Training of Training of Financial AnalystsFinancial Analysts

JobJob

An analyst will write reports on the companies they are An analyst will write reports on the companies they are supposed to cover, trying to describe the businesses and supposed to cover, trying to describe the businesses and their opinion of the company's investment potential, their opinion of the company's investment potential, usually from a fundamental analysis standpoint. They usually from a fundamental analysis standpoint. They also summarize that report with a rating, such as "buy", also summarize that report with a rating, such as "buy", "sell", "market perform", "overweight", "hold", etc."sell", "market perform", "overweight", "hold", etc.

Financial analysts, also called Financial analysts, also called securities analystssecurities analysts and and investment analystsinvestment analysts, work for banks, insurance , work for banks, insurance companies, mutual and pension funds, securities firms, companies, mutual and pension funds, securities firms, and other businesses, helping these companies or their and other businesses, helping these companies or their clients make investment decisions. Financial analysts clients make investment decisions. Financial analysts employed in Commercial lending perform "balance sheet employed in Commercial lending perform "balance sheet analysis," examining the audited financial statements analysis," examining the audited financial statements and corollary data in order to assess lending risks. and corollary data in order to assess lending risks. Usually, financial analysts study an entire industry, Usually, financial analysts study an entire industry, assessing current trends in business practices, products, assessing current trends in business practices, products, and industry competition. They must keep abreast of and industry competition. They must keep abreast of new regulations or policies that may affect the industry, new regulations or policies that may affect the industry, as well as monitor the economy to determine its effect on as well as monitor the economy to determine its effect on earnings.earnings.

Financial analysts use spreadsheet and statistical software Financial analysts use spreadsheet and statistical software packages to analyze financial data, spot trends, and packages to analyze financial data, spot trends, and develop forecasts. develop forecasts.

On the basis of their results, they write reports and make On the basis of their results, they write reports and make presentations, usually making recommendations to buy presentations, usually making recommendations to buy or sell a particular investment or security. or sell a particular investment or security.

Senior analysts may actually make the decision to buy or Senior analysts may actually make the decision to buy or sell for the company or client if they are the ones sell for the company or client if they are the ones responsible for managing the assets. Other analysts use responsible for managing the assets. Other analysts use the data to measure the financial risks associated with the data to measure the financial risks associated with making a particular investment decision.making a particular investment decision.

Financial analysts in investment banking departments of Financial analysts in investment banking departments of securities or banking firms often work in teams, analyzing the securities or banking firms often work in teams, analyzing the future prospects of companies that want to sell shares to the future prospects of companies that want to sell shares to the public for the first time. public for the first time.

They also ensure that the forms and written materials necessary They also ensure that the forms and written materials necessary for compliance with Securities and Exchange Commission for compliance with Securities and Exchange Commission regulations are accurate and complete. regulations are accurate and complete.

They may make presentations to prospective investors about the They may make presentations to prospective investors about the merits of investing in the new company. Financial analysts merits of investing in the new company. Financial analysts also work in mergers and acquisitions departments, preparing also work in mergers and acquisitions departments, preparing analyses on the costs and benefits of a proposed merger or analyses on the costs and benefits of a proposed merger or takeover. There are buy-side analysts and sell-side analysts.takeover. There are buy-side analysts and sell-side analysts.

Some financial analysts, called Some financial analysts, called ratings analystsratings analysts (who are often (who are often employees of ratings agencies), evaluate the ability of employees of ratings agencies), evaluate the ability of companies or governments that issue bonds to repay their companies or governments that issue bonds to repay their debt. On the basis of their evaluation, a management team debt. On the basis of their evaluation, a management team assigns a rating to a company's or government's bonds. Other assigns a rating to a company's or government's bonds. Other financial analysts perform budget, cost, and credit analysis as financial analysts perform budget, cost, and credit analysis as part of their responsibilities.part of their responsibilities.

Financial analysisFinancial analysisFinancial analysisFinancial analysis refers to an assessment of the refers to an assessment of the viability viability

((життєздатністьжиттєздатність)), , stabilitystability and and profitabilityprofitability (прибутковість) (прибутковість) of of a business, sub-business or project.a business, sub-business or project.

It is performed by professionals who prepare reports using ratios that It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other make use of information taken from financial statements and other reports. These reports are usually presented to top management as reports. These reports are usually presented to top management as one of their basis in making business decisions. Based on these one of their basis in making business decisions. Based on these reports, management may:reports, management may:

Continue or discontinue its main operation or part of its business;Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its Make or purchase certain materials in the manufacture of its

product;product; Acquire or rent/lease certain machineries and equipments in the Acquire or rent/lease certain machineries and equipments in the

production of its goods;production of its goods; Issue stocks or negotiate for a bank loan to increase its working Issue stocks or negotiate for a bank loan to increase its working

capital.capital. other decisions that allow management to make an informed other decisions that allow management to make an informed

selection on various alternatives in the conduct of its business. selection on various alternatives in the conduct of its business.

