NEW SYLLABUS
ACI Operations Certificate
(Prometric Code: 3I0-013)
Examination delivered in
English and German
Introduction
A well-trained and efficiently organised Treasury Operations Department is
essential to complete every transaction. The Operations Department provides a
vital service to the Front-Office by ensuring that all funds flow in a timely and
correct manner and that all the necessary documentation is completed.
Taking into consideration the wider job function of the Operations Staff, this
examination has been designed to provide a benchmark for competency in all
aspects of the operations and settlement processes. It aims to test candidates’
knowledge of the underlying instruments involved in the international financial
markets, the processes for efficient settlements and related basic financial
calculations. Candidates should also be able to demonstrate appreciation of the
scope, importance and the role of the Operations Department, particularly in
ensuring an autonomous service to the Front-Office.
In particular, this programme is designed for:
• Recent entrants to the Operations Department (Back-Office);
• Other trading room support areas;
• Internal and external auditors;
• Compliance and risk officers;
• Product Control;
• Vendors.
In addition to the topics outlined below, candidates will be expected to be up-todate
with the latest developments that affect the Operations Department.
Syllabus - ACI Operations Certificate
1. Overall financial market and front to end treasury view
Overall Objective: To describe the roles of each participant within the financial
market and to provide an understanding of how Treasury Trading and Sales,
Middle-Office and Operations have to be structured in the risk management
context. To give an understanding of how the whole transaction process
management can be optimised as well as to explain the importance of providing a
quality, customer-orientated service to both internal and external clients.
At the end of this section, candidates will be able to:
• Describe the roles of dealers, brokers and operations officers.
• Understand the reasons for segregation of duties and separate reporting
lines.
• Depict the workflow of a transaction, encompassing all aspects of the
settlements ___process from deal capture through to management and
exception reports.
• Explain the importance of Straight Through Processing (STP) related to
timely ___processing, risk, cost and accuracy, as well as the possible ways to
improve STP.
• Explain the quality management measures necessary to ensure a high
quality ___customer-orientated service. ___
2. Deal capture, trade entry and confirmations
Overall Objective: To explain the payment and confirmation process that follows
deal capture and trade entry; list the problems that can arise if mistakes are made;
describe how different clearing and payment systems can impact on risk; show an
understanding of the correct source of trade information. ___
At the end of this section, candidates will be able to:
• Understand the usefulness of confirmations.
• Explain the importance of checking and confirmation matching processes.
• Describe the use of automation in the confirmations procedure.
• List the different types of SWIFT messages and their usage.
• State the different steps between deal entry and trade confirmation.
• Describe the different ways in which trade information can be generated.
• Be aware of how the segregation of duties should be applied in trade
generation and ___capture.
• Know how the trade information received from the Front-Office should be
validated.
Syllabus - ACI Operations Certificate
3. Settlement, netting and clearing
Overall Objective: To explain the importance of the different settlement and
payment systems as well as the use and handling of the correspondent network
and accounts.
At the end of this section, candidates will be able to:
• Understand the use of correspondent banks, nostro / vostro accounts.
• Explain cut off times for payment with good value or short dates.
• Define the different types of domestic and international payment systems.
• Describe different types of settlements such as delivery versus payment,
netting and Continuous Linked Settlement (CLS).
• Expand upon the CLS system and parties involved.
• Understand the use, functioning and advantages of bilateral and multilateral
netting procedures.
4. Reconciliations and investigations
Overall Objective: To explain the methodology used to match at least two
different records, using the same information to identify and investigate differences
and taking corrective action when necessary. To explain the way how to proceed to
settle outstanding items.
At the end of this section, candidates will be able to:
• Explain the mechanism of a reconciliation system.
• Detect mismatching figures (importance of timely identification).
• Interpret mismatching figures.
• Control incoming and outgoing flows.
• Calculate and agree brokerage, including the checking of discounts.
• Identify the different moves to resolve an outstanding item step by step.
• Resolve and close outstanding items.
___
Syllabus - ACI Operations Certificate
5. Treasury systems and data management
Overall Objective: To explain the essentials of a treasury system, the data
management for treasury operations as well as the basic accounting of treasury
operations.
At the end of this section, candidates will be able to:
• Explain the different ways of financial communication and transfer
transactions.
• Describe the different types of static data.
• Define the standard settlement instructions management (usage,
maintenance and ___advantages).
