Technology in Investment - 2023 CISI Qs + Final cards for monday from all chaps Flashcards
What time frame does a firm have to amend data that is incorrect from a client?
- 20 Days
- 30 Days
- 40 Days
- 50 Days
30 Days
What is the maximum timeframe a firm can hold a clients data in line with the GDPR?
- Clients discretion
- 14 days
- Client sensitive data should never be stored internally
- As long as it needs
As long as it needs
What level of help desk is used to prioritize calls?
Level 1
Level 1 & 2
Level 2
Level 4
Level 1
What is the purpose of Statutory Reporting?
Post trade requirement
Pre trade requirement
Produce a firms balance sheet and P&L account
Produce a firms transaction reports
Produce a firms balance sheet and P&L account
What is settling within tolerance?
Slight difference in cash considerations on the trade instructions
Slight difference in cash considerations and the settlement amount
Slight difference in cash considerations on the trade amount
Slight difference in the buy and sell price of a bond
Slight difference in cash considerations on the trade instructions
What is the security layer for SWIFT?
SWIFTNET
SWIFTNET LINK
SWIFTNET LINK PKI
SWIFT SECURE
SWIFTNET LINK PKI
What is consideration?
Principal amount + Accrued interest + Commission
Principal amount + Accrued interest + Commission + Tax Fees and charges
Principal amount + Accrued interest + Commission + Clearing house fee
Principal amount + Accrued interest + Commission + Fees and charges
Principal amount + Accrued interest + Commission + Fees and charges
What is the principal for equities?
Share sell price x Share buy price
Market share / Price of equity
Number of shares x Market dislocation
Number of shares x Share Price
Number of shares x Share Price
What is the maximum percentage of a transaction that FFI’s can withhold aligning with the FATCA?
20%
30%
40%
60%
30%
What instruments are trade repositories involved with
Bonds
Government bonds only
OTC Derivatives
Products sold in a MTF
OTC Derivatives
How often do you record bonds and equities in general ledger?
End of day, daily
Weekly
Within a minute of the transaction confirmation
Monthly
End of day, daily
What is the difference between transaction reports and trade reports?
Transaction reports are public and for regulators and use an ARM whereas Trade reports are for private dissemination and use an APA
Transaction reports are private and for regulators and use an ARM whereas Trade reports are for public dissemination and use an APA
Transaction reports are private and for regulators and use an APA whereas Trade reports are for public dissemination and use an ARM
Transaction reports are not required under MiFID 2 whereas Trade reports are required under section 21 of MiFID and are publically available
Transaction reports are private and for regulators and use an ARM whereas Trade reports are for public dissemination and use an APA
Who manages SQL performance?
Chief Technology Officer
Chief Information Officer
Back end developers
Database Administrators
Database Administrators
How often should Business Continuity Plans be tested?
Bi-Annually
Dependent on size of the business, the FCA recommend every 3 years for large firms and bi-annually for smaller firms
Annually
Quarterly
Annually
For PRINCE 2, what examinations would the project manager have to sit?
foundation exam and practitioner exam
PRINCE applications and foundations exams
Foundation exam and a practical test conducted by an approved PRINCE 2 assessor
Foundation exam and a three year probation period
foundation exam and practitioner exam
What is the PTM Levy?
Transaction below 10,000
Transactions above 10,000
Transactions above 100,000
Transactions below 100,000
Transactions above 10,000
What’s penultimate step of vendor assessment?
CTO Sign off
Issuing RFP
Negotiation and place orders
Development of business continuity plan (BCP)
Negotiation and place orders
What are the key benefits to STP?
reduce systemic and op risk, improve trade matching, minimise op cost, improve customer service
reduce systemic and op risk, improve certainty, minimise op cost, improve customer service, less manual input
reduce systemic and op risk, improve certainty, minimise op cost, improve customer service
reduce systemic and op risk, improve certainty, minimise op cost, improve customer service, more trades can be processed
Reduce systemic and op risk, improve certainty, minimise op cost, improve customer service
Which key individual is most likely to interact with OIECs
Fund manager
Wealth manager
Project Manager
Financial Advisor
welf manager init
How often are bonds and equities recorded in the General Ledger?
as and when business events occur
quarterly
When a confirmation is received from the CSD
annually
as and when business events occur
in regards to a vendor what is the process after selecting the project team?
