9 - Financial Markets Flashcards
What needs to be published for a market to be pre-trade transparent?
Real-time quotes
Who are the 2 bodies carrying out depositary/settlement functions for Eurobonds?
Euroclear & Clearstream
What is a major benefit of a quote-driven market?
Increased liquidity
What levy does the takeover panel get from share transactions?
£1 on deals of 10k or more
What is the purpose of variation margin?
Cover adverse movements in value from the previous day
What is the process by which a clearing house becomes the central counterparty to all transactions on derivatives exchanges?
Novation
What is the stamp duty rate (SDRT) on trades?
0.5% on share purchases
How many auctions are there per day on Stock Exchange Electronic Trading Service (SETS)?
3 auctions per day
On which basis do gilts accrue interest?
Actual/actual
What is standard settlement for UK Government loan stock?
T+1
How many days do UK & US equity trades take to settle?
2 days
What is the Universal Trading Platform of the NYSE?
A system for transferring orders to designated market makers
What is the role of a systematic internaliser?
To facilitate a cross trade between clients
At what stage does a clearing house become the central counterparty to a trade?
When the trade is registered
What stocks trade on SETS?
FTSE All Shares and the more liquid AIM shares
What is a main distinction between an electronic quote driven system and an order-driven one?
Market makers have to quote bid and offer prices in quote-driven
What form of settlement does CREST normally provide?
Delivery versus payment (DVP)
How are deals executed on an electronic order book system?
Execute against the best priced sell orders immediately and if not completely filled the remainder will be cancelled
What does the Gilt-Edged Market Makers’ Association (GEMMA) do?
Provides data at the end of each day to the DMO
What new controls have been added to the commodity derivative market under MiFID II?
Establishing position limits on commodity derivatives (MTF, OTF and exchange contracts only)
What is trade clearing?
Recording and matching trades and maintaining positions
What is the best description of the principal-to-principal guarantee structure?
The clearing house guarantees trades between itself and the clearing member only
To whom do the FCA listing rules apply?
Companies listed on the LSE (i.e. not AIM companies)
What asset do Life Insurance companies mainly invest in?
Equities
What is the standard settlement for Equity Corporate Bonds and Eurobonds?
T+2
What is the minimum quote on SETSqx?
1xEMS
What is the main restriction on buying third party research?
The research budget must NOT be linked to the volume or value of transactions executed on behalf of clients
Which regulation requires UK persons entering into a derivatives contract to report and risk manage that position?
UK EMIR
When can a single shareholder call a company meeting?
When they have at least 5% of the voting capital