GoalsGoals

Financial analysts often assess the firm's:Financial analysts often assess the firm's:

1. 1. ProfitabilityProfitability - its ability to earn income and sustain - its ability to earn income and sustain growth in both short-term and long-term. A company's growth in both short-term and long-term. A company's degree of profitability is usually based on the income degree of profitability is usually based on the income statement, which reports on the company's results of statement, which reports on the company's results of operations;operations;

2. 2. SolvencySolvency (кредитоздатність )(кредитоздатність )- its ability to pay its - its ability to pay its obligation to debtors and other third parties in the long-obligation to debtors and other third parties in the long-term;term;

3. 3. LiquidityLiquidity - its ability to maintain positive cash flow, while - its ability to maintain positive cash flow, while satisfying immediate obligations;satisfying immediate obligations;Both 2 and 3 are based on the company's balance sheet, Both 2 and 3 are based on the company's balance sheet, which indicates the financial condition of a business as which indicates the financial condition of a business as of a given point in time.of a given point in time.

4. 4. StabilityStability - the firm's ability to remain in business in the - the firm's ability to remain in business in the long run, without having to sustain significant losses in long run, without having to sustain significant losses in the conduct of its business. Assessing a company's the conduct of its business. Assessing a company's stability requires the use of both the income statement stability requires the use of both the income statement and the balance sheet, as well as other financial and and the balance sheet, as well as other financial and non-financial indicators.non-financial indicators.

EducationEducation

It is often required for analysts to earn an It is often required for analysts to earn an MBAMBA or a or a professional qualification such as professional qualification such as Chartered Financial Chartered Financial AnalystAnalyst designation (CFA) in the United States of designation (CFA) in the United States of America, or America, or Certified International Investment AnalystCertified International Investment Analyst designation (CIIA) in Europe and Asia, to advance designation (CIIA) in Europe and Asia, to advance beyond a certain level within a firm. Alternatively, beyond a certain level within a firm. Alternatively, analysts may earn a analysts may earn a Master of Science in FinanceMaster of Science in Finance (MSF).(MSF).

Faculty of Actuaries and Faculty of Actuaries and Institute of ActuariesInstitute of Actuaries

(UK)(UK)

http://www.actuaries.org.uk

What Do Actuaries Do?An actuary is a business professional who deals with the

financial impact of risk and uncertainty.

Actuaries make financial sense of the future. This expertise gives the Actuarial Profession an unrivalled appreciation of financial risk management one of the most fundamental, but poorly understood, areas of business.

Being skilled mathematicians, actuaries are able to analyze past events, assess the present risks involved, and model what could happen in the future. They may then forecast the long term financial implications of business decisions, both in terms of likely outcomes and in the variability of these outcomes.

Where are actuarial skills most in demand? Traditionally, long term financial institutions have employed actuaries in large numbers. Insurance companies and pension funds have revenue flows and payment obligations stretching many decades into the future.

Now, actuarial skills are being applied to many other areas of business as well, so members of the profession may be found in wider areas such as corporate finance, asset management and major capital projects.

Introduction to the Education System

There are four stages: Core Technical stage Core Applications stage Specialist Technical stage Specialist Applications stage

This is shown diagrammatically as:

Core Technical Stage

In the Core Technical stage there are nine subjects:

CT1 Financial Mathematics CT2 Finance and Financial Reporting CT3 Probability and Mathematical Statistics CT4 Models CT5 Contingencies CT6 Statistical Methods CT7 Economics CT8 Financial Economics CT9 Business Awareness Module

Each of CT1 - CT8 will be examined by one paper of three hours duration.

CT9 Business Awareness Module involves a 2-day residential course, with pre-course study and a post-course test, that has been designed to help people joining the Actuarial Profession understand:

the business environment they will be working in, including the related challenges

how to tackle business related problems their professional responsibilities the need to equip themselves for lifelong learning

The module consists of internet-based study, attendance at a two day course and internet-based assessment.

Core Applications Stage

In the Core Applications stage we will be covering actuarial concepts.

The main Core Applications subject will be assessed by two papers each of three hours in length, one paper covering assets and one covering liabilities and asset-liability management. The two papers will be added together to give a single mark for:

CA1 Core Applications Concepts

CA11 one paper - assetsCA12 one paper - liabilities and asset-liability

management

CA2 Modelling requires attendance at a two day course with a practical data handling assessment on the second day. The purpose of the first day is to ensure that all students understand the nature of the assessment and are familiar with the software provided and on the second day the assessment takes place.

The successful candidate will be able to demonstrate: Analysis and summary of data Development of a model with audit trail Ability to apply results Interpretation of results within a general business context Communication of results to a technical audience

CA3 CommunicationsCA3 Communications has two questions, each testing has two questions, each testing a different type of written communication. The paper is of a different type of written communication. The paper is of

three hours duration.three hours duration.