• Outline standing data files and tables.
• Understand the management of customer data within the different systems
as well ___as the basic procedures to ensure the “know your customer”
principles.
6. Risk management, controls, compliance, documentation
Overall Objective: To explain the importance of having strict procedures and
controls in place to ensure that no unauthorised or incorrect payments are made
and to protect the business from related risks. To describe the purpose of
documentation in settling financial transactions.
At the end of this section, candidates will be able to:
• Understand the dangers involved with third party payments and describe the
controls that can minimise those risks.
• Outline operational risk, and how it can arise.
• Explain settlement and delivery risk, and how they can be minimised.
• Understand the need to maintain up to date recording of holiday and
settlement ___files.
• List the due diligence procedures for account opening.
• Explain the relevant regulatory guidelines and recommendations for best
practice ___such as the Model Code.
• Describe the Disaster Recovery (DR) and Business Continuity Plan (BCP)
principles.
• Identify key documentation issues.
• List the major types of Agreements.
• Expand upon the different risks and have a general understanding of risk
models.
• Explain the importance of regulatory policies and compliance. ___
Syllabus - ACI Operations Certificate
7. Foreign exchange ___
At the end of this section, candidates will be able to:
• Define the features of foreign exchange instruments (spot, forward, swap).
• Define the features of Non-Deliverable Forwards (NDF).
• Explain the settlements process for foreign exchange instruments.
• Describe relevant responsibilities, cycle processes and incorporated controls.
• Outline the characteristics of value today and value tomorrow outrights.
• Calculate settlement / close out amounts correctly.
8. Money market
___
Overall Objective: To explain the characteristics of the major money market
instruments, specific responsibilities and associated settlement processes.
At the end of this section, candidates will be able to:
• Define the characteristics of the major money market instruments.
• Describe the trade life cycle and controls for money market instruments.
• Understand the main money market benchmark fixings.
• Explain the settlements process for the major money market instruments.
• Calculate settlement and close out amounts as well as the related penalty
fees.
• Define the characteristics of major short-term securities instruments.
• Appreciate the use of repos in the liquidity management of a bank.
• Describe the trade life cycle and controls for short-term securities
instruments.
9. Derivatives
Overall Objective: To explain the specific features of exchange-traded and Over
The Counter (OTC) derivative markets as well as the characteristics of optional and
non-optional derivatives, including the specific responsibilities and processes
associated with them.
At the end of this section, candidates will be able to:
• Recognise the differences between exchange-traded and OTC derivative
markets.
• Explain the characteristics of the plain vanilla derivative instruments (FRAs,
futures ___and swaps).
• Calculate reset / fixing rates and margins for plain vanilla derivative
instruments ___such as swaps, total return swaps, FRAs, IRS, CIRS and futures.
• Reconcile correctly financial futures positions and margin calls with the
clearing ___agent.
Syllabus - ACI Operations Certificate
10. Short-term bonds and notes
Overall Objective: To explain the characteristics of short-term debt instruments,
notes and bonds as well as the specific responsibilities and processes associated
with them.
At the end of this section, candidates will be able to:
• Define the features of the major short term fixed income securities such as
commercial paper, treasury notes and bonds.
• Outline bond market indicators and indexes.
• Distinguish coupon bonds from zero coupon bonds.
• Differentiate, within the corporate debt products, instruments such as junk
bonds, ___bond indentures, callable bonds, convertible bonds and floating rate
bonds.
• Describe the trading characteristics on exchanges, OTC, on secondary
markets as ___well as on third and fourth markets.
• Explain the securities issuing process by corporates.
• Outline the relevant responsibilities, cycle processes and incorporated
controls.
• Calculate settlement / close out amounts correctly; understand the price /
yield ___relationship.
• Describe the reconciliation of securities held, the use of custodians as well as
the ___delivery of securities.
• Explain the collateral management for bank liquidity.
11. Best Practices Operations
Overall Objective: To have a in-depth knowledge of the requirements of the
Model Code as to Best Practices Operations with an emphasis on professionalism
and integrity as well as on the main aspects of Operations such as confirmations,
settlements, reconciliations and control mechanisms.
At the end of this section, candidates will be able to:
• Understand efficiency and accuracy as the two most important aspects of the
operational process.
• Apprehend and explain the confirmation process.
• Define and describe the features of settlement, netting and standard
settlement instructions (SSIs).
