Mr John NicholsHM Ambassador to the Republic of Hungary

Financial Qualifications from the UK

A Real Export Opportunity

JANUARY 2007

Simon Culhane

Chief Executive

Securities & Investment Institute

Agenda

Who we are Who we are

What we doWhat we do

What we are looking forWhat we are looking for

Key Information

• Origins in London Stock Exchange

• A not-for-profit organisation

• Board of Trustees

• 90 Full-time Staff

• 25,000 individual members

• 9,000 student members

• 38,000 exams each year

• 10,000 publications sold pa

• International offices

““““ To set standards of professional excellence and integrity for the

securities and investment industry, providing qualifications and promoting the highest level of competence to our

members, individuals and firms

Mission Statement

Three Main Activities: Professionalism

• ATTAIN: Award Qualifications, sets standards, raise skill levels

• MAINTAIN: Provide Continuing Professional Development, Seminars & opportunities to learn

• PROMOTE TRUST: Encourage high standards of Integrity & Ethics

Who Takes our Qualifications?

• Aviva• Barclays• Citigroup• Credit Suisse• Deutsche Bank• Goldman Sachs• HSBC• J P Morgan• Lloyds TSB• Merrill Lynch• Morgan Stanley • Nomura

International• UBS

Securities & Investment Institute offers

• A wide range of qualifications in the UK Financial Industry

• Used by firms to satisfy the Regulator to ensure staff are competent

• Supported by HM Treasury

• On the appropriate list of the UK Government’s Financial Services Skills Council (FSSC)

• As an approved Awarding Body by the UK Government regulator in Education, the QCA

• Reputation as Centre of Excellence

Alliances

• Alliances & Partnerships vital

• Firms• Training deliverers • Professional bodies• Exam delivery partners

Integrity, Reputation & Ethics

• “Thought Leadership” part of the Institute’s Core values

• Professional Code

• Firms endorse code as part of Corporate Membership

• Integrity & Ethics Committee

• High profile lecture – Mark Anson, Hermes, Sep 06

• Questions on ethical behaviour included in SII exams

• Dilemmas in S&I Review

SII Examination Hierarchy

Professional / Intermediate

Advanced

Securities & Investment Institute Diploma

Introduction to Investment

Specialist Diplomas in:Investment OperationsInvestment Compliance

IAQ SII Certificate in Investments

IFA

Level 5

Level 4

Level 3SII Certificate

in Corporate Finance

Advanced Certificates:Operational Risk

Global Securities OperationsCollective Investment Schemes Administration

Leading in Qualifications• Syllabuses reviewed annually by industry

practitioners

• Questions are practitioner moderated to ensure they are up-to-date

• Extensive security procedures used

• Statistically tested for validity & reliability

• Consistency

• Exams delivered Internationally through Computer Based Testing

• All benchmark exams UK Govt QCA approved

• Regulatory benchmark qualifications for operations and advisory staff and qualifications for senior practitioners

UK: Major Global Market

• UK accounts for 44% of the trade in Foreign Equities

• 60% of International bond market in the UK

• 8.5% UK GDP direct, 3.5% indirect

• Employs 1.1m (330k in City)

• Local businesses who have internationally qualified staff will gain a competitive advantage

Key Sectors

• Capital Markets

• Advisory to Private Clients

• Fund Management

• Investment Banking

• Islamic Finance

Key Jobs: Front & Back Office

• Dealing, Brokering

• Trading

• Advising

• Managing

• Administering

• Compliance

• Risk Management

SII International Exam Model

Local Regulations Module

50 Questions1 Hour

Created and administered by local regulator

International Technical Module

100 Questions

2 Hours

Created and administered by SII

AwardAwarded by SII

Used by firms to satisfy UK Regulators

+ =

SII Derivatives Exam in UK

FSA local Regulations Module

50 Questions

1 Hour

Created and administered by SII

Technical Module in Derivatives

100 Questions

2 Hours

Created and administered by SII

AwardCertificate in Derivatives

Awarded by SII

Used by firms to satisfy UK Regulator

+ =

Example: SII Derivatives Exam in China

CEFTS local Regulations & Product training Module

Created and administered by CEFTS

Technical Module in Derivative

100 Questions

2 Hours

Created and administered by SII

AwardCertificate in Derivative

Awarded by SII

Technical Module Recognised by UK Regulator

+ =

CEFTS local Regulations & Product training Module

Created and administered by CEFTS

International Portable Qualification

Technical Module in Derivatives

100 Questions

2 Hours

Created and administered by SII

AwardCertificate in Derivatives - China

Awarded by SII+ =

FSA local Regulations Module

50 Questions

1 Hour

Created and administered by SII

Technical Module in Derivatives

AwardCertificate in Derivatives - UK

Awarded by SII

Recognised by UK Regulator

International Investment Administration (IAQ)

1. Introduction to Investment

2. Asset Servicing

3. Global Securities Operations

4. Exchange-Traded Derivatives Administration

5. Over the counter Derivatives

6. Operational Risk

7. Private Client Administration

Credit risk: assessment, management and reporting

Market risk: assessment, management and reporting

Operational risk: culture, risk management, identification and policy

Causes and effects of operational risk

The operational risk cycle from set-up to post-settlement

Integrated Risk Management

Common standards: international

bodies

Operational Risk

SII International IAQ Exam Model – for staff working in operations

One local module

50 questions, 1 hour

Created and administered by the local Regulator or a locally approved qualification provider

One module

50 questions, 1 hour each

Created and administered by the SII

Investment AdministrationQualification Awarded by SII

Used by firms to satisfy UK Regulators

+ =

Regulation Technical modules Award

One module

50 questions, 1 hour each

Created and administered by the SII

Islamic Finance Qualification (IFQ)

• Partnership SII / Ecole Supérieure des Affaires (ESA)

• Understanding the influence of Sharia Law in Finance

• Two-hour multiple choice questions

• Offered in English & Arabic

• Launched October 2006

• Gulf launch in Bahrain Dec 2006

Delivery & Support

• Workbooks

• E-Learning

• Revision Guides

• Test exams

• Locally accredited trainers

• Continuing Professional Development

• SII – CPD Online

CPD• Auto record keeping • Topics relevant to members• Development of CPD On-Line• Creation of Infolink• Webcast• Free to members• Closely linked with Membership and

Professionalism• Professional Interest Forum

S & I Review

• Official SII magazine

• Key members benefit

• Published 10 times per year

• Coverage includes;• Capital Markets• Regulations• Derivatives• Investment &

Administration• Technology & Industry

News

What are we looking for?

• Wish to work with official bodies; Regulator Central Bank Stock Exchange

• Work in partnership to transfer skills

• Help countries improve their financial industry

• Build up local training capacity

What criteria are relevant?• Empirical Data

• Size of market, combination of population size & financial sector

• Services sector > 50% of economy

• Establishment of accountancy and legal infrastructure

• Stock Market

• Structural Data• Desire to modernise

financial sector• Stable & friendly

government

Current International Coverage

• Greece

• Middle Easto Saudi Arabia o Dubai/UAE * OFFICE (Q1

07)o Lebanon o Egypt * OFFICE (Q2 07)

• South East Asia:o Singapore * OFFICE OPENo India* OFFICE OPENo Hong Kongo China * OFFICE (Q2 07)

ETQ Initiative Priority Countries

• Accession stateso Polando Hungaryo Czech Republic o Romania

• Middle Easto Omano Bahrain

• Pakistan

Interlocutors in Hungary?

• Regulator • Large 3rd party

administration facilities• Stock Exchange • Senior players in

Capital Markets• Leading Business

school or training provider