ACI Dealing Certificate Preparation

Introduction:

The ACI Dealing qualification is a globally recognized program designed for financial market professionals involved in trading, treasury, and risk management. It provides essential knowledge of financial instruments, market operations, and compliance standards, equipping candidates with the skills to handle daily trading activities effectively. This preparation course covers key topics such as foreign exchange, money markets, derivatives, and risk management to help professionals excel in financial markets.

Objectives:

Upon completing the ACI Dealing course, participants will be able to:

• Understand time value of money principles.
• Calculate short-term interest rates and yields, including forward-forward rates.
• Comprehend the money market's purpose, the characteristics of cash market instruments, and their roles for borrowers and lenders.
• Apply spot exchange rate quotations in transactions.
• Understand basic spot FX dealing terminology and the role of specialist intermediaries.
• Hedge interest rate risk using money market and interest rate derivatives.
• Grasp fundamentals of ACI dealing options.
• Recognize principal classes and types of options and associated terminology.
• Manage and hedge risks from asset-liability mismatches on a bank’s balance sheet.
• Understand inherent risks in banking business models and the importance of effective risk management.

Training Methodology:

• Interactive training workshops
• Group discussions
• Simulations of real-world scenarios
• Tests and examinations

Course Outline:

Unit 1: Basic Interest Rate Calculations

• Value present and future cash flows.
• Determine simple interest rates for various day counts and annual basis conventions.
• Expand market understanding of euro, sterling, Swiss franc, U.S. dollar, and Japanese yen.
• Use straight-line interpolation for rates and dates.
• Understand EURIBOR, LIBOR, and EONIA.
• Convert and calculate forward-forward rates.

Unit 2: Cash Money Markets

• Define money market and classify cash market instruments.
• Use appropriate terminology for cash flows.
• Compare domestic, foreign, and euromarkets.
• Explain repos, initial margin, and custody arrangements.

Unit 3: Foreign Exchange

• Identify base and quoted currencies in exchange rates.
• Understand currency pairs and ISO currencies.
• Use bid/offer spot exchange rates.
• Distinguish between outright forward rates and interest parity.
• Understand precious metals trading.

Unit 4: Forward-Forwards, FRAs, and Money Market Futures & Swaps

• Explain forward-forward loans and deposits.
• Define and use FRAs, money market futures, and swaps.
• Describe settlement and pricing of FRAs and futures.

Unit 5: Options

• Define options and their key components.
• Explain strike price, market price, underlying, premium, and expiry.
• Understand OTC and exchange-traded options.
• Describe pay-out profiles and exercise rights of different option types.

Unit 6: Principles of Asset & Liability Management

• Define asset and liability management (ALM).
• Discuss risks affecting assets and liabilities: interest rate, currency, liquidity, credit.
• Explain gap management and ALM risk strategies.
• Use instruments for hedging ALM risks and optimizing balance sheets.

Unit 7: Principles of Risk

• Understand various risk types: market, credit, operational (legal, regulatory, reputational), and liquidity risks.