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REVALIDA PREP > Mat Revalida > Flashcards

Mat Revalida Flashcards

1
Q

What are classified as TSD?

A

TDs and government securities (both peso and dollar)

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2
Q

What are classified as TSD2?

A

Corporate Bonds (peso and dollar)

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3
Q

STRC

A

Derivatives (asset swap and deposit plus)

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4
Q

Which investment products do not require SAF?

A

Peso government securities with remaining tenor of less than 7 years

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5
Q

Which four (4) investment products do require SAF?

A

Peso government securities with remaining tenor of 7 years or more
- All dollar securities
- Derivatives (asset swap and deposit plus)
o Client’s risk tolerance must be at least moderate
- AXA products (investment-linked funds)
o Client’s risk tolerance must be at least moderate or aggressive, depending on the
fund’s components

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6
Q

Who is the custodian of NROSS?

A

BTR

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7
Q

What account name is NROSS?

A

SKAM01

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8
Q

What is the meaning of NROSS?

A

National Registry on Scripless Securities

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9
Q

What type of security is NROSS?

A

Peso government securities

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10
Q

Who is the custodian of NOCD?

A

Philippine Depository and Trust Corporation

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11
Q

What account name is NOCD?

A

SKAM01

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12
Q

What is the meaning of NOCD?

A

Name on Centralized Deposit

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13
Q

What type of security is NOCD?

A

Peso Corporate Bonds

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14
Q

Who is the custodian of LBP?

A

Landbank of the Philippines

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15
Q

What account name is LBP?

A

SKAM02

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16
Q

What type of security is LBP?

A

Dollar Securities (Both government and corporate)

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17
Q

H

A

Hold-out

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18
Q

S

A

SAF

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19
Q

Q

A

QIB or Non-QIB

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20
Q

B

A

Borrowing

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21
Q

R

A

Related Party

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22
Q

O

A

OPICS

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23
Q

S

A

Settlement

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24
Q

Which products have settlement dates of T + 0?

A

TDs (including Treasury TDs, which differs from ordinary TDs in terms of the
rate offered)

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25
Q

Which products do not require approval from Division Head to be dealth T + 0?

A

TDs

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26
Q

Which products have settlement dates of T + 1?

A

o All peso bonds and government securities; peso government securities and peso
corporate bonds
o US treasuries
o Retail dollar bonds

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27
Q

Which products have settlement dates of T + 2?

A

o Foreign currency-denominated corporate bonds
o Foreign currency-denominated sovereign bonds (e.g. ROPs)

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28
Q

MOSE

A

Metrobank Operational Support Engine

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29
Q

IVF

A

Investment Viewing Facility

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30
Q

IDBS

A

Internal Data Bank System

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31
Q

Purpose of IDBS

A

Where to check if a client is a related party or not

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32
Q

Purpose of IVF

A

Where to check if client’s settlement account has sufficient funds

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33
Q

Two (2) Purposes of SharePoint

A

o Acts as a database for Market Sales Group
o Contains all the necessary files, documents, and calculators

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34
Q

Two (2) purposes of WM

A

o Where clients can order government securities, the order of which will go straight
to SBD; does not go through ID or ASPs anymore
o Contains catalogue of different investment products, as well as the latest market
updates (Wealth Insights)

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35
Q

Two (2) purposes of MARC CUSTO

A

o Where to check for maturity of assets
o Where to check whether securities are under holdout

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36
Q

PURPOSE of Counterparty Limits and Credit Review

A

Where to check if clients have existing borrowings

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37
Q

Purpose of 3270

A

Contains all client details and info, including account details and RM number

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38
Q

What is OKIDOCS?

A

Used to generate client’s onboarding documents

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39
Q

Purpose of QIB Daily Tracker

A

Where to check if a client has QIB-accreditation or not

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40
Q

What is the two (2) purposes of TPC Finder?

A

o Where to check if client has NROSS/NOCD/LBP accounts
o Checks and balances

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41
Q

What is an RM number?

A

A client identity given only one (1) to each client. Unlike having many mnemonics.

42
Q

What is the five (5) steps of the General Deal Process?