Specialist Technical stageSpecialist Technical stageStudents will in future be required to pass two subjects at

the Specialist Technical stage. There are seven Specialist Technical subjects:

ST0 Alternative Specialist Technical ST1 Health and Care Specialist Technical ST2 Life Insurance Specialist Technical ST3 General Insurance Specialist Technical ST4 Pensions and other Benefits Specialist Technical ST5 Finance and Investment Specialist Technical A ST6 Finance and Investment Specialist Technical B

Each of ST1 - ST6 will be tested by one examination paper of three hours in length.

Specialist Applications stageSpecialist Applications stage

There are seven Specialist Applications subjects. Students There are seven Specialist Applications subjects. Students required to pass one subject chosen from:required to pass one subject chosen from:

SA0 Research Dissertation Specialist ApplicationsSA0 Research Dissertation Specialist Applications SA1 Health and Care Specialist ApplicationsSA1 Health and Care Specialist Applications SA2 Life Insurance Specialist ApplicationsSA2 Life Insurance Specialist Applications SA3 General Insurance Specialist ApplicationsSA3 General Insurance Specialist Applications SA4 Pensions and other Benefits Specialist ApplicationsSA4 Pensions and other Benefits Specialist Applications SA5 Finance Specialist ApplicationsSA5 Finance Specialist Applications SA6 Investment Specialist ApplicationsSA6 Investment Specialist Applications

Each of SA1–SA6 are tested by an examination paper of Each of SA1–SA6 are tested by an examination paper of three hours duration. three hours duration.

UK Practice ModulesUK Practice Modules

A UK Practice Module has to be taken by students working A UK Practice Module has to be taken by students working in the UK. This is tested by multiple choice examinations in the UK. This is tested by multiple choice examinations each of one and a half hours duration. each of one and a half hours duration.

The first part is common to all practice areas and tests the The first part is common to all practice areas and tests the generic principles of UK Financial Services. generic principles of UK Financial Services.

The second part tests UK business practice, regulation, The second part tests UK business practice, regulation, legislationlegislation (законодавча діяльність) (законодавча діяльність) and professional and professional guidance notes in specific areas. guidance notes in specific areas.

Qualifications

1. Class of Associate

Students who have completed all but the Specialist Technical and Specialist Applications subjects and who have completed the appropriate professionalism course and meet the work-based skills requirement, may apply to transfer to the class of Associate member.

Students do not automatically transfer to Associate prior to taking the Specialist Technical and Specialist Applications subjects, but can apply to transfer to the class of Associate if they no longer wish to continue taking examinations.

2. Class of Fellow

Students will be admitted to the Fellowship on having successfully completed or passed the Core Technical subjects, Core Applications subjects, two of the Specialist Technical subjects, one of the Specialist Applications subjects and having met the work-based skills requirement.An applicant for admission to the Institute Class of Fellow must have attained the age of 23 years.

3. Diploma in Actuarial Techniques

The joint Diploma in Actuarial Techniques was introduced in April 1996. The Diploma in Actuarial Techniques will be sent directly to students completing all of the Core Technical stage subjects: CT1, CT2, CT3, CT4, CT5, CT6, CT7, CT8 and CT9.

4. Certificate in Finance and Investment

The Certificate in Finance and Investment is a joint certificate and will be sent to all students of the Faculty and Institute of Actuaries who complete or are exempted from CT1, CT2, CT4, CT7, CT8, CT9 and CA1 .

Chartered Financial Analyst Chartered Financial Analyst Institute (USA)Institute (USA)

http://www.cfainstitute.org/http://www.cfainstitute.org/

Chartered Financial AnalystChartered Financial Analyst ( (CFACFA) is a professional ) is a professional designation offered by the CFA Institute to financial designation offered by the CFA Institute to financial analysts who complete a series of analysts who complete a series of three examinations three examinations and work for at least four yearsand work for at least four years in the investment in the investment decision making process. CFA charterholders are also decision making process. CFA charterholders are also obliged to adhere to a strict Code of Ethics and obliged to adhere to a strict Code of Ethics and Standards (a commitment that, above all else, put the Standards (a commitment that, above all else, put the interests of clients first) governing their professional interests of clients first) governing their professional conduct. conduct.

The CFA designation is a qualification for people engaged The CFA designation is a qualification for people engaged in the financial and investment sector.in the financial and investment sector.

From 1963 (when the CFA designation was first used) to From 1963 (when the CFA designation was first used) to 2006, approximately 69,600 people from 126 different 2006, approximately 69,600 people from 126 different countries have been awarded the right to use the CFA countries have been awarded the right to use the CFA designation. As of 2006, more than 116,000 more people designation. As of 2006, more than 116,000 more people are currently enrolled to take one of the examinations.are currently enrolled to take one of the examinations.

