ACI/ FINANCIAL MARKETS

AND DEALERS COURSE

Trainer:
Okuni Charles Ssalongo
+256 781 428 778 / 706 691 072
okuni123ssalongo@gmail.com

Course overview
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 ACI / Financial Markets and Dealing course
 ACI – Association Cambiste internationale founded in
1955 in Paris.
 The ACI Dealing Certificate is a foundation
programme that allows candidates to acquire a working
knowledge of the structure and operation of the major
foreign exchange and money markets, application of the
fundamental mathematics used in these markets, core
products (cash, forwards and derivatives) and basic
skills required for competent participation, including the
ability to apply the fundamental mathematics used in
these markets.
 Candidates should also be able to apply The Model
Code to their “situation” UIBFS
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 Students’ category
• The course is designed for the following groups:
 new entrants and junior dealers (0-18 month’s
experience) in the dealing room
 middle office and operations personnel
 auditors and compliance officers
• Other professionals:
• the Financial or Capital Markets.
 Relationship Managers
 Accountants
 Corporate treasurers
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 Core subjects
• Basic Interest Rate calculations
• Cash Money Market
• Foreign Exchange
• Forward-Forward, FRAs and Money Market
Futures & Swaps
• Options
• Asset & Liability Management
• Principles of Risk
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 Treasury management
• Front office
i. Customers
ii. Trading desks
iii. Money market
iv. Foreign exchange
• Middle office
• Back office
i. Treasury operations
ii. Trading risks
iii. Policies
iv. Codes of conduct
v. Duties/ responsibilitiesUIBFS
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 Basic Interest Rate Calculations

• Overall Objective:
 To understand the principles of the time value of money.
 To be able to calculate short-term interest rates and yields,
including forward-forward rates, and to use these interest rates
and yields to calculate payments and evaluate alternative short-
term funding and investment opportunities.
 Candidates should know what information is plotted in a yield
curve, the terminology describing the overall shape of and basic
movements in a curve, and the classic theories which seek to
explain changes in the shape of a curve.
 They should also know how to plot a forward curve and
understand the relationship between a yield curve and forward
curves

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 Cash Money Markets

• Overall Objective:
• To understand the function of the money market, the
differences and similarities between the major types of
cash money market instruments and how they satisfy
the requirements of different types of borrower and
lender.
• To know how each type of instrument is quoted, the
quotation, value date, maturity and payment
conventions that apply and how to perform standard
calculations using quoted prices.
• Given the greater inherent complexity of repo, a good
working knowledge is required of its nature and
mechanics.
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 Foreign Exchange

• Overall Objective:To understand and be able to apply spot

exchange rate quotations.
• To understand basic spot FX dealing terminology and the role of
specialist types of intermediary. To recognize the principal risks
in spot and forward FX transactions.
• To calculate and apply forward FX rates, and understand how
forward rates are quoted.
• To understand the relationship between forward rates and interest
rates.
• To be able to describe the mechanics of outright forwards Time
options, FX swaps and NDFs.
• explain the use of outright forwards in taking currency risk and
explain the use of FX swaps in rolling spot positions, hedging
outright forwards, creating synthetic
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foreign currency assets and 8
liabilities, and in covered interest arbitrage. To be able to
 Foreign Exchange

• Overall Objective:
 To understand and be able to apply spot exchange rate quotations,
understand basic spot FX dealing terminology and the role of specialist
types of intermediary.
 To recognize the principal risks in spot and forward FX transactions.
 To calculate and apply forward FX rates, and understand how forward
rates are quoted, understand the relationship between forward rates and
interest rates.
 To be able to describe the mechanics of outright forwards Time options,
FX swaps and NDFs, explain the use of outright forwards in taking
currency risk and explain the use of FX swaps in rolling spot positions,
hedging outright forwards, creating synthetic foreign currency assets
and liabilities, and in covered interest arbitrage.
 To be able to recognize and use quotes for precious metals, and
demonstrate a basic understanding of the structure and operation of the
international market in precious metals.
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 Forward-forwards, FRAs and Money Market
Futures & Swaps
• Overall Objective:
 To understand the mechanics of and how to use
money market interest rate derivatives to hedge
interest rate risk.

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 Options
• Overall Objective:
 To understand the fundamentals of options.
 To recognize the principal classes and types, and
understand the terminology, how they are quoted
in the market, how their value changes with the
price of the underlying asset and the other
principal factors determining the premium.
 how the risk on an option is measured and how
they are delta hedged to recognize basic option
strategies and understand their purpose.
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 ALM
• Overall Objective:
 To understand the fundamentals of Asset & Liability
Management as a practice of managing and hedging risks that
arise due to mismatches between the asset side and the liability
side of the balance sheets of a bank.
 To explain how main risk factors like funding and liquidity risk,
market risk (FX, Interest Rate, Equity, Commodity, etc.), credit
risk, leverage risk, business risk and operational risk are
interrelated and how they affect the balance sheet of a financial
institution.
 To describe common risk management and hedging techniques
which help control these effects and to understand how these
techniques are used to set up a state-of-the-art ALM approach.
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 Principles of Risk
• Overall Objective:
 To identify and distinguish between the principal
types of risk in the markets.
 To explain the main policies and procedures
used to mitigate these risks.
 To understand the principles of position-keeping
and valuation, using spot FX as an example.

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 The Model code
• Overall Objective:
• What is model code
• The Model Code working knowledge its
recommendations and application
• dispute handling procedures.

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 Quality Service Delivery
• What is quality service delivery (customer
service definition by customer and
organisation)?
• AIDA strategy (attention, interest, desire &
action)
• Service delivery/ customer service culture
• 10 rules of quality service delivery
• Works model in service delivery
• Determinants of quality Service
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 Money Laundering
 Definition and origin of Money Laundering
 Process
 Money Laundering Officer’s roles and
responsibilities
 Money Laundering offence and controls

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 Examination Procedure

• Format: The examination lasts 2½ hours and consists

of 106 multiple-choice questions.
• The overall pass level is 60%
• assuming that the minimum score criteria for each of the
topic baskets is met.
• a minimum score criteria of 60% for The Model Code
60% and other units 50%.

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 Examination
• The examination lasts 2 hours and consists of 90
multiple-choice questions.
• The overall pass level is 60% (42 correct
answers), assuming that the minimum score
criteria for each of the topic baskets is met.
• A minimum of 50% is required for each one of
the topic baskets in addition to the overall 60%
pass mark.

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 Examination
1. Basic Interest Rate Calculations 6 questions minimum of 3
correct
2. Cash Money Market 6 questions minimum of 3 correct
3. Cash Money Market Calculations 6 questions minimum of 3
correct
4. Foreign Exchange 12 questions minimum of 6 correct
5. Foreign Exchange Calculations 6 questions minimum of 3
correct
6. FRAs and Money Market Futures & Swaps 12 questions
minimum of 6 correct
7. Options 6 questions minimum of 3 correct
8. ALM 8 questions minimum of 4 correct
9. Principles of Risk 8 questions minimum of 4 correct
10. Total marks 70
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 Examination
Grades
a. Pass 60% - 69.99%
b. Merit 70% - 79.99%
c. Distinction 80% and above

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