Credit institution

Investment bank

Corporate

Central Bank

-EUR 52,161.00

-t-EUR 47,839.00

-EUR 3,827.67

Nil

The number of EUR per USD

The number of USD per EUR

Depends on whether the price is being quoted in Europe or the US

Depends on whether the price is being quoted interbank or to a customer

EUR 11,035,336.41

EUR 11,035,351.74

EUR 11,039,752.32

EUR 11,039,767.65

quarterly tests I updates as needed

at least every second year

half-yearly tests / yearly updates

at least yearly

1.0352

1.0353

1.0347

1.0348

Unchanged

Move towards 28/31

Move towards 5 7/60

Insufficient information

An exchange of two streams of interest payments in different currencies and an exchange of the principal amounts of those currencies at maturity

A spot sale (purchase) and a forward purchase (sale) of two currencies agreed simultaneously between two parties

An exchange of currencies on a date beyond spot and at a price fixed today

An agreement to buy (sell) an amount of base currency value spot and simultaneously resell (buy back) the same amount to the same counterpart value today

SEK interest rates are higher than NOK interest rates

NOK interest rates are higher than SEK interest rates

NOK interest rates are higher than USD interest rates

SEK interest rates and NOK interest rates are converging

know whether the European Central Bank or the Federal Reserve is in the market before quoting

be sure that the quoting bank’s prices are not shared with other brokers

get the price from a bank or a bid and an offer from different banks in order to make a two-way price, because the broker cannot make prices on his own

make sure that the quoting banks have sufficient credit lines

H-15 Index

Prime Rate

Overnight Fed funds

Fed funds effective rate

solely those of the electronic trading platforms vendors

exclusively ACI’s Model Code Best Practices

ACI’s Model Code Best Practices and ICMA’s Market Practice & Regulatory Policy

the electronic trading platforms vendors’ and the ACIs Model Code Best Practices guidelines

They must remain neutral and stay out of disputes between their customers.

They must rely on the execution venue to resolve disputes.

They must delegate the resolution of broken trades downstream to their clients.

They must take responsibility for the swift resolution of any disputes.

that all telephone conversations (internal and external) be taped without informing counterparties

that only conversations undertaken by dealers and brokers should be recorded

that all conversations undertaken by dealers and brokers should be recorded, together with back office telephone lines used by those responsible for confirming deals or passing payments to other institutions

that only telephone conversations between dealers and brokers be recorded

A fixed-floating money market swap in which the floating rate is an overnight index fixed periodically over the term of the swap

A fixed-floating money market swap in which the floating rate is the mean of the overnight index over the term of the swap

A fixed-floating money market swap in which the floating rate is an overnight index compounded daily

A floating-for-floating rate swap in different currencies in which both floating rates are overnight indexes compounded daily

an exposure in Latvian Lats (LVL)

an exposure in Russian Rouble (RUB)

an exposure in Romanian Leu (RON)

an exposure in Bulgarian Lev (BGN)

EUR 5,798,982

EUR 5,799,497

EUR 5,746,376

EUR 5,000,694

XAU

XAG

XPT

XPD

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis.

If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

You pay JPY 440,694

You receive JPY 440,694

You pay JPY 438,882

You receive JPY 438,882

The transaction should be concluded.

The broker decides whether or not the deal is done.

ACI’s Committee for Professionalism will decide whether the transaction should be concluded.

The transaction should not be concluded.

EUR 25,962,011.01

EUR 25,959,714.91

EUR 25,948,878.47

EUR 25,948,648.82

Suspicious transactions should be reported by the principals.

Brokers need to make staff aware of the problem and exercise vigilance.

A broker should report any suspicions about a transaction to the other counterparty.

Brokers should advise clients to reject the name.

2.60%

2.75%

2.775%

2.813%

Establishing realistic daylight limits for counterparties.

Monitoring all payments to counterparties who are known to be experiencing difficulties.

Establishing legally binding bilateral netting agreements with counterparties or participating in a multilateral netting system.

Seeking pre-payment.

At that price.

At that price in a marketable amount.

At that price in a marketable amount with an acceptable name.

At that price in a marketable amount with an acceptable name and provided the market price has not moved excessively.

EUR

AUD

Depends on whether the price is being quoted in Europe or Australia

Depends on whether the price is being quoted interbank or to a customer

When the bank’s income is secured on the trade.

If the unsecured credit is taken into account.

It the bank knows the customer very well.

When there are written procedures and policies for such transactions.