The CFA program began in the United States, but has The CFA program began in the United States, but has become increasingly international with many people become increasingly international with many people becoming charterholders across Europe, Asia and becoming charterholders across Europe, Asia and Australasia. By 2003 fewer than half the candidates in Australasia. By 2003 fewer than half the candidates in the CFA program were based in the US and Canada, the CFA program were based in the US and Canada, with most of the other candidates based in Asia or with most of the other candidates based in Asia or Europe. India and China have shown some of the Europe. India and China have shown some of the highest growth from 2005-2006 with increases of 25% highest growth from 2005-2006 with increases of 25% and 53% respectively in the total number of and 53% respectively in the total number of charterholders.charterholders.

The basic requirements for participation in the CFA The basic requirements for participation in the CFA program include holding or being in the final year of (a) program include holding or being in the final year of (a) four-year university degreefour-year university degree (or international equivalent) (or international equivalent) or having or having four yearsfour years of qualified, professional of qualified, professional work work experienceexperience in an investment decision-making process. in an investment decision-making process. The program focuses on portfolio management and The program focuses on portfolio management and financial analysis, and provides a generalist knowledge financial analysis, and provides a generalist knowledge of other areas of finance.of other areas of finance.

The CFA examThe CFA exam

Candidates generally take one exam per year over three Candidates generally take one exam per year over three years and are written at a postgraduate level for financial years and are written at a postgraduate level for financial professionals. Exams are challenging, with only 39% professionals. Exams are challenging, with only 39% passing the Level I exam in December 2006. The June passing the Level I exam in December 2006. The June 2006 Level I Exam resulted in a worldwide pass rate of 2006 Level I Exam resulted in a worldwide pass rate of 40%; Europe achieved the highest pass rate for that 40%; Europe achieved the highest pass rate for that exam with 57%. The Level II and III passing rates for exam with 57%. The Level II and III passing rates for

2006 were 48% and 76% respectively.2006 were 48% and 76% respectively.

The Level I study program emphasizes tools and inputs The Level I study program emphasizes tools and inputs and includes an introduction to asset valuation and and includes an introduction to asset valuation and portfolio management techniques. portfolio management techniques.

The Level II study program emphasizes asset valuation The Level II study program emphasizes asset valuation and includes applications of the tools and inputs and includes applications of the tools and inputs (including economics, financial statement analysis(including economics, financial statement analysis (аналіз фінансової звітності)(аналіз фінансової звітності), and quantitative , and quantitative methods) in asset valuation. methods) in asset valuation.

The Level III study program emphasizes portfolio The Level III study program emphasizes portfolio management and includes strategies for applying the management and includes strategies for applying the tools, inputs, and asset valuation models in managing tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for equity, fixed income, and derivative investments for individuals and institutions. individuals and institutions.

All three exams are administered on paper, on a single All three exams are administered on paper, on a single day; the Level I exam is administered twice a year day; the Level I exam is administered twice a year (usually the first weekend of June and December). The (usually the first weekend of June and December). The Level II and III exams are administered once a year, Level II and III exams are administered once a year, usually the first weekend of June. Each exam consists of usually the first weekend of June. Each exam consists of two three-hour sessions. Both Level I and Level II are two three-hour sessions. Both Level I and Level II are entirely multiple choice, while Level III consists of a entirely multiple choice, while Level III consists of a session of short-answer questions and a session that is session of short-answer questions and a session that is multiple choice. On the multiple-choice sections, there is multiple choice. On the multiple-choice sections, there is no penalty for wrong answers.no penalty for wrong answers.

Candidates who have taken the exam receive a score Candidates who have taken the exam receive a score report that is intended to be fairly unspecific: there is no report that is intended to be fairly unspecific: there is no overall score for the test, only a Pass/Fail result. For overall score for the test, only a Pass/Fail result. For each category of questions, each test-taker is given a each category of questions, each test-taker is given a broad range within which his or her performance falls: broad range within which his or her performance falls: below 50%, between 50% and 70%, and above 70%. below 50%, between 50% and 70%, and above 70%. There is no pre-set passing grade for the exams. The There is no pre-set passing grade for the exams. The threshold for passing is 70% of the average of the top threshold for passing is 70% of the average of the top 10% of all scores. The wide variation in pass rates from 10% of all scores. The wide variation in pass rates from year to year may partially stem from this calculation.year to year may partially stem from this calculation.

