Capital Markets
Understands the capital markets, the major players in capital markets, and their relation to the organization.
Level 1 Introductory: Demonstrates introductory understanding and ability and, with guidance, applies the competency in a few, simple situations. Can direct people to the appropriate source for further information.
BEHAVIORS
- Describes the elements of capital markets.
- Identifies sources for basic information and research on current and past behavior of relevant capital markets.
- Describes basic factors that can make access to capital markets more or less favorable to the organization.
- Calculates basic financial ratios and statistics typically used in the analysis of organizations accessing capital markets.
QUESTIONS
- Describe a time you had to research the behavior of capital markets?
Probing Questions
* What information did you research?
* What sources did you use for your information?
* What elements of capital markets were most important for your research?
* What were the results of your efforts?
- Describe a time you were responsible for calculating financial ratios.
Probing Questions
* What was the circumstance?
* What were the ratios being used for?
* What ratios did you calculate? Why were they important?
* What were you able to conclude based on your calculations?
Level 2 Basic: Demonstrates basic knowledge and ability and, with guidance, can apply the competency in common situations that present limited difficulties.
BEHAVIORS
- Describes the basic operation of capital markets and basic securities that are bought, sold and exchanged on the markets – including both equity securities and fixed income.
- Identifies the difference between equity and debt as sources of capital, and their differing evaluation metrics.
- Identifies the roles of the major players in capital markets (i.e., institutional investors, analysts and broker/dealers).
QUESTIONS
- Describe a time when you researched security products in different capital markets.
Probing Questions
* Why did you need to do this research?
* How did you go about collecting the information?
* What was your finding? What products did you find? Who were the providers?
* How was your finding used?
Level 3 Intermediate: Demonstrates solid knowledge and ability, and can apply the competency, with minimal or no guidance, in the full range of typical situations. Would require guidance to handle novel or more complex situations.
BEHAVIORS
- Describes the current marketplace for securities relevant to the organization and how they are evolving.
- Identifies obvious trends in the marketplace for the organization’s securities and the effects that may have on the organization.
- Monitors the investment style of investors and analysts important to the organization.
QUESTIONS
- Can you describe a time you were involved in identifying and monitoring investors and/or analysts that were important to your company?
Probing Questions
* Who were those investors and/or analysts?
* Why were they important to the company?
* How did you identify what their requirements were?
* Do you think you identified and satisfied their requirements well? Why or why not?
- Tell me about a time when you identified a new or changing trend in capital markets that might have relevance to the organization.
Probing Questions
* What was the new or changing trend?
* How did you identify it?
* How do you think it might be relevant to the organization?
* What was the result of identifying this trend?
Level 4 Advanced: Demonstrates advanced knowledge and ability and can apply the competency in new or complex situations. Guides other professionals.
BEHAVIORS
- Uses knowledge of investment styles to attract investors who are most suitable for the organization.
- Builds relationships with investors (including analysts and institutions) to create a positive view of the organization in the investment community.
- Recommends equity, debt, and hybrid instruments to meet the organization’s financing requirements.
QUESTIONS
- Describe a time when you were responsible for developing investor or other stakeholder relationships.
Probing Questions
* Who was the investor or stakeholder?
* How did you manage the relationship?
* What information did you provide? What information were you prohibited from providing? Why?
* Do you think you were effective in managing the relationship?
- Tell me about a time when you made a recommendation on financing through the capital markets.
Probing Questions
* What was the recommendation?
* How did you arrive at your recommendation?
* What information did you consider?
* How did you frame and communicate your recommendation?
* What was the result?
Level 5 Expert: Demonstrates expert knowledge and ability, and can apply the competency in the most complex situations. Develops new approaches, methods or policies in the area. Is recognized as an expert, internally and/or externally.
BEHAVIORS
- Proactively engages suitable investors and analysts.
- Uses knowledge of capital markets and its participants to drive investment in the organization.
- Influences investment community to create a positive impression of the organization.
- Advises senior management on the organization’s equity and how the organization’s actions influence investor interest.
- Develops new equity, debt and hybrid instruments to take advantage of trends in capital markets and to meet the organization’s financing requirements.
QUESTIONS
- Describe a new or improved equity or debt instrument that you developed or were involved in.
Probing Questions
* What needs or gaps was the instrument intended to fill?
* What information did you consider when developing the instrument?
* Who else was involved in this project?
* What was the result?
- Can you tell us about a time you managed a difficult or unhappy stakeholder?
Probing Questions
* What was the circumstance?
* Why was it important to manage this stakeholder?
* What did you do?
* Do you think you were effective in managing the relationship? Why or why not?