ACI Dealing Certificate

The overall objective of this topic is for candidates to understand the functions performed by financial markets in the economy and to explain its different segments, their scope and instruments. Candidates will be able to understand the basic concepts of efficient markets and the impact of regulation and codes in financial markets. Referring to the life cycle of a typical financial market transaction, candidates will be able to explain its main phases.

The overall objective of this topic is for candidates to understand and to be able to explain basic foreign exchange rate quotations, their terminology, mechanics and the principal risks associated with FX spot and forward instruments. At the end of this section, candidates will be able to define the relationship between forward rates and interest rates, explain the use of FX outright forwards for foreign currency risk management and the use of FX swaps in rolling spot positions, hedging FX outright forwards, and in creating synthetic foreign currency assets and liabilities. Candidates will be required to perform basic calculations for FX market instruments. The candidates will be able to describe NDFS and, explain their rationale. Candidates will be able to understand and identify quotations for precious metals, and also demonstrate a basic understanding of the structure and operation of precious metals` financial markets.

The overall objective of this topic is for candidates to understand the principles of the time value of money, the function of the interest rates markets, the characteristics of the main types of money market instruments and interest rate capital markets instruments, as well as how they satisfy the requirements of different types of borrowers and lenders. Candidates will need to be able to calculate short-term interest rates and to perform standard calculations using quoted prices. Candidates will understand the basic characteristics and applications of a forward curve and of a yield curve and will be required to calculate them. At the end of this topic candidates need to be able to understand and outline the main features of bonds, particularly how they can be structured, priced and used as a key element in repo markets. Given the greater inherent complexity of repo instruments, candidates are required to be able to explain and calculate repo instruments issues and problems.

The overall objective of this topic is for candidates to understand how derivatives work and their function in financial markets. Candidates will be able to describe the mechanics of currency derivatives, how to use them and the fundamentals of currency options. Candidates will be able to identify basic currency option products and understand their purpose. Candidates will be able to describe the mechanics of interest rate derivatives, how to use them and the fundamentals of interest rate options. Candidates will be able to identify basic interest rate option products and understand their purpose. The candidates need to be able to perform basic calculations referring to the derivatives products included in the Syllabus.

The overall objective of this topic if for candidates to understand the importance that risk has in defining the financial institutions› business models and to understand the relevance of effective risk management framework as a key driver for sustainability of the business. Candidates will understand and be able to explain and identify major risk groups: market, credit, liquidity, operational, legal, regulatory and reputational risk; and to understand the significance of risk groups for different financial markets› businesses and organizational units. Candidates are expected to outline the methods and procedures needed to measure and manage these risk types. Candidates will be required to outline the framework for Asset and Liability Management as an integrated balance sheet and risk management concept and to understand the importance of the Basel Accords for risk management issues.