The organisational structure of market participants should ensure a strict segregation between front and back office of:
A. Duties and reporting lines.
B. Systems.
C. Career paths.
D. All of the above.
The use of mobile phones within the dealing room is not considered good practice except
A. In volatile markets.
B. When dealing with emerging markets.
C. In an emergency.
D. When quoting for information only.
Bank XYZ calls you for a quote in EUR/USD for EURO 20 million. If you decide to quote to Bank XYZ: A. You must be prepared to deal up to EUR 20 million.
B. You may quote without stating the amount you are prepared to deal.
C. You are only committed to deal in a marketable amount.
D. None or the above.
If a dealer has interest on one side, and the other side is dealt away, the broker should:
A. Immediately put the price "under reference" and check with the dealer to ascertain his original intention.
B. Cancel the order.
C. Continue with the order.
D. None of the above.
When a broker calls "off" at the very instant a dealer "hits" the broker's price:
A. The transaction should be concluded.
B. The broker decides whether or not the deal is done.
C. ACI's Committee for Professionalism will decide whether the transaction should be concluded.
D. The transaction should not be concluded.
Under which circumstances are banks allowed to park positions with a counterparty?:
A. It is forbidden to park positions.
B. In conditions of exceptional volatility.
C. If the two counterparties agree.
D. If approved by senior management.
In a dispute between the dealer and a broker, the Model Code recommends that this should be referred in the first instance to:
A. Central bank.
B. Senior management of the bank and the brokerage firm.
C. Head of compliance.
D. ACI's Committee for Professionalism (CFP).
The term "under reference" refers to:
A. An unavailability of credit limit for the counterparty.
B. The need to reconfirm a transaction.
C. The unacceptability of the counterparty's name.
D. The rate quoted is going to be revised.
The use of standard settlement instructions (SSI's) is strongly encouraged because:
A. It reduces operational risk.
B. It splits differences arising from failed settlement between the two counterparties.
C. It removes the need for sending out SWIFT payment authorisations.
D. All of the above.
Bank B's price is shown by a broker to Bank A and is dealt by Bank A. If Bank A wants to increase the amount of the transaction, what is good market practice according to the Model Code:
A. Bank A can call Bank B directly.
B. Bank A should wait 10 minutes before calling Bank B.
C. Bank A cannot increase the amount.
D. Bank A should go back to the broker.
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