A
  1. Conduct pre-deal checks (HSQBROSM).
  2. Confirm order details (face amount, cash-out, indicative returns at maturity, etc.) with
    client via recorded line or email.
  3. Once client confirms, post order on Eikon Messenger and wait for traders to fill it.
  4. Once trader fills the order (“DONE”), the transaction is considered “done” or
    “consummated” (“done deal”)
    a. At this point, the client can accept through MOSE, or the IS can send him the
    BOF for his signature.
  5. After this is the verification stage.
43
Q

Three (3) main pre-deal documents

A

Attestation Letter, SAF, and Broker’s Trading Agreement

44
Q

One (1) additional document for peso government securities

A

Investor’s Undertaking to create NROSS, superseding Special Power of Attorney

45
Q

One (1) additional document for peso corporate bonds

A

PDTC Forms

46
Q

Three (3) additional document for dollar securities

A

LOA for Landbank as Security Custodian (different for individuals and corporate accounts), W8BEN, W9BEN

47
Q

What is W8BEN?

A

▪ Document that certifies that a person is not a US citizen
▪ A prerequisite to invest in dollar bonds

48
Q

What is W9BEN?

A

▪ Document that certifies that a person is a US citizen
▪ US citizens are highly discouraged from investing in dollar bonds because
they will be subjected to US tax requirements (set by the IRS)
▪ Such tax requirements are supposed to be filed by the clients themselves,
not by the bank, which is a hassle on their end

49
Q

Two (2) additional document for derivatives

A

o International Swaps and Derivatives Association (ISDA) Master Agreement
o Risk Disclosure Statement

50
Q

Three (3) additional documents for corporate accounts

A

o Secretary’s Certificate
o List of Authorized Dealers
o Corporate Documents (Articles of Incorporation, By-laws, SEC Registration)

51
Q

Ten (10) steps of the onboarding process for first time clients of ID

A
  1. Branch refers clients to ID for investment-related transactions; ID can also reach out to
    potential clients contained in its leads list.
  2. The SMO (SMSD) generates the onboarding documents.
  3. The IS will generate the SAF.
  4. Client will sign the documents, and the branch personnel will verify the signature.
  5. The documents will be submitted to ID, and the SMO will ensure completeness.
  6. The desk head will endorse the onboarding to TOSD.
  7. The SMO will upload the client’s documents to SharePoint.
  8. TOSD will process the documents.
  9. Client will be enrolled in MOSE.
  10. After MOSE activation, the client can already deal with IS.
52
Q

Eleven (11) steps deal process

A
  1. Conduct pre-deal checks (HSQBROSM).
  2. Send a sample computation to client.
  3. Confirm deal details with client via recorded line or email.
  4. Once client confirms, post firm order on Eikon Messenger and wait for traders (SBD) to
    fill it.
  5. Once order is filled by traders (deal is done at this point), generate Bond Order Form
    (BOF) for bonds and Letter of Instruction (LOI) for TDs
    a. When the BOF or LOI is generated, the deal details are booked to interface.
    b. The SMO also obtains the deal details, which he books to OPICS.
  6. SMSD will send the email containing the MOSE acceptance link to the client, which he
    will subsequently accept.
  7. Record deal details in blotter.
  8. Verify deal details.
  9. Send done deal email to branch.
  10. Settlement is done on the value date. a. Payment is made (TOSD will debit the cash-out amount from the client’s
    settlement account)
    b. Ownership of the security purchased is transferred to the client.
  11. The client will receive a purchase confirmation via email.
53
Q

Validity of SAF (non-derivative products)

A

3 years

54
Q

Validity of SAF (derivative products)

A

1 year

55
Q

Validity of QIB-accreditation

A

3 years

56
Q

Validity of RPT

A

1 year

57
Q

Minimum Placements: Peso Fixed Income Securities

A

P500,000 increments of P10,000

58
Q

Minimum Placements: Dollar Fixed Income Securities

A

$50,000, $30,000 for increments

59
Q

Minimum Placements: Treasury TDs

A

P2,000,000

60
Q

Minimum Placements: Derivatives

A

P5,000,000 with succeeding placements of P2,000,000

61
Q

What are the three groups in EIKON messenger?

A

Local Markets – Peso securities
IMDD – dollar securities
Derivatives and Structuring – derivative products (asset swap and depo plus)

62
Q

What are the five (5) fees and taxes?

