Click on the Detail Button to view the Formula Sheet. What does the Model Code say about netting?
A. Market participants are strongly recommended to net bilateral transactions with counterparties where activity justifies it.
B. Market participants should establish payments netting agreements with cross-border counterparties where activity justifies it.
C. Market participants should establish legally viable bilateral netting agreements with counterparties where activity justifies it.
D. Market participants should establish legally viable multilateral netting agreements where activity justifies it.
Click on the Detail Button to view the Formula Sheet. The Model Code recommends that, in the case of complaints about transactions, management should:
A. Ensure complaints are investigated by the senior management of a firm not involved in the disputed transaction.
B. Ensure complaints are fairly and independently investigated, in the first instance, by the ACIs Committee for Professionalism.
C. Ensure complaints are investigated by representatives of a broking firm not directly involved in the disputed transaction and selected by both parties to the dispute.
D. Ensure complaints are fairly and independently investigated, whenever practicable, by staff not directly involved in the disputed transaction.
Click on the Detail Button to view the Formula Sheet. If a broker refers to "the payer of 5-year euro at 4.12", what is this party doing?
A. Paying a fixed rate of 4.12% per annum on a 30/360 basis over 5 years in euros through an interest rate swap in exchange for receiving a floating rate of 6-month Euribor on an actual/360 basis reset semi-annually and paid in arrears.
B. Paying a fixed rate of 4.12% per annum on an actual/actual basis over 5 years in euros through an interest rate swap in exchange for receiving a floating rate of 6-month Euribor on an actual/360 basis reset semi-annually and paid in arrears.
C. Paying a 5-year euro deposit and receiving a rate of interest of 4.12% on an actual/360 basis.
D. Taking a 5-year euro deposit and paying a rate of interest of 4.12% on an actual/360 basis.
Click on the Detail Button to view the Formula Sheet. What is meant by "short dates"?
A. Maturities of less than one week.
B. Maturities of less than one month.
C. Maturities of less than one year.
D. Maturities in the same calendar month.
Click on the Detail Button to view the Formula Sheet. In all dealing conversations, the Model Code strongly recommends:
A. Dealers stick to market terminology in order to avoid the impression that they are offering an advisory or fiduciary role.
B. Dealers clarify what is being proposed rather than using any terminology that could be misinterpreted.
C. Dealers restrict themselves to terminology listed and explained in Chapter 11 of the Model Code.
D. Dealers define complex terminology in the confirmation of a deal.
Click on the Detail Button to view the Formula Sheet. A dealer has indicated his intention of assigning an interest rate swap to a third party soon after transacting that swap. When about to execute an assignment:
A. The dealer is entitled to provide the name of the original counterparty to the assignee.
B. The dealer is entitled to provide the name of the assignee to the original counterparty.
C. The dealer should seek the permission of the assignee before releasing the name to the original counterparty.
D. The dealer should seek the permission of the original counterparty before releasing the name to the assignee.
Click on the Detail Button to view the Formula Sheet. If a dealer has any intention of assigning an interest rate swap to a third party soon after transacting that swap:
A. The dealer should not reveal his future dealing intentions to his counterparty.
B. The dealer should make his intention to assign clear before transacting.
C. The dealer should agree the method of assignment before transacting.
D. The counterparty should specify whether or not assignment would be acceptable in negotiations.
Click on the Detail Button to view the Formula Sheet. You are quoting forward FX prices to a broker subject to finding a counterparty for a matching transaction. The Model Code says:
A. You must tell the broker, who must qualify your quotes.
B. For credit reasons, you must tell the broker when he presents a name.
C. You cannot do this.
D. The Model Code does not make recommendations on this subject.
Click on the Detail Button to view the Formula Sheet. Deliberately inputting incorrect big figures into an electronic dealing platform is:
A. Technically impossible on electronic platforms
B. Not an uncommon practice and something which professional dealers should be able to guard against.
C. Not good practice.
D. A criminal offence.
Click on the Detail Button to view the Formula Sheet. You deal over the phone with a counterparty. The subsequent confirmation differs from the terms agreed verbally. What is the result?
A. The confirmation takes precedence as it is a written contract.
B. The matter will have to be submitted to arbitration in order to establish the mutual intent of the parties.
C. It depends on local law.
D. The verbal agreement is binding.
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