Specify requirements
Evaluate responses
Send RFI
Complete KYC
Specify requirements
What is Mifir/EMIR/STFR?
Regualtory frameworks in the EU
What does the “Total Count Method” ensure?
That all the safe custody assets be counted and reconciled on the same date
That all the safe custody assets are counted by using a reference data repository
That all the safe custody assets are counted and reconciled on the settlement date
That all the safe custody assets are counted and reconciled at the same time
That all the safe custody assets be counted and reconciled on the same date
What is the COBS rule?
Rule 2.1 states the purpose of the rule set as a whole, which is to ensure that firms always act honestly, fairly and professionally in accordance with the best interests of their clients.
they insist that if a firm is physically holding assets that belong to clients then these assets must be recorded under CASS
Rule 2.1 states the purpose of the rule set as a whole, which is to ensure that firms always act honestly, fairly and professionally in accordance with the best interests of their clients.
What does the “Rolling stock” method ensure?
- all of a particular safe custody asset are counted and reconciled as at the same date, and
- all safe custody assets are counted and reconciled during a period of six months.
What is the main consideration for PMBOK
Project decision and exam execution
Project initiation and exam essentials
Project initiation and exam essentials
Project essentials and exam revision
Project initiation and exam essentials
What is the penultimate step of vendor assessment?
Specify requirements
Evaluate Vendors
Send RFI
Complete KYC
Evaluate Vendors
One potential negative of best-shoring over near shoring?
Dispersion
Branding
Fragmentation
Costs of setting up multiple operation bases
Fragmentation
What are FOP Requirements
Secondary Authorization
Primary Authorization
Free of Payment regulations must be met
DvP must be done beforehand
Secondary Authorization
What is a configuration origin code?
Tells user of general ledger which system produced the transaction
Tells user of general ledger which system produced the trade
Tells user of general ledger which system produced the identifier code
Tells user of general ledger which code to use to settle a transaction
Tells user of general ledger which system produced the transaction
What date should bond issuers use to determine who receives the coupon?
Trade
Settlement
Consideration
Record
Record Date
What is the prohibited asset class in an OTF?
Equites
Bonds
Derivatives
Exotic Products
Equites
What does the CUNM mean in a settlement notification?
Cumulative trade
Trading error
Trade matched
Trade Unmatched
Trade Unmatched
What is traded on ICE Futures Europe:
- Futures and options
What are the names of the ledgers in the general ledger
Assets, Liabilities, Equity, Revenue, Expenses, Costs
Assets, Liabilities, Costs, Revenue,
Assets, Liabilities, Equity, Revenue, Expenses
Assets, Liabilities, Equity, Revenue, Expenses, Repository
Assets, Liabilities, Equity, Revenue, Expenses
What has been implemented to ensure hardware.
service level agreements (to ensure consistency)
RFPs
RFIs
Transaction reports
service level agreements (to ensure consistency)
What is the correct accounting equation?
Assets = Liabilities - Shareholders’ Equity
Assets = Liabilities + Shareholders’ Equity
Assets = Liabilities - Equity price
Assets = Liabilities - Portfolio adverts
Assets = Liabilities + Shareholders’ Equity
What is an equity Contract For Difference (CFDs)
contract between buyer and seller stipulating that the seller will pay the buyer the difference between the current and future value of the equity at an agreed date.
Visa Versa if negative
What are the three types of FX Transactions
spot - quoted by bank, T+2 - T+7, delivered on settlement date
forward -predetermined agreement beyond 7 days of tradedate
fx swap - agree swap for period of time and reverse transaction at a later date.