The CFA curriculumThe CFA curriculum

The curriculum for the CFA program includes:The curriculum for the CFA program includes:

Ethics and Professional Standards Ethics and Professional Standards Quantitative Methods (such as the time value of money, Quantitative Methods (such as the time value of money,

and statistical inference) and statistical inference) Economics Economics Financial Statement Analysis Financial Statement Analysis Corporate Finance Corporate Finance Analysis of Investments (stocks, bonds, derivatives, Analysis of Investments (stocks, bonds, derivatives,

venture capital, real estate, etc.) venture capital, real estate, etc.) Portfolio Management and Analysis (asset allocation, Portfolio Management and Analysis (asset allocation,

portfolio risk, performance measurement, etc.) portfolio risk, performance measurement, etc.)

The ethics section is primarily concerned with compliance The ethics section is primarily concerned with compliance and reporting rules when managing an investor's money and reporting rules when managing an investor's money or when issuing research reports, although there are or when issuing research reports, although there are some rules which pertain to more general professional some rules which pertain to more general professional behavior (such as prohibitions against plagiarism). There behavior (such as prohibitions against plagiarism). There are also rules that specifically relate to the proper use of are also rules that specifically relate to the proper use of the designation for charterholders and candidates. All of the designation for charterholders and candidates. All of these rules are delineated in the 'Code and Standards'.these rules are delineated in the 'Code and Standards'.

The section on quantitative analysis is dominated by The section on quantitative analysis is dominated by statistics and time series analysis. Other financial statistics and time series analysis. Other financial fundamentals such as the time value of money are also fundamentals such as the time value of money are also addressed. The statistics topics are fairly broad, but the addressed. The statistics topics are fairly broad, but the main focuses are risk analysis, hypothesis testing and main focuses are risk analysis, hypothesis testing and regression analysis. For the test, only two types of regression analysis. For the test, only two types of calculator are allowed (the Hewlett Packard 12C and the calculator are allowed (the Hewlett Packard 12C and the Texas Instruments BA II Plus). The test also features Texas Instruments BA II Plus). The test also features other quantitative topics, but these are covered in other other quantitative topics, but these are covered in other sections. For example, calculating depreciation of assets sections. For example, calculating depreciation of assets is a part of financial statement analysis (accounting), and is a part of financial statement analysis (accounting), and determining currency arbitrage is a part of international determining currency arbitrage is a part of international economics.economics.

Both micro and macro economics are covered. There are Both micro and macro economics are covered. There are sections for international economics, mainly related to sections for international economics, mainly related to currency conversions and how they are affected by currency conversions and how they are affected by international interest rates and inflation.international interest rates and inflation.

The accounting section is heavily tested at Levels I and II, The accounting section is heavily tested at Levels I and II, but is not a significant part of Level III. It is divided into but is not a significant part of Level III. It is divided into financial statements analysis and corporate finance. financial statements analysis and corporate finance. Financial statement analysis considers the statement of Financial statement analysis considers the statement of cash flows, the balance sheet, and the income cash flows, the balance sheet, and the income statement. Each of these documents gives a distinct statement. Each of these documents gives a distinct view into the state and operations of a company. view into the state and operations of a company. Corporate finance uses these views of the company to Corporate finance uses these views of the company to make decisions about projects, deciding how they will make decisions about projects, deciding how they will impact the company.impact the company.

The section on security analysis is divided by the types of The section on security analysis is divided by the types of security. There is a general section on global markets, security. There is a general section on global markets, sections on equity (stocks), fixed income (bonds), and sections on equity (stocks), fixed income (bonds), and derivatives (futures, forwards, options and swaps). The derivatives (futures, forwards, options and swaps). The first levels of the test require familiarity with these first levels of the test require familiarity with these instruments, then the focus develops into correctly instruments, then the focus develops into correctly valuing them, and how to properly use them.valuing them, and how to properly use them.

The final section is portfolio management. This section The final section is portfolio management. This section increases in importance with each of the three levels. increases in importance with each of the three levels. Portfolio management is an analysis of the process of Portfolio management is an analysis of the process of managing money. It depends heavily on all of the other managing money. It depends heavily on all of the other topics. When managing money for others, ethics is topics. When managing money for others, ethics is obviously important. This section deals with how the obviously important. This section deals with how the investors' needs are met by the portfolio manager. investors' needs are met by the portfolio manager. Modern portfolio theory is also tested: the efficient Modern portfolio theory is also tested: the efficient frontier, Capital asset pricing model, etc.frontier, Capital asset pricing model, etc.

