MCQ Chapter 3

Question 1

Which aspect of Central Counterparty Services primarily aims at reducing the settlement risks by offsetting obligations and entitlements among multiple parties?

Select one:

a. Margin and Collateral

b. SwapClear

c. Multilateral Settlement Netting

d. RepoClear

Answer 1

Multilateral Settlement Netting

Question 2

Difference between NCM and GCM

Answer 2

NCM needs one connection, GCM needs two

Question 3

What is balance sheet netting?

Answer 3

Netting together collateral and trading assets

Question 4

Which feed protocol does LSE use to communicate orders?
Question 9Select one:

a. Millenium

b. HSVF

c. GTP

d. SAIL

Answer 4

Millenium

Question 5

Which methodology is used to calculate margin payment by most clearing houses?

Select one:

a. Standardised Portfolio Analysis of margin

b. The Theoretical Intermarket Margin System (TIMS)

c. Rules based - Reg.T

d. Standardised Portfolio Analysis of Risk

Answer 5

Standardised Portfolio Analysis of Risk

Question 6

What is the role of a clearing house?
Select one:

a. processing of corporate action entitlements.

b. to provide settlement and custody services.

c. to provide settlement and custody services and/or central counterparty services.

d. to provide settlement and custody services and central counterparty services

Answer 6

to provide settlement and custody services and/or central counterparty service

Question 7

What is novation ?

Answer 7

the substitution of one party to a contract by another party

Question 8

Which of the following LSE trading systems is home to the most liquid securities?
Question 13Select one:

a. Funds Platforms

b. SETSqx &; SEAQ

c. Orderbook for retail bonds

d. SETS

Answer 8

SETS

Question 9

The Millennium Exchange software platform lunch and for which Exchange?
Question 18Select one:

a. 2015, NYSE

b. 2011, NYSE

c. 2015, LSE

d. 2011, LSE

Answer 9

2011, LSE

Question 10

Which of the following is not an Alternative trading venue (ATS)?
Question 20Select one:

a. MTF

b. ECN

c. Dark pool

d. OTF

Answer 10

d. OTF

Question 11

In the UK, investment exchanges are regulated by the FCA, which has classified them into three categories. Which of the following is not one of these categories?
Question 21Select one:

a. BIE

b. RIE

c. DIE

d. ROIE

Answer 11

BIE

Question 12

As of January 2023, which clearing house is not a recognized central counterparty according to the Bank?
Question 22Select one:

a. LME Clear Ltd

b. Euroclear UK & Ireland Ltd

c. CME Clearing Europe Ltd

d. ICE Clear Europe Ltd

Answer 12

Euroclear UK & Ireland Ltd