The real CFA course

FINANCIAL EDUCATION

Indian students and professionals are probably familiar with the CFA programme conducted by the Institute of Chartered Financial Analysts of India (ICFAI) which operates from Hyderabad.

But the ICFAI has no association with the original CFA Institute, which is headquartered in Charlottesville, Virginia, US. The CFA Institute was known as AIMR (Association for Investment Management and Research) till recently.

According to Sharon J Glover, vice-president and associate general counsel, CFA Institute, "The US courts have ruled in our favour (in the case over the issue of charters). We are awaiting an injunction from the Indian courts." The CFA Institute is the only entity authorised to award CFA charters worldwide.

As on June 5, 2004, out of the 83,000 current and aspiring investment professionals from 141 nations and territories who had enrolled for the CFA, 1,331 candidates were from India.

Sharon said: "The CFA Institute had our largest number ever of Indian candidates taking the examination this year. This signifies the growing recognition for the CFA charter as the global standard for investment professionals."

The CFA programme (of the CFA Institute) is a graduate-level, self-study curriculum and examination programme for investment professionals especially securities analysts, money managers and investment advisors. In order to obtain a charter, you have to have a bachelor's degree.

However, you can join the programme prior to that. A minimum work experience of three years is also essential for the charter to be awarded. The institute is planning to increase this requirement to four years from 2007 onwards. There are three levels to the programme.

The Level I study programme emphasises on tools and inputs, and includes an introduction to asset valuation and portfolio management techniques.

The Level II study programme focusses on asset valuation and includes application of the tools and inputs (including economics, financial statement analysis, and quantitative methods) in asset valuation.

The Level III study stresses on portfolio management and includes strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, derivatives, and alternative investments for both individuals and institutions.

Candidates have to pass three sequential and six-hour examinations in two years. Level I is offered twice a year "" in June and December. Levels II and III are offered once a year, in June.

Test centres are located worldwide. The CFA charter can be obtained in a minimum of two years though candidates take an average of over four years.

The institute does not have a representative office in India and help is generally provided by existing charter holders.

Sharon said that the institute is in the process of creating a society that would assist local candidates. Details regarding the fee structure, brochures and programme details can be obtained from the institute's website "" www.cfainstitute.org.

Statistics show that the pass percentage across all three levels is around 50 per cent.

HOW TO JOIN: There are registration fees and enrollment fees to be paid by the candidates. However, registration has to be paid only by new candidates. Returning candidates have to pay only the enrollment fees. The fees go up periodically.

For instance, candidates wishing to enrol before August 16, 2004, will have to pay a registration fee of $375 and enrollment fee of $425 bringing the total fees to $800.

Those wishing to register before September 13, 2004, will have to shell out $450 for registration and $650 for enrollment, which means a total of $1100. All fees are to be paid in US dollars. So international candidates (read, non-US) would be better-off paying by credit card.