MQM1RC02-Financial Markets and Instruments for Regulators

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Terms in which taught: Spring term module
Non-modular pre-requisites:
Modules excluded:
Current from: 2021/2

Module Convenor: Dr Alfonso Dufour

Type of module:

Summary module description:

This module is for students studying the MSc in Regulation and Compliance (Degree Apprenticeship) only.

This module begins with an overview of the trading industry and core elements of financial markets. It identifies key market participants and important market qualities: orderliness, transparency, efficiency, liquidity and stability. A framework for comparing alternative market structures is developed. The module introduces and discusses the main models for valuing financial assets and reviews properties and applications of sophisticated financial instruments such as futures and options. Finally, students are guided to reflect upon policy responses to the challenges created by anomalies and technological innovations which may lead to fragmentation, illiquidity, extreme events, excessive volatility and market abuse.


This module seeks to expose students to scholarly thought underpinning the varied topics within the broader heading of financial markets and financial instruments. The module will also aim to develop a deep appreciation of established and more current practices in the operation of markets and instruments, so that students are able to critically evaluate and challenge market practices acquiring essential skills for compliance officers and regulators.

Assessable learning outcomes:

By the end of the module, students should be able to:

  • Explain and apply the theory and market practice of trading in financial markets.

  • Critically assess why and to what extent markets need regulation in order to function efficiently.

  • Recognise the main ways in which market operations may lead to sub-optimal results or even market abuse.

  • Explain and discuss the extent and varie ty of instruments and securities traded in modern markets.

Additional outcomes:

  • Understand the structure of the programme (including how the apprenticeship and professional qualification are integrated with the academic content)

  • Be aware of the nature of the assessments and best practice for essay writing and sitting exams.

Outline content:

The module begins by covering the concepts required for looking at the motives, expected conduct and desired outcomes in orderly, efficient, stable markets. Anomalies, recent advances and the methods used to obtain competitive advantage are then examined so as to reflect upon the challenges of disorder, inefficiencies, extreme circumstances, excessive volatility and instability. This builds upon consideration of the primary and secondary markets, the main market participants and the key instr uments that are traded in the markets. This will be presented and discussed in the framework of defining the different types of markets in which financial instruments are traded including listed stock, bond and derivative markets and will also include study of the OTC markets. Policy responses to the challenges that regulators can reasonably expect firms and market participants to avoid or prevent will be discussed.

There are eight core lectures supplemented by seminars and w orkshops:

  1. Trading industry and key concepts

  2. An introduction to trading and trading simulations

  3. Market structures: Single-price call and continuous auctions

  4. Trading book and market abuse: Case studies, detection and prevention

  5. Asset pricing models

  6. Derivatives and arbitrage

  7. Liquidity, price discovery and high frequency trading

  8. Blockchain technology and cr yptoassets

Brief description of teaching and learning methods:

Taught content for this module will primarily be delivered through lectures and syndicated learning, which will be delivered in four full-day sessions either at Henley Business School or at a central London location. Relevant materials and learning will be shared through the Virtual Learning Environment (VLE) that is intended to facilitate and aid the students’ learning journey within the MSc Programme. Students will also be expected to conduct substantial guided independent learning us ing materials available via the university library.

Contact hours:
  Autumn Spring Summer
Lectures 16
Seminars 8
Guided independent study:      
    Wider reading (independent) 70
    Wider reading (directed) 20
    Exam revision/preparation 26
    Advance preparation for classes 20
    Essay preparation 24
    Reflection 16
Total hours by term 0 200 0
Total hours for module 200

Summative Assessment Methods:
Method Percentage
Written exam 60
Written assignment including essay 40

Summative assessment- Examinations:

One two hour closed book exam (weighted at 60% of the final mark)

Summative assessment- Coursework and in-class tests:

One 2,000 word coursework essay on a set topic, submission date one or two weeks after the final session.

Formative assessment methods:

Students will be able to assess their level of understanding during the simulated trading day. There will be an exam preparation and revision session in the final class. Students will have the opportunity to review their knowledge on the VLE and in discussion with the apprenticeship tutor.

Penalties for late submission:

Submission of coursework by your original deadline date or formally agreed extension to deadline date will not incur penalties. 

Submission of coursework within 30 calendar days of your original deadline date (or formally agreed extension to deadline date) will incur a 10 marks reduction. 

Submission of coursework more than 30 calendar days of your original deadline date (or formally agreed extension to deadline date) will incur a zero mark. 

Assessment requirements for a pass:

50% weighted average mark

Reassessment arrangements:

Reassessment by 100% exam (capped at 50%); to be submitted within 6 weeks of notification of module failure, date dependent on cohort entry and to be advised by the Programme Administrator.

Additional Costs (specified where applicable):

Last updated: 14 June 2021


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