Technology in Investment - Chapter 5 Flashcards
(55 cards)
What are the four main challenges with reference data
1 Gather required data from separate sources
2 Store it securely
3 Update when necessary
4. Utilize it appropriately
What is a Standing Settlement Instruction?
Provide details of which “Settlement Agents” are to be used by both parties
What is reference data needed for
Automation
What is a reference data repositories (RDRs) and what departments does it feed?
A extra storage space for data from external and internal sources. Feeds back, middle and front office operations
3 Advantages to a Reference Data Repositories (RDRs)
Ensures consistent data across all platforms
Can take in data from reliable external sources like Bloomberg & Refinitiv
Data is maintained by a dedicated team
3 Disadvantages to Reference Data Repositories
Costly to build system
Costly to maintain system
Other systems will need to be enhanced to function with a RDR
What are the four components of Inter-alia
Default settlement date (Usually T+2)
What fees and charges apply
Trade currency (Buy currency)
Settlement currency
What is an ISO currency code
3 character code eg.
USD
GBP
EUR
What code would GBP, EUR and USD fall under
ISO Country code
What is a Principal Amount?
Principal Amount = ? x ? x ?or?
Principal Amount = Qty traded X Price X Price Multiplier or Price Divisor
What is 30/360
360 days in a year and all months are 30 days long
What is Actual 360
360 days in a year, calendared days in a month
Actual/365
365 days in a year, calendared days in a month
Actual/Actual
Use the actual amount of days in a year and month
Formula for calculating Accrued interest using Actual/Actual
Accrued Interest = ?/? X ?/?
T/S X C/N
T = Number of calendar days from, and including last payment date to and including the value date
S = The actual number of calendar days in the current interest period
C = Annual rate of interest
N = Number of payments
What does the ‘T’ stand for in the accrued interest calculation
T = Number of calendar days from, and including last payment date to and including the value date
What does the ‘S’ stand for in the accrued interest calculation
S = The actual number of calendar days in the current interest period
What does the ‘C’ stand for in the accrued interest calculation
C = Annual rate of interest
What does the ‘N’ stand for in the accrued interest calculation
N = Number of payments
What is a BIC code
Called a SWIFT code, it is messages between trading parties.
How many digits is a BIC Code and what format is is set in?
1-4 = Bank Code
5-6 = Country code
7-8 = Location Code
9-11 = Branch code (optional)
What type of code would this be an example of?
DEUTDEFF
BIC/SWIFT:
- DEUT identifies Deutsche Bank.
- DE is the country code for Germany.
- FF is the code for Frankfurt.
What is an IBAN Code?
Superlong code used by weird countries for the same purposes as BIC/Swfit codes
How many digits is a IBAN Code and what format is is set in?
30 +
Country the domestic bank account number