• Understand the importance of Performance and Capacity Management in FX.
• Differentiate “prime brokerage” and “non-prime brokerage” trades and
explain their matching.
• Describe the settlement trough CCP and CLS
• Define “de minimis” claims.
• Comprehend and calculate compensation claims, back value and use of
funds (UOF) requests and explain the respective calculation methodologies.
• Expand upon “broken trades” and off-market rate deals.
Syllabus - ACI Operations Certificate
• Understand the Industry Best Practice for general setup, controls as well as
business contingency planning (BCP) and explain the segregation of duties.
• Describe Best Practices with regards to Electronic Trading, its participants
and counterparts as well as its processes.
Syllabus - ACI Operations Certificate
Examination Procedure
Format: The examination lasts 2 hours and consists of 85 multiple-choice
questions. Some questions might require the use of a basic calculator. The latter
will be provided on screen.
The overall pass level is 50% (43 correct answers), assuming that the minimum
score criteria for each of the topic baskets is met.
The minimum score criteria is 50% for the Best Practices Operations topic
basket and 40% for each of the other topic baskets.
Topic basket Number of
questions
Minimum of
correct answers
Minimum score
level
1 Overall financial market and
front to end treasury view 5 2 40%
2 Deal capture, trade entry and
confirmations 10 4 40%
3 Settlement, netting and clearing 10 4 40%
4 Reconciliations and
investigations 10 4 40%
5 Treasury systems and data
management 5 2 40%
6 Risk management, controls,
compliance and documentation 10 4 40%
7 Foreign exchange 5 2 40%
8 Money market 5 2 40%
9 Derivatives 10 4 40%
10 Short term bonds and notes 5 2 40%
11 Best practices operations 10 5 50%
Total 85
Grades
Pass 50,00% - 64,99%
Merit 65,00% - 74,99%
Distinction 75,00% and higher
Examination Fee
EUR 250,00 all taxes included.
Syllabus - ACI Operations Certificate
ACI OPERATIONS CERTIFICATE
Reading List and Internet Links
General
• Mastering Treasury Office Operations written by Denis Nolan and
Gordon Amos. CHAPTERS 1-7: ISBN 0 273 635794 Publisher - Pearson
Education (£90.00). www.pearsoned.co.uk
• Treasury Operations Handbook written by Philip J L Parker ACIB, ISBN
978-1-4461-9450-8. Publisher www.lulu.com 2010 (£35.00) available from
www.lywood-david.co.uk/mmtw4.htm
• Back Office and Operational Risk written by Mervyn J. King. Published
2010 by Harriman House Publishing. ___ISBN 9781906659363. (£45.50)
www.harriman-house.com
• The ACI Model Code, published by ACI – The Financial Markets
Association. Copies can be downloaded from www.aciforex.com
• FSA Handbook FSA Central Bank Authority FSA Handbook online version
available at: www.fsa.gov.uk/handbook
• Payment systems For CHIPS available at:
http://www.chips.org/reference/docs_rules/000721.pdf
• CLS Best Practice Contact: http://www.cls-services.com
• NIPS Code available at:
http://www.bankofengland.co.uk/markets/forex/fxjsc/nipscode.pdf
• ICMA The Global Master Repurchase Agreement (GMRA) is available at:
http://www.icmagroup.com/resources/icma-documentation/
• ISDA
http://www.isda.org/publications/pubguide.aspx Some documentation
may only be available to members/subscribers
Basic understanding of accounts
• Mastering Treasury Office Operations written by Denis Nolan and
Gordon Amos. 159 ff in: ___ISBN 0 273 635794 Publisher - Pearson Education
(£90.00). www.pearsoned.co.uk
Syllabus - ACI Operations Certificate
Repos
• Mastering Repo Markets written by Robert Steiner ISBN10: 0273625896
ISBN13: 9780273625896
The only book covering these markets in this way, Mastering Repo Markets
contains worked examples and exercises throughout, practice drills which
reflect the style of the ACI exams, plus a complete practice examination
paper.
Derivatives
• Mastering Derivatives Markets A Step-by-Step Guide to the Products,
Applications and Risks. 4th Edition. By Francesca Taylor. Dec 2010,
Paperback, 432 pages (£50.00). ISBN13: 9780273735670; ISBN10:
0273735675 www.pearsoned.co.uk