Loss of GBP 17000

Profit of GBP 17,000

Loss of EUR 17,000

Profit of EUR of 17,000

EUR 5,798,982

EUR 5,799,497

EUR 5,746,376

EUR 5,000,694

Bought CHF against JPY spot and sold JPY against CHF 3-month forward

Sold CHF against JPY spot and bought CHF against JPY 3-month forward

Bought CHF against JPY spot and sold CHF against JPY 3-month forward

Bought JPY against CHF 3-month outright

Credit risk

Legal risk

Settlement risk

Basis risk

Extend the contract to the next business day

Shorten the contract to the previous business day

A new maturity date has to be agreed by the two parties involved

ACI’s Committee for Professionalism decides on a case by case basis

Always decline gifts.

Give the gift to charity.

Keepthe gift.

Report the gift to management.

HUG

HKD

HRN

HUF

Describe the parameters of a dealing relationship

Set out the rights and obligations of two parties

Apply to all transactions between two parties

All of the above

Positive, steepening

Positive, flattening

Inverted, steepening

Inverted, flattening

interest rate, currency, equity and commodity risk

interest rate, currency, equity and default risk

interest rate, equity, liquidity and default risk

legal, reputation and regulatory risk

EUR

JPY

HKD

AUD

A cash instrument

An exchange traded derivative

An interest rate derivative

A balance sheet instrument

theft of information

damage to an organization through loss of its reputation or standing

market manipulation

loss incurred from the use of incorrect documentation

1.73%

1.75%

1.77%

1.80%

A manual “kill button” to disable the system’s ability to trade and cancel all resting orders.

An ‘inbound message rate” feature that monitors the number of confirmation messages that are sent from trading venues within a specific time period.

A “repeated automated execution throttle” monitoring the frequency of strategies that are filled and then re-entered into the market without human intervention through automated trading systems.

A “fat-finger quantity” feature limiting the size of orders that can be sent from the trading systems and preventing order quantities above the fat-finger limit from leaving the system.

Nothing, as he changed the terms of the deal

EUR 5,000,000.00

More than EUR 5,000,000.00, but a maximum of EUR 8,000,000.00

EUR 8,000,000.00

149.66-74

149.69-71

63.52-53

63.51-54

Reviewed Supervisory Factor

Required Stable Funding

Riskless Stable Funding

Riskless Supervised Funding

27th December

30th December

31st December

1st January

to run a zero gap

to hold more interest rate sensitive assets than interest rate sensitive liabilities

to reduce the size of the balance sheet

to hold fewer interest rate sensitive assets than interest rate sensitive liabilities

frequency trading

high-incidence trading

flash trading

liquidity aggregators

the details of the transaction involved, the number of days the payment was delayed and the resulting cost

the details of the transaction involved, the number of days the payment was delayed and the cost, together with Central Bank rate to be applied

the details of the transaction involved, the number of days the payment was delayed and the cost, together with reference rates to be applied

the details of the transaction involved, the number of days the payment was delayed and the cost, together with the calculation methodology being claimed

adding up expected vault cash outflows, ATMs and other cash points operated by the institution across all branches

establishing a forward cash flow plan that takes account of all contractual and behavioral cash flows related to assets and liabilities

the net cash flow from investment activities in the IFRS consolidated Statement of Cash Flows for prior periods

subtracting short-term liabilities from short-term assets

Sold USD 5,000,000.00 at 1.5575

Sold GBP 5,000,000.00 at 1.5575

Bought GBP 5,000,000.00 at 1.5580

Bought USD 5,000,000.00 at 1.5580

Substantial opportunity for gain and limited risk of loss

Substantial risk of loss and substantial opportunity for gain

Limited risk of loss and limited opportunity for gain

Substantial risk of loss and limited opportunity for gain

GBP 7,551.37

GBP 6,544.52

GBP 5,537.67

GBP 1,006.85

within 2 hours after deal agreed with counterparty

before the value date of the trade

by the end of the trade date

within 24 hours

105.80

105.75

105.70

105.85

There is no need to inform new counterparties and clients that conversations will be recorded.

It is normal practice that tapes and other records should be kept for at least twelve months.

The periods for which tapes and other records should be retained should reflect the way in which the terms and conditions of transactions have been agreed, and the duration of transactions.

