Corporate Finance Profession

Thinking of becoming a Corporate Finance Professional?

Are you aspiring to become a Corporate Finance Specialist professional but not sure what the future holds? If so, you need to understand some key difference between the regulation in India and other countries and the range of services covered under Corporate Finance. This may assist you in choosing the right career path for you.

Corporate Finance Profession in India

In India, anyone can conduct the Corporate Finance activities as it is not specifically regulated and there are no specific educational qualifications or experience requirements from the professional bodies to engage in 'Corporate Finance' activities.

Corporate Finance in Developed Economies

However, in most western countries (UK, USA, Australia, Canada, New Zealand, Singapore etc) Corporate Finance is a regulated activity. One would need to be specifically granted licence or authorisation in order to conduct 'Corporate Finance' activities as these are classified as "regulated activities" and there are strict compliance requirements.

In the UK, the Financial Conduct Authority (FCA) (previously Financial Services Authority), regulate all 'Corporate Finance' activities. In order to obtain FCA approval, there are specific educational and experience requirements that would need to be met. Further, depending on the activity that you would like to conduct, there will be minimum 'capital adequacy' requirements. The Chartered Institute for Securities and Investments (www.CISI.org.uk) run financial services related courses that meet the requirements of FCA.

Compliance Requirements in the UK

If you qualify to become an authorised and regulated Corporate Finance professional in the UK, there are a number of mandatory compliance requirements including complying with all the requirements of FCA, Anti-Money Laundering Act, EU Data Protection Act, UK Bribery Act etc. These long lists of compliance requirements may look daunting however, they also enable you to demonstrate to your clients that you are a trust-worthy law abiding professional who cares about high quality service to the clients.

Barrier to Entry brings Opportunities

Even though, one might look at this regulatory requirements as "red tape" "burdon" etc, it also offers distinctive advantage if you can qualify to get the licence or authorisation to conduct "Corporate Finance" activities.

As Micheal Porter had stated in his FIVE competitive forces, where the "entry" is easy, there will be huge competition as anyone can enter into that business or activity. In India, Corporate Finance is conducted like real estate broker business - anyone with any or no qualification or experience can call themselves as "Corporate Finance Professional". This ease of "entry" results in huge competition driving down the earning potential and profit margins potentially damaging the reputation of the Corporate Finance Profession.

On the other hand, in the UK, it is not easy to become a Corporate Finance professional and therefore, if you are able to obtain the authorisation from the FCA, you are able to command decent fee for your services and offer higher quality service to the clients.

Range of Corporate Finance Activities

In India some people think that Corporate Finance is simply a broker job - introducing a business requiring finance with a financial institution (banks, investment firms etc). However the reality is that Corporate Finance has broad range of services including mergers & acquisitions, strategic alliance, joint venture, equity finance, debt finance, commercial paper funding, company sale, management buy-in, management buy-out, company restructure, new market entry strategy etc.

Some global perspective to 'Corporate Finance Profession' and high level overview of the broad range of services covered under 'Corporate Finance' to provide an option for young Indian CAs.

Regards

Hari Iyer

Corporate Finance Professional authorised and regulated by the Financial Conduct Authority, UK

Fellow member of CPA Australia, Fellow member of Hong Kong CPA, Chartered Fellow of Chartered Institute for Securities and Investments (UK), Public Practice member of the Chartered Institute of Public Finance & Accountancy (UK), MBA (Australia)

www.hadigyfinance.com

hari.iyer@hadigy.com