THINGS I GOT WRONG

Question 1

Which of the following is required for straight-through-processing (STP) across firms and the industry in general?

Answer 1

Common industry message standards

Question 2

With reference to Basel II and III, what does a firm using the Standardised Approach seek to establish?

Answer 2

The overall amount of operational risk capital which the firm needs to have in place

Question 3

EMIR was designed to improve transparency in what market?

Answer 3

Derivatives

Question 4

One of the Financial Conducts Authorities statutory objectives is to?

Answer 4

Ensure that the relevant markets function well

Question 5

What is the connectivity requirements of a dealer member of an exchange?

Answer 5

Access to the exchange systems but not to the clearing house systems

Question 6

What limitation associated with VaR does CoVAR seek to remedy?

Answer 6

Failure of VaR to specify the size of losses in the percentage of days outside the confidence factor

Question 7

What are transaction reports used for?

Answer 7

Private dissemination to regulators to primarily identify potential market abuse and to undertake market surveillance

Question 8

Who chooses the settlement agent?

Answer 8

The sell-side firm and the investor

Question 9

Which external identifier is used to identify professional trade parties?

Answer 9

BIC code

Question 10

To be eligible for membership of SCORE, a corporate entity must be listed on an exchange located in a country which is a member of the; ?

Answer 10

Financial Action Task Force

Question 11

Within the IT division, what role is responsible for the company’s IT strategy along with key business stakeholders?

Answer 11

Head of Information Technology

Question 12

The use of nominee accounts:

Answer 12

Makes it easier to ensure that client assets are not inadvertently used in collateral-based transactions

Question 13

In stock lending, any dividends paid during the term of the loan are paid to the borrower. What is the borrower required to do with regard to the dividend payments?

Answer 13

The borrower should pay it to the lender

Question 14

How does the ‘Follow-the-Sun’ model compliment a global business’s application support operation?

Answer 14

It provides 24-hour support across different time zones for the business users

Question 15

An advantage of insourcing, compared to outsourcing, is:

Answer 15

Improved employee loyalty

Question 16

Most firms’ systems use a table to underpin the process of deciding which accounts to post to. This is known as:

Answer 16

Explosion table

Question 17

Which of the following is an advantage of the fountain model of software development methodology compared to the waterfall model?

Answer 17

It allows some phases to occur simultaneously

Question 18

What advantage can a firm derive from developing, operating and maintaining its own IT systems

Answer 18

A competitive advantage

Question 19

To which firms did the requirements of MiFID II apply when they commenced in 2018?

Answer 19

Firms in the European Economic Area

Question 20

Why is the record date an important feature of secondary market bond trades?

Answer 20

To determine who will receive the coupon

Question 21

What is the idea behind ESMA?

Answer 21

The establishment of an EU financial markets watchdog

Question 22

Which software development methodology is based on the principle that unit tests are written first and fail until the code is written?

Answer 22

Agile