Dealers and other staff are reminded that telephones and electronic text messaging systems in the firm are intended for business and private use and that conversations and exchanges of text messages should be conducted in a casual manner.

at least 995/1000 pure gold; weight between 350 and 430 fine ounces

minimum 999.9/1000 pure gold; weight between 350 and 430 fine ounces

at least 995/1000 pure gold; weight of 400 fine ounces

minimum 995/1000 pure gold; weight of 400 fine ounces

He buys CHF 5,000,000.00 at 0.9423

He buys CHF 5,000,000.00 at 0.9426

He buys USD 5,000,000.00 at 0.9423

He buys USD 5,000,000.00 at 0.9426

0.60%

0.949%

1.074%

0.933%

EUR 620.83

EUR 868.06

EUR 968.06

EUR 2,183.33

The dealer is entitled to provide the name of the original counterparty to the assignee.

The dealer is entitled to provide the name of the assignee to the original counterparty.

The dealer should seek the permission of the assignee before releasing the name to the original counterparty.

The dealer should seek the permission of the original counterparty before releasing the name to the assignee.

They are forced to do so.

Explicitly authorised to do so by the counterparty.

They know the counterparty very well.

They are asked by their senior management to do so.

As quickly as possible.

Within 24 hours of the transaction.

Setore 10:00 am on the value date.

Betore close of business on the transaction date.

Gambling and betting between market participants should be strongly discouraged.

Gambling and betting between market participants can be allowed if it is monitored by management.

Gambling and betting between market participants should be forbidden.

All of the above.

21.5/21

210/215

215/210

21/21.5

Sell a 1x3 FRA at 1.95%

Buy a 1x3 FRA at 1.98%

Buy a 1x4 FRA at 2.10%

Sell a 1x4 FRA at 2.10%

Banks should not ask brokers to disclose details of third party transactions unless they are between overseas principals.

Banks should not ask brokers to disclose details of third party transactions unless these transactions are already settled.

Banks should not ask brokers to disclose transactions between third parties in any circumstances.

Banks should not ask brokers for details of third party transactions unless senior management has approved.

pay 250, receive 1,250, receive 1,750, receive 2,000

receive 250, pay 1,250, pay 1,750, pay 2,000

pay 2,500, receive 12,500, receive 17,500, receive 20,000

receive 2,500, pay 12,500, pay 17,500, pay 20,000

Credit risk

Market risk

Legal risk

Operational risk

Dealers may seek a compensation payment in favor of the bank or an adjustment to brokerage bills from the broker for switching names.

If requested by a broker to clear a transaction through name switching, a dealer must ensure that such activities have the prior approval of senior management.

The practice of name switching/substitution is neither acceptable nor desirable.

Name switching/substitution transactions should be executed as promptly as possible not considering credit limits and policy guidelines.

Within 24 hours of the deal.

Within two business days of the deal.

Before the value date.

As soon as possible.

Survive a liquidity crisis

Absorb credit losses

Absorb any type of unexpected loss

Absorb any type of expected loss

both parties to the dispute are members of the ACI and agree to submit the dispute to the ACI

one of the counterparties requests the assistance of ACI’s Committee for Professionalism

the two counterparties are located in different financial centers

the amount in dispute is more than USD 100,000.00 or equivalent

a swap

a cap

a swaption

a collar

(i), (ii), (iii), & (iv).

(i), (ii) & (iii).

(i) & (iii).

none of the above.

Technically impossible on electronic platforms

Not an uncommon practice and something which professional dealers should be able to guard against.

Not good practice.

A criminal offence.

an interest rate swap

a forward rate agreement

a short term interest rate future

an interest rate collar

The CD yields a higher rate of return

The CD has less credit risk

The CD is a transferable instrument

The CD has a shorter range of maturities

When trading in financial products described by the Model Code, dealers and voice brokers need not clarify whether they propose to use standard terms.

Standard terms and conditions should be signed bilaterally by senior management of both principals before any applicable market transactions are entered into.

When using legal agreements any proposed modifications or choices offered in the agreement must be clearly stated as soon as the trade is agreed.

For many instruments, standard master agreements issued by recognized authorities need not be signed by senior management of the principals intending to transact business.

A short call option + short put option with a higher strike price than the call option

A long call option + long put option with a lower strike price than the call option

A short call option + short put option with a lower strike price than the call option

A long call option + short put option with higher strike price than the call option

LIBID

LIBOR

EURIBOR

EURO LIBOR

reserve account and third-party insurance

subordinated tranches and creditworthiness of the originator

creditworthiness of the originator and third-party insurance

reserve account and interest rate hedging

Bank dealers should, wherever possible, give brokers prior indication of counterparties with whom they would be unwilling to do business.

Brokers may divulge the names of principals prematurely to induce a counterparty to transact.

Dealers should never give brokers guidance on the extent of their price differentiation across broad categories of counterparties.