A
  1. Broker’s fee (for peso government securities) – 0.125% per annum (paid as part of the
    client’s cash out)
  2. Broker’s fee (for peso corporate securities) – 0.25% per annum
  3. PDEX transaction fee – 0.0025% per annum
  4. Landbank custodian fee – 0.03% per annum (deducted from the ending proceeds)
  5. 20% withholding tax; therefore, Face Value x Coupon Rate x (No. of months/12) x 80%
63
Q

What are the four (4) legs of ID?

A

Front Office (ID), SMSD (Middle Office), TOSD (Back Office), SBD (Traders)

64
Q

What is the mandate of the front office?

A

Responsible for selling investment products to clients

65
Q

What is the mandate of the middle office?

A
  1. Responsible for onboarding clients (generating onboarding documents),
  2. Processing PDTC requests (consolidates orders for primary issuances)
  3. Booking clients’ deal details to OPICS
66
Q

What is the mandate of the back office?

A

Responsible for documentation (processing clients’ onboarding documents) and settlement (debiting cash out amount from clients’ settlement accounts during settlement dates)

67
Q

What is the mandate of the traders?

A

Responsible for filling firm orders posted by IS on Eikon Messenger, providing
clients with the best available rate (based on the principle of “best execution”),
and entertaining inquiries regarding prices and rates

68
Q

Five (5) step process for primary issuances

A
  1. When a new bond issuance goes public, the underwriters involved/First Metro Investment Corporation/Treasury Group partners will send an email to counterparties, informing them of the issuance
  2. Upon receipt of email notification of new issuance from underwriters/FMIC/TG partners, SMSD solicits demand estimates and firm orders from ID
    a. The IS is responsible for generating orders from clients
    b. ID will submit consolidated orders per desk to SMSD
  3. SMSD consolidates orders for submission to underwriters/FMIC/TG partners
  4. SMSD sends allocation advise to ID as soon as possible
  5. The SMO in charge is responsible for monitoring submission of the pre-deal and deal documents for primary issuance
69
Q

What are the six (5) QIB requirements for individuals?

A

Minimum annual gross income of P10,000,000 for at least 2 years prior to registration,
OR
- Portfolio of SEC-registered securities of at least P10,000,000, OR
- Personal net worth of at least P30,000,000
AND
- Engages in active trading of securities in his own capacity or through a fund manager for
at least 1 year, OR
- Held a position of responsibility that requires knowledge/expertise in securities trading
for at least 2 years

70
Q

What are the two (2) QIB requirements for corporations?

A

Gross assets of at least PHP 100,000,000.00 for at least 2 years prior to registration
- Total portfolio investment in securities registered with SEC or BTR (gov sec) of at least
PHP 60,000,000.00

71
Q

What are the four (4) required documents for QIBs?

A

Letter of Understanding (from applicant)
- IQIBIS (individual) or QIBIS (corporate) information forms
- IS Review Form
- Proof of qualifications:

72
Q

What are the six (6) types of proof of qualification?

A

Computation of Net Worth – for applicants proving P30,000,000 net worth
- CA/SA Screenshots – for applicants proving P10,000,000 annual income and
P30,000,000 net worth
- Certificate of Outstanding Placements (like SOA) – for applicants proving
portfolio and trading
- Credit Investigation Report/Loandex (CIR/CLX) – for applicants proving loan
placements
- Certificate for proof of trading – for applicants proving trading
- SAF – required for new applicants, but not necessary for existing applicants with
valid SAFs

73
Q

The bank buys at what price?

A

Offer price

74
Q

The bank sells at what price?

A

Bid price

75
Q

What is the minimum term to maturity of a foreign currency-denominated bond?

A

90 days

76
Q

What are the three legs of an asset swap?

A

(1) FX Spot, (2) Underlying, (3) Forward Swap/CCS

77
Q

What are the three steps of an asset swap?

A
  1. Client deposits PHP, which is converted into foreign currency (FX Spot)
  2. Such foreign currency is used to buy a foreign currency-denominated bond (Underlying)
  3. The cash flows of the bond are paid to the client in PHP at maturity (Forward Swap/CCS)
    Forward Swap
    Used for foreign currency-denominated T-Bills
    The face value of such T-Bills is converted into PHP and paid to the client in a single payment (bullet interest payment) at maturity
    Cross Currency Swap (CCS)
    Used for RDBs and other foreign currency coupon-paying bonds
    The periodic coupon payments, as well as the principal amount at maturity, are converted into PHP and paid to the client
    Client needs SKAM02 for asset swaps because he needs dollars to buy the underlying bond (assuming it’s denominated in dollars)
78
Q

What are the three steps in a deposit swap?