An organization that uses advanced investment strategies such as leveraged trading, long short and derivative positons in both domestic and international markets with the goal of generating higher returns is known as:
Robo-investment manager
A hedge fund
A wealth manager
Investment Bank
A hedge fund
What is the ‘Settlement date of a bond’
The date on which the investor should pay the consideration of the trade, take legal ownership of the instrument
The date that the trade was carried out
The date that the coupon is paid
The date on which the investor should pay the consideration of the trade, take legal ownership of the instrument. Should be the same as the value date, but there may be a delay
The date on which the investor should pay the consideration of the trade, take legal ownership of the instrument. Should be the same as the value date, but there may be a delay
What are the Key principles of automation? (5)
a transaction is entered into system only once
automated interfaces between systems so they can all keep track of transactions
trade processing should be in set stages each depending on the conclusion of previous stage
Manual intervention avoided as much as possible
above principles apply to all firms involved in the transaction
What 3 benefits do equity Contract for Difference (CFDs) offer investors?
investors to take long or short positions with:
no fixed expiry date or
contract size.
UK investors avoid stamp duty
Blood of industry
Criticality of data.
What is prudential regulation
concerned with financial soundness of regulated financial services firms.
Preventing investors and the economy from loss
What is the certification regime
Applies to ‘Material Risk Takers’
Have identified all certified individuals
-Have assessed them as fit and proper
-Have assessment of fitness of staff
Three Technological implications for the Senior Managers & Certification Regime (SM&CR)
All senior managers statements of responsibilities
Responsibilities map
Details of the regulatory approvals
handling of client assets (3 rules)
Record-Keeping
- Segregation
- Reconciliation
Reporting percentage?
Any move of 10% or more in a portfolio must be reported within 24 hours to the investor
What records are used to monitor market abuse
Post trade transaction reports via ESMA
Firms must provide confirmation details to the retail clinet:
In real time
On the trade date
On trade date +1
On trade dare +2
Trade date +1
Trade reports are near real-time broadcasts of trade data primarily aimed at:?
Detection of insider dealing
Market transparency
Detection of insider dealing & market abuse
Detection of market abuse only
Market transparency
Which of the following is correct regarding the segregation of duties?
Seg of duties attempts to limit operational errors
Seg of duties attempts to limit tech errors
Seg of duties attempts to limit authorized access to applications and underlying data
Seg of duties attempts to limit trading and accounting errors
Seg of duties attempts to limit authorized access to applications and underlying data
In stock lending, dividend of the loan are paid to the borrower. What should the borrower do with these payments?
Pay it to lender
Entitled to keep dividend
Borrower is entitled to keep the dividend but cost of loan is adjusted
Borrower retains the amount and pays the equivalent back at the end of the loan
Pay it to lender
Systems life cycle - What step is most likely to trigger a change of policy from completely replacing an old system to simply updating it?
Analysis
Fact finding
Feasibility study
Design investigation
Feasibility study
Main risk associated with FoP
Credit risk
Operational risk
Regulatory Risk
Market risk
Credit risk
To which firms do the requirements of MiFID 2 apply to?
Firms in the EU
Firms in the EEA
Globally regulated entities
Firms in the EU and firms who are outside the EU but have operations in the EU
Firms in the EEA
When a firm uses PRINCE 2, who will normally chair the project board at the start stage
Project Sponsor
Project Manager
The firms CEO
Firms head of IT
Project Sponsor
What is the idea behind ESMA
Establishment of an EU financial market watchdog
Provides advisory services to EU regulators
Sets obligatory requirements for prudential regulation of security firms within the EU
Twerkin
Establishment of an EU financial market watchdog
which of these is MOST likely to be built in-house, rather then brough from a software vendor
Complex general system
Help desk support system
Algorithmic trading software
A SWIFT Gateway
Algorithmic trading software