Fee ScheduleFee Schedule

    To enter the CFA Program, you must pay:To enter the CFA Program, you must pay:     An initial, An initial, one-time onlyone-time only  registration feeregistration fee An enrollment An enrollment fee forfee for your your first examfirst exam (Level I) (Level I)     Fees for New CandidatesFees for New Candidates

Payment deadlines: Payment deadlines: December 2007:December 2007: 15 Mar 07 15 Aug 07 17 Sep 07 15 Mar 07 15 Aug 07 17 Sep 07

Registration FeeRegistration Fee(one-time)(one-time) US$390 US$390 US$465         US$390 US$390 US$465        

Exam Fee: Level IExam Fee: Level I(enrollment)(enrollment) US$370 US$455 US$690         US$370 US$455 US$690        

Total Cost to EnterTotal Cost to Enterthe CFA Program:the CFA Program: US$760 US$845 US$1155    US$760 US$845 US$1155   

Association of Certified Association of Certified International Investment AnalystsInternational Investment Analysts

http://web.aciia.org/http://web.aciia.org/

Certified International Investment AnalystCertified International Investment Analyst ( (CIIACIIA) is a ) is a designation offered by the Association of Certified designation offered by the Association of Certified International Investment Analysts (ACIIA) to professional International Investment Analysts (ACIIA) to professional financial analysts; candidates may be financial analysts, financial analysts; candidates may be financial analysts, portfolio managers and / or investment advisors.portfolio managers and / or investment advisors.

To be awarded the CIIA, candidates must pass To be awarded the CIIA, candidates must pass two two "Common Knowledge" Exams"Common Knowledge" Exams and a third and a third National/Regional ExamNational/Regional Exam (examining knowledge of (examining knowledge of specific markets), and have specific markets), and have 3 years relevant experience3 years relevant experience. . The exams are taken twice per year and are written at a The exams are taken twice per year and are written at a postgraduate level.postgraduate level.

The exams are implemented by 27 national Associations of The exams are implemented by 27 national Associations of Financial Analysts, or Federations of Financial Analysts Financial Analysts, or Federations of Financial Analysts Associations. Federations of Analysts Associations that Associations. Federations of Analysts Associations that are members of are members of ACIIAACIIA, are inter alia the Asia-pacific , are inter alia the Asia-pacific Securities Analysts Federation (Securities Analysts Federation (ASAFASAF) European ) European Federation of Financial Analysts Societies (Federation of Financial Analysts Societies (EFFASEFFAS) and ) and Brazil / Latin America Associação Brasileira dos Brazil / Latin America Associação Brasileira dos Analistas do Mercado de Capitais (ABAMEC).Analistas do Mercado de Capitais (ABAMEC).

The Common Knowledge Exams The Common Knowledge Exams are divided into two levels - the are divided into two levels - the Foundation and Final Level. Examined are essential skills and Foundation and Final Level. Examined are essential skills and knowledge required for professionals working in investment markets knowledge required for professionals working in investment markets common in all countries.common in all countries.

Foundation LevelFoundation Level

Exam Format: multiple choice, calculation, discursive and short Exam Format: multiple choice, calculation, discursive and short essay questionsessay questions

Exam 1 3.10hrs Equity valuation and analysis Exam 1 3.10hrs Equity valuation and analysis Financial accounting and statement analysis Financial accounting and statement analysis Corporate Finance Corporate Finance

Exam 2 2.40hrs Fixed income valuation and analysis Exam 2 2.40hrs Fixed income valuation and analysis Economics Economics

Exam 3 3.10hrs Derivative valuation and analysisExam 3 3.10hrs Derivative valuation and analysis Portfolio management Portfolio management

Graduates who already have relevant qualifications may be exempt from Graduates who already have relevant qualifications may be exempt from the Foundation Level exams. Contact your local national/regional the Foundation Level exams. Contact your local national/regional society for further details. society for further details.

Final LevelFinal Level

Exam Format: full and mini-case study questions and in-depth essay. Exam Format: full and mini-case study questions and in-depth essay.

Exam 1Exam 1 3hrs 3hrs Corporate financeCorporate financeEconomics Economics Financial accounting and statement analysis Financial accounting and statement analysis Equity valuation and analysis Equity valuation and analysis

Exam 2Exam 2 3hrs3hrs Fixed income valuation and analysis Fixed income valuation and analysis Derivative valuation and analysis Derivative valuation and analysis Portfolio management Portfolio management

National/Regional ExamNational/Regional Exam

Exam 1Exam 1 3hrs 3hrs Regulation Regulation

Ethics Ethics

Financial statements analysis Financial statements analysis

Market structures and instruments Market structures and instruments

Multilingual ExamsMultilingual Exams

The Common Knowledge Exams can be conducted in The Common Knowledge Exams can be conducted in Chinese, English, French, German, Italian, Japanese, Chinese, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian and Spanish. Other Korean, Polish, Portuguese, Russian and Spanish. Other languages may be made available in the near future, languages may be made available in the near future, please check with your local national/regional society. please check with your local national/regional society.

Recommended study time:Recommended study time:

The recommended total hours of study necessary for the The recommended total hours of study necessary for the whole Common Knowledge Exams is a minimum of 500 whole Common Knowledge Exams is a minimum of 500 hours. These hours include time spent working on hours. These hours include time spent working on exercises, case studies and private study.exercises, case studies and private study.

American Academy of Financial American Academy of Financial ManagementManagement

http://www.financialanalyst.orghttp://www.financialanalyst.org

The AAFM was founded in 1996, via a merger between the The AAFM was founded in 1996, via a merger between the American Academy of Financial Management & Analysts American Academy of Financial Management & Analysts (AAFMA) and the Founders Advisory Committee of the (AAFMA) and the Founders Advisory Committee of the Original Tax and Estate Planning Law Review. The Original Tax and Estate Planning Law Review. The AAFM is a professional association governed by a Board AAFM is a professional association governed by a Board of Standards and a membership code of ethics and of Standards and a membership code of ethics and standards of practice. The AAFM operates in most standards of practice. The AAFM operates in most countries as a ‘society’ or non-profit association, with the countries as a ‘society’ or non-profit association, with the members of the local or regional chapter making up the members of the local or regional chapter making up the ‘owners’ of the society. At all times the AAFM and its ‘owners’ of the society. At all times the AAFM and its members are accountable to the community and to the members are accountable to the community and to the board of standards. board of standards.

The American Academy of Financial Management The American Academy of Financial Management maintains more than 20 designations in the finance maintains more than 20 designations in the finance arena, with highly specialized role-based post-nominal arena, with highly specialized role-based post-nominal awards. Members must either have come through one of awards. Members must either have come through one of the AAFM Accredited University Finance programs (such the AAFM Accredited University Finance programs (such as Universities within AACSB - The Association to as Universities within AACSB - The Association to Advance Collegiate Schools of Business, ACBSP – The Advance Collegiate Schools of Business, ACBSP – The Association of Collegiate Business Schools and Association of Collegiate Business Schools and Programs, etc), through an Executive Training Program, Programs, etc), through an Executive Training Program, or in some rare cases through grandfathering by way of or in some rare cases through grandfathering by way of board/peer review. board/peer review.

AAFM is best recognized for its designations being in AAFM is best recognized for its designations being in alliance with the AACSB International Accreditation alliance with the AACSB International Accreditation Agency, the ACBSP Accreditation Agency, and listed Agency, the ACBSP Accreditation Agency, and listed and disclosed with various authorities such as: Investor and disclosed with various authorities such as: Investor Education, Department of Labor, or National Association Education, Department of Labor, or National Association of Securities Dealers (NASD). AAFM Designations are of Securities Dealers (NASD). AAFM Designations are available as executive certification courses for accredited available as executive certification courses for accredited degree holders in: North and South America as well as degree holders in: North and South America as well as Asia, India, and the Middle East. Asia, India, and the Middle East.

Chartered Wealth ManagerChartered Wealth ManagerThe CWM is only available for wealth managers with an The CWM is only available for wealth managers with an accredited masters degree, law degree, CPA, PhD or accredited masters degree, law degree, CPA, PhD or specialized executive training.specialized executive training.

Chartered Asset ManagerChartered Asset ManagerThe CAM is only available for asset managers with an The CAM is only available for asset managers with an accredited masters degree, law degree, MBA, CPA, PhD accredited masters degree, law degree, MBA, CPA, PhD or specialized executive training.or specialized executive training.

Chartered Portfolio ManagerChartered Portfolio ManagerThe CPM is only available for portfolio managers with an The CPM is only available for portfolio managers with an accredited masters degree, MBA, law degree, CPA, PhD accredited masters degree, MBA, law degree, CPA, PhD or specialized executive training.or specialized executive training.

Master Financial ProfessionalMaster Financial ProfessionalThe MFP is only available for financial planning The MFP is only available for financial planning managers with an AACSB or ACBSP accredited degree, managers with an AACSB or ACBSP accredited degree, ABA (American Bar Association) law degree, MBA, CPA, ABA (American Bar Association) law degree, MBA, CPA, PhD or specialized executive training.PhD or specialized executive training.

The AAFM has mutual legal recognition agreements with The AAFM has mutual legal recognition agreements with over 560 accredited and registered business schools to over 560 accredited and registered business schools to convey this credential to registered graduates of these convey this credential to registered graduates of these top institutions.top institutions.

Certified Market AnalystCertified Market AnalystThe Certified Market Analyst or Chartered Market The Certified Market Analyst or Chartered Market Analyst credential is only available for financial analysts Analyst credential is only available for financial analysts and market analysts with an earned & accredited and market analysts with an earned & accredited masters degree, law degree, MBA, CPA, PhD or masters degree, law degree, MBA, CPA, PhD or specialized AAFM executive training. The CMA has a specialized AAFM executive training. The CMA has a focus on technical and fundamental analysis. focus on technical and fundamental analysis. Requirements are very high which include: graduate Requirements are very high which include: graduate education, ethics, continuing education, and vast education, ethics, continuing education, and vast experience with research, publications and investments.experience with research, publications and investments.

Chartered Trust and Estate PlannerChartered Trust and Estate PlannerThe CTEP is only available for estates and trust The CTEP is only available for estates and trust managers with an accredited degree, law degree, MBA, managers with an accredited degree, law degree, MBA, CPA, PhD or specialized executive training. Trust and CPA, PhD or specialized executive training. Trust and estates experience and knowledge is required.estates experience and knowledge is required.

Registered Financial SpecialistRegistered Financial SpecialistThe RFS is only available for financial planning The RFS is only available for financial planning managers with an accredited degree, MBA, law degree, managers with an accredited degree, MBA, law degree, CPA, PhD or specialized executive training. Criteria for CPA, PhD or specialized executive training. Criteria for this award includes ethics, continuing education, testing, this award includes ethics, continuing education, testing, education, and degree.education, and degree.

The AAFM has always required a college degree to be a The AAFM has always required a college degree to be a candidate for certification. AAFM members are mainly candidate for certification. AAFM members are mainly from AACSB or ACBSP government recognized from AACSB or ACBSP government recognized business schools. Thus, a college graduate would have business schools. Thus, a college graduate would have already successfully completed 30 or more college level already successfully completed 30 or more college level courses and exams along with ethics and courses and exams along with ethics and professionalism courses to earn a degree to then be professionalism courses to earn a degree to then be eligible for professional certification.eligible for professional certification.

The Association of The Association of Corporate Treasurers Corporate Treasurers

(UK) (UK)

http://www.treasurers.org

The Association of Corporate Treasurers (ACT) is the The Association of Corporate Treasurers (ACT) is the international body for finance professionals working in international body for finance professionals working in treasury, risk and corporate finance. Through the ACT treasury, risk and corporate finance. Through the ACT we come together as practitioners, technical experts and we come together as practitioners, technical experts and educators in a range of disciplines that underpin the educators in a range of disciplines that underpin the financial security and prosperity of an organisation.financial security and prosperity of an organisation.

The ACT defines and promotes best practice in treasury The ACT defines and promotes best practice in treasury and makes representations to government, regulators and makes representations to government, regulators and standard setters.and standard setters.

Treasury is an integral element of the financial Treasury is an integral element of the financial management of a business and as the environment in management of a business and as the environment in which companies operate evolves, the role of corporate which companies operate evolves, the role of corporate treasury also changes.treasury also changes.

The ACT is the only UK based professional body to offer The ACT is the only UK based professional body to offer specialist qualifications in treasury, risk and corporate specialist qualifications in treasury, risk and corporate finance. The membership qualifications, recognised as finance. The membership qualifications, recognised as the global benchmark for treasury education, ensure that the global benchmark for treasury education, ensure that the ACT represents a highly qualified community of the ACT represents a highly qualified community of professionals.professionals.

The ACT QualificationsThe ACT Qualifications

Professional membership of the ACT may be obtained at Professional membership of the ACT may be obtained at two levels:two levels:

Associateship Associateship Membership Membership

The Associateship qualification is set at professional The Associateship qualification is set at professional entry level and gives a thorough overview of the entry level and gives a thorough overview of the fundamentals of treasury management. These concepts fundamentals of treasury management. These concepts are developed further in the Membership examinations.are developed further in the Membership examinations.

The ACT The ACT Membership Membership qualifications:qualifications:

AMCT – Diploma in Treasury, Risk and Corporate AMCT – Diploma in Treasury, Risk and Corporate FinanceFinance

MCT – Advanced Diploma in Treasury, Risk and MCT – Advanced Diploma in Treasury, Risk and Corporate Finance, and the Certificate qualifications. Corporate Finance, and the Certificate qualifications.

AMCT Syllabus AMCT Syllabus

There are two levels of papers in the AMCT syllabus – There are two levels of papers in the AMCT syllabus – Foundation Papers, which are core to the understanding Foundation Papers, which are core to the understanding of treasury and accountancy principles; and Associate of treasury and accountancy principles; and Associate Papers, which provide the building blocks for the modern Papers, which provide the building blocks for the modern treasurer, examining and analysing the principles of treasurer, examining and analysing the principles of corporate treasury.corporate treasury.

An AMCT student’s study is made up of seven papers, four An AMCT student’s study is made up of seven papers, four Foundation Papers and three chosen Associate Papers. Foundation Papers and three chosen Associate Papers.

Foundation PapersFoundation Papers::

Financial & Management AccountingFinancial & Management Accounting

Economics & Statistical AnalysisEconomics & Statistical Analysis

Corporate TaxationCorporate Taxation

Business LawBusiness Law

Associate PapersAssociate Papers

Liquidity ManagementLiquidity Management Risk ManagementRisk Management Corporate Finance & FundingCorporate Finance & Funding Corporate Finance & Funding FastTrackCorporate Finance & Funding FastTrack

International Cash Management (Certificate)