A
  1. Client deposits PHP, which is converted into foreign currency (FX Spot)
  2. Such foreign currency is deposited into a foreign currency-denominated TD (Underlying)
  3. The principal plus interest earned at maturity is converted into PHP and paid to the client (Forward Swap)
79
Q

What is a Letter of Instruction (LOI)?

A

Order confirmation for TDs

80
Q

What is a Bond Order Form?

A

Order confirmation for fixed income securities

81
Q

What is a Term Sheet?

A

Order confirmation for derivatives

82
Q

What is a Application to Purchase Foreign Exchange (APFE)?

A

a. ID deals FX for investment purposes only
Non-Trade Form
b. Used to purchase bonds issued outside the Philippines
c. Applies to Philippine companies who issued bonds in another country (country of issuance is not the Philippines)

83
Q

What is the Deed of Assignment?

A

Assigns the underlying asset in a derivative as collateral

84
Q

What are the four needs of DOA?

A
  1. Mitigates the pre-settlement risk
  2. Requires physical signature
  3. All Derivatives need DOA
  4. Only Asset swaps need notarization, since Depo Plus only uses a TD for the underlying.
85
Q

Four documents needed for an Asset Swap

A

1.Term Sheet
2. DOA
3. APFE (application to purchase foreign exchange)
4. BOF

86
Q

Three documents needed for a Depo Plus

A
  1. Term Sheet
  2. LOI
  3. DOA (but no need notarization)
87
Q

What is the code for Peso Savings Accounts?

A

Branch code +3

88
Q

What is the code for Peso Savings Accounts?

A

Branch code +7

89
Q

What is the code for Dollar Accounts?

A

Branch code +2

90
Q

Four important notes on reading settlement accounts:

A

*Branch code is first 3 digits
*Settlement account number is 13 digits total
*type of account is seen on 4th digit
*digits 5-13 are unique code

91
Q

How many departments are in ID?

A

Seven

92
Q

How many departments in SMSD?

A

Two

93
Q

What are the departments in SMSD?

A

Sales Management Department and Sales Support Department

94
Q

What are PAD transactions?

A

Transactions of covered instruments of the covered employee’s personal account and his/her immediate family members (i.e., spouse, 1st degree relatives and siblings) living in the same household, which require pre-approval or reporting to the Associated person

95
Q

What are covered employees?

A

employed under the Financial Markets Sector (FMS) who, ars parts of their functions, positon, or activities, have regular access to material nonpublic information, or have the ability to provide quotes or influence the price at which client deal, of Philippine listed securities

96
Q

What are associate persons?

A

per Securities Regulation Code, an AP will refer to any person employed full time by the Bank whose responsibilities include:
internal control supervision of other employees, agents, salesmen, officers, directors, clerks, and stockholders of such Broker Dealer for compliance with the Code and corresponding rules and regulations
Cannot perform other duties without commission approval and subject to the condition that the broker dealer will maintain appropriate chinese walls between the functions of an associated person and that of the other function.

97
Q

What are Material Non-Public Information?

A

Materials which have not been generally disclosed to the public and if disclosed, would likely affect the price of the securities whether positively or negatively.

98
Q

Six PAD policies

A
  1. Pre clearance was obtained for restricted transactions and the transaction was made within 3 days from approval
  2. Government/Corporate/Non Metrobank Issued Securities, Securities in Directional Accounts with a Trust company were reported within 5 banking days after deal date
  3. Transactions dealt with Metrobank By MSG IDD personnel were executed by the IDD desk other than their own
  4. Investments were held for the minimum holding period of 28 calendar days
  5. Transactions involving Metrobank issued securities/Long term Negotiable Certificate of Deposit (LTNCD) were not made during blackout periods
  6. There were no trading irregularities
99
Q

Who are prohibited bondholders?

A

A person who by reason of his position, function, or rank in metrobank, gains access to material non-public information

100
Q

Which companies form part of MB group?

A
  1. Metrobank
  2. PSBank and its joint venture
  3. First Metro Investment Corporation (FMIC) and subsidiaries and associates
  4. ORIX Metro Leasing and Finance Corporation and its subsidiaries
101
Q
A

REVALIDA PREP (3 decks)

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