When a principal’s name proves unacceptable to another principal, the broker is bound to divulge who refused it.

Sell a 1x3 FRA at 0.42%

Buy a 1x3 FRA at 0.45%

Buy a 1x4 FRA at 0.58%

Sell a 1x4 FRA at 0.54%

105.50

105.61

10555

0.009474

The broker must show the borrower’s name to the lender first and disclose the lender’s name only if the borrower is acceptable to the lender.

The broker must show the lender’s name to the borrower first and disclose the borrower’s name only if the lender is acceptable to the borrower.

The broker must show the borrower’s and lender’s names to each other at the same time.

For marketing reasons, the broker can show the lender’s name to the borrower at any time.

The Head of Operations has the sole responsibility of ensuring the correctness and validity of the SSI set up.

SSIs should be stored and maintained in the bank’s general static data system.

Each institution should have a separate SSI team to prevent I minimise the potential risk of fraud.

SSI staff should be fully integrated within Operations to insure consistent and reliable settlement guidelines.

Substantial opportunity for gain and limited risk of loss

Substantial risk of loss and substantial opportunity for gain

Limited risk of loss and limited opportunity for gain

Substantial risk of loss and limited opportunity for gain

only after consultation with the local regulator

only if the switching transaction is done at the current market rate

only provided that such transactions are identified as switching transactions

only after approval by the broker’s senior management

2.338%

2.650%

2.927%

2.992%

ensure that compliance is carried out efficiently

set limits on borrowing in the short-term markets to fund long-term lending

develop, evaluate, monitor and approve strategies related to risk due to imbalances in the asset and liability structure of the balance sheet

report to the board of directors

The best strategy to treat and mitigate risk is avoiding the risk by avoiding the business

The best strategy to treat and mitigate risk is transferring the risk to another party, e. g. by transfer to an insurance company

The best strategy to treat and mitigate risk is to establish the appropriate processes for identifying, assessing, managing, monitoring and reporting risks

The best strategy to treat and mitigate risk is to reduce the negative effect of the risk, e. g. by hedging

EUR 27,947,276.43

EUR 27,946,077.08

EUR 27,950,071.43

EUR 27,948,871.97

Receives compensation if a reference interest rate falls below an agreed level

Pays compensation if a reference interest rate falls below an agreed level

Receives compensation if a reference interest rate rises above an agreed level

Pays compensation if a reference interest rate rises above an agreed level

Raise USD interest rates

Lower USD interest rates

Lower reserve requirements

It could not squeeze you

Nostro reconciliations, the Cash Management Department and Operations

Front Office, the Cash Management Department and Operations

Front Office, Nostro reconciliations and Operations

Front Office, Nostro reconciliations and the Cash Management Department

A spot sale (purchase) and a forward purchase (sale)

A spot sale (purchase) and a forward sale (purchase)

An exchange of currencies on a date beyond spot and at a price fixed today

An exchange of currencies on a date beyond spot

cock dates

broken dates

odd dates

weird dates

In their function as intermediaries, banks must necessarily accept some degree of interest rate risk.

Banks incur interest rate risk to increase income

Banks prefer c red it risk to market risk.

If banks failed to take on interest rate risk they would not be able to meet the needs of their deposit and loan customers.

0.25%

0.375%

0.75%

0.50%

12-month AUD rates are higher than 12-month NZD rates

12-month AUD rates are lower than 12-month NZD rates

Spot AUD/NZD will be higher by approximately 50 points in 12 months

The AUD yield curve is positive, whilst the NZD curve is negative

open and effective communication channels between all levels of staff and cross-functions should be maintained.

regular internal audits should be carried out together with trading and risk management to ensure early identification of internal control weaknesses

complete segregation of duties between the front, middle and back office activities

a separate system for independent monitoring to ensure compliance with the risk management framework should be in place

0.9278-73

1.0784-78

1.0778-84

1,0773-78

Seller

Buyer

Issuer

It depends on the agreement between the buyer and seller

Gradual positive slope

Steep positive slope

Flat

Inverted

It is reasonable for the bank to purchase futures contracts if they expect interest rates to rise.

It is reasonable for the bank to take a long position in anticipation of rising rates.

Losses (or gains) in the value of the cash position can be largely offset by gains (or losses) in the value of the futures position

It is reasonable for the bank to sell futures contracts if it expects interest rates to fall

Yes, it is allowed for sporting events.

Yes, it is allowed if no money is involved.

Although not prohibited, it is strongly discouraged.

It is allowed for purposes of charity.