfolio Trading Group, SBC Warburg, London

Dr. Joseph Mariathasan
Director, Commercial Union Investment Management Limited, UK

Dr. Nachiket Mor
Senior Vice President, The ICICI Limited

Presentations
Liquitdity Considerations in Index Construction
Dr. Susan Thomas
Indira Gandhi Institute for Development Research

The Nifty Family
Mr. Ashishkumar Chauhan
Vice President, national Stock Exchange of India Limited

Market Indices from the BSE
Dr. AB Rastogi
Research & Training Centre, The Stock Exchange, Mumbai

CRISIL's work in Index Construction
Ms. Anjali Forbes
Asst. General Manager, Head-Capital Markets Group
Credit Rating Information Services of India Limited

Panel discussion followed by questions and answers


"Money Market Mutual Funds"
Session 04, 23rd April, 1997
4.20 pm to 7.15 pm

A new area which has opened up in the past year is in mutual fund schemes which invest in the money market. A variety of unique issues and challenges have been faced by the pioneers who have embarked on the creation of money market mutual funds. This session will give usa view of this uniquely important part of the mutual fund industry.

Moderator
Dr. Ajay Shah, Professor, IGIDR

Panelists
Mr. U.R. Bhat
Director & CIO, Jardine Fleming India Asset Management Limited

Mr. Vijay C. Advani
Chief Executive Officer, Templeton Asset Management (I) Pvt. Ltd.

Mr. S.V. Prasad
President & CEO, J.M. Capital Management Limited

Mr. Vishnu Deuskar
Country Treaurer, ABN-AMRO Bank

Presentations
UTI's Experience with MMMFs
Mr. M.M. Kapur
Executive Director, Unit Trust of India

KPMF's Experience with MMMFs
Chief Executive, ITI Pioneer AMC Limited

Panel Discussion followed by questions and answers

Summing up of discussions by Dr. Ajay Shah

"Passive Management"
Session 05, 24th April, 1997
9.30 am to 12.30 pm

Mutual funds have fared poorly, worldwide, in performance evaluation against market indices. A logical conclusion reached by many investors has been to place their money in index funds instead of using active management. This session examines the implementation issues in index funds in India.

Moderator
Dr. Ajay Shah, Professor, IGIDR

Panelists
Mr. MP Radhakrishnan
Managing Director, SBI Funds Management Limited

Mr. Alok Vajpeyi
Director, BZW Limited

Dr. Nachiket Mor
Senior Vice President, The ICICI Limited

Mr. Ashishkumar Chauhan
Vice President, National Stock Exchange of India Limited

Presentations
Opening remarks by Dr. Ajay Shah

Alternative Kinds of Index Funds
Dr. Joseph Mariathasan
Director, Commercial union Investment Management Limited

Trading in Index Fund Management
Mr. Gordon Morrison
Director, Portfoli Traing Group.
SBC Warbrg, London

Basket Trading at UTI Securities
Mr. M.K. Khanna
Managing Director
UTI Securities Exchange Limited

An India Managed Index Fund : A Case Study
Dr. P.J. Nayak
Executive Trustee, Unit Trust of India

"Activ Management: Use of Derivatives
Session 06, 24th April, 1997
1.30 pm to 3.30 pm

With the impenind onset of index derivatives in India, one new form of active managment which will become possible is based on using index derivatives. So far, managers have directly dealt with underlying securities, which tend to be relatively illiquid. Index derivatives are likely to be highly liquid and the index is strongly correlated with every equity portfolio. This will make possible a variety of methods and approaches towards fund management, which are not currently feasible.

Dr. Ajay Shah, Professor, IGIDR

Panelists

Mr. M.M. Kapur
Executive Director, Unit Trust of India

Mr. SV Prasad
President & CEO, JM Capital Management Limited

Mr. Ashishkumar Chauhan
Vice President, National Stock Exchagne of India Limited

Mr. S. Subramanian
Director, Hoare Govett (India) Securities Limited

Presentations

A Tutuorial in Index Derivatives
Dr. Susan Thomas
Indira Gandhi Institute of Development Research

Trading on the cash and derivatives markets
Mr. Gordon Morrison
Driector, Portfolio Trading Group
SBC Warburg, London

Using Index Derivatives for Guaranteed Return Funds
Dr. Joseph Mariathasan
Director, Commercial Union Investment Management Limited

Panel Discussion followed by questions and answers

"Implementations"
Session 07, 24th April, 1997
3.50 pm to 6.00 pm

Once investment decisions are made, the portfolio manger faces the challenge of implementatiion. how can the desired trades be dexecuted at the lowest possible cost to the fund? This is a question which assumes extreme importance in the light of modern performance evaluation procedures, where the smalles differences in performance generate significant differences in ranking. Various issues that are faced here include information-based trading vs market making, the phone market vs the screen, optimisation of ths use of screen, the enormous post-trade costs (where the depository has a major impact).

"Opening"
27th May, 1997, 8.15 am to 10.35 am

Moderator
Dr. Ajay Shah, Professor, IGIDR

Panelists
Mr. Andreas K Rathmann
Assistant General Manager, Deutsche Bank AG

Mr. Anil Narang
Executive Director, Morgan Stanley Trust Company

Presentations
Implementation & Fund Performance
Dr. Ajay Shah
Indira Gandhi Institute of Development Research

Quantifying Post-trade Transaction Costs
Mr. Gagan Rai
Executive Director
National Securities Depository Limited

Panel discussion followed by questions and answers

Conference Summing up by Dr. Ajay Shah

Close of discussions

Deomonstartion : Information Technology Solutions for the Securities Industry

Welcome Address
Mr. Gautam Bhardwaj
Director, Invest India Economic Foundation

Inaugural Address
Dr. C. Rangarajan
Governor, Reserve Bank Of India

Keynote Address
Mr. George Ugeux
Group Executive Vice President, International & Research
New York Stock Exchange, Inc.

Deomonstration : Information Technology Solutions for the Securities Industry

"The Brokerage Industry"
Technical Session 01 - 27th May, 1997
11.00 am to 2.45pm

The Evolution of exchanges in India in the last three years has led to a sea change in the functioning of brokerage companies. Brokerage for both retail and institutional customers now works in very different ways as compared with the status as of 1993. Brokerage today is a keenly competitive industry which can scale up to nationwide operations, is a highly technology - driven activity, and brokerage companies face considerable risks through bankruptcy on the part of their customers. Because brokerage companies are the first to be affected by stolen or forged paper, they are the first adopters of the new technology of settlement, i.e the depoistory.

In this session, we have presentations by some of the most interesting business plans in India's brokerage industry, which will help us better understnd the challenges faced in the brokerage area.

Session Moderators

Mr. Joseph Massey
Managing Director, Indian Stock exchanges Services Corporation Limited

Mr. T. Koshy
Vice President, National Securities Depository Limited

Panelists
Mr. Ramesh C Mathur
Executive Director, The Stock Exchange, Mumbai

Mr. Jaspal Singh
President, The Ludhiana Stock Exchange Association Limited

Presentations
Mr. Mahendra N Kampani
Partner, Jamnadas Morarjee & Co.

Mr. M.K. Khanna
Managing Director, UTI Securities Exchange Limited

Mr. Arjun Kapoor
Member, Delhi Stock Exchange Association Limited

Panel Discussion follwed by questions and answers

"Competition Between Exchanges"
Technical Session 02 - 27th May, 1997
1.30 pm to 4.00 pm

The exchanges of India were once local monopolies, sheltered from competition by expensive telecommunications and inefficient post-trade procedures. Today, exchanges are competing providers of liquidity services in a truly national market. Each exchange faces the challenge of differentiating its product offerings in a way which attracts order flow from all over the country.

In this session, we look at the business plans of some key exchanges : what are the challenges that they face, and how do they propose to deal with them.

Ultimately the securities industry exisits in order to cope with the needs of liquidity services of final users. The two major kinds of users are institutional and retail. In thiss session, we have representatives of each of these categories speaking about their experiences in using the exchanges, the phone market, brokers and post-trade procedures. These speakers will also talk about the areas in which they would like the exchanges to alter thier functioning. For exchanges who seek to attract order flow, this session will give a sense of the really important issues from the viewpoint of users.

All of India's exchanges (other than OTCEI) use "futures-style settlement" on the so-called "spot market". The exchange runs a short-expiration futures market, and at the end of the settlement period, obligations are given to the clearing house. In this situation, payments crises are a pervasive danger, and the key challenge faced by India's exchanges is the development of clearing trades. Conceppts and practises developed on futures markets worldwide are directly applicable to developing clearing institutions in India : this involves strong systems for calculating and charging margins, and an overal risk-containment system which protects the integrity of the clearing corporation.

Session Moderators
Mr. Andreas K Rathmann
Assistant General Manager, Deutsche Bank AG

Mr. Himanshu Kaji
Chief Executive, Mangaldas Kaji & Co.

"Panelists"
Mr. S.S. Sodhi
Executive Director, The Delhi Stock Exchange Association Limited

Mr. P.C. Shrimal
President, Hyderabad Stock Exchange Limited

Mr. Vivek Mahajan
Director, Calcutta Stock Exchange Association Limited

Presentations
Opening remarks

Mr. Ravi narain
Deputy Managing Director, National Stock Exchange of India

Dr. A.B. Rastogi
Training & Research Institute, The Stock Exchange, Mumbai

Panel Discussion followed by questions and answers

"Depository"
Technical Session 05 - 28th May, 1997
11.00 am to 12.40 pm

India's securities industry has experienced a great deal of difficulty with fake and forged certificates. The Emerging Markets Factbook - 1996 by IFC rates India as among the worst markets in the world on settlement. The depositry is a key development which can bring low-cost settlement, and hence enable trading strategies which do not involve intra-settlement squaring off. In this session, we will look at the depository from the perspective of NSDL and stock exchanges, from the perspective of retail investors, and from the view point of trading for book-entry settlement.

Session Moderators
Mr. R. chandrasekaran
Former Managing Director, Stock holding Corporation of India

Mr. Joseph Massey
Managing Director, Indian Stock Exchanges Limited

Panelists
Mr. BB Merchant
Member, The Stock Exchange, Bombay

Mr. Ravi Narain
Deputy Managing Director, National stock Exchange of India Limited

Mr. Aditya Puri
Managing Director, HDFC Bank Limited

Mr. P. Sudhir Rao
Director, Karvy Securities Limited

Presentations

Mr. Gagan Rai
Executive Director, National Securities Depositry Limited

Mr. Sridhar Subasri
Executive Director, Global Trust Bank Limited

Panel Discussion follwed by questions and answers

"Surveillance"
Technical Session 06 - 28th May, 1997
1.30 pm to 4.00 pm

India's financial markets have been characterised by a widespread presence of market manipulation. In recent years, exchanges and regulators have become keen on establishment of procedures and systems which will reduce the profit rate in attempts at manipulation. This is particularly important from the viewpoint of an exchange which seeks to attract order flow; investors would prefer to work at an exchange with stringent surveillance procedures. In this session, SEBI and three prominent exchanges - NYSE, NSE and BSE - report on their approaches towards building surveillance procedures.

Session Moderators
Dr. AC Shah
Chairman, Gujarat Lease Financing Limited

Mr. Vijay Kamani

Panelists
Mr. SS Sodhi
Executive Director, The Delhi Stock Exchange Association Limited

Mr. Himanshu Kaji
Chief Executive, Mangaldas Kaji & Co.

Mr. Rakesh Jhunjhunwala
Member, The Stock Exchange Mumbai

Mr. V. Shankar
Director, Indian Stock Exchages Services Corporation

Presentations
Mr. James E Shapiro
Managing Director, Research & International
New York Stock Exchange, Inc.

Mr. L.K. Singhvi
Senior Executive Director
Securities Exchange of India Limited

Mr. Ravi Narain
Deputy Managing Director
National Stock Exchange of India Limited

Mr. S.T. Gerela
General Manager (Inspection & Surveillance)
The STock Exchange, Mumbai

Panel Discussion follwed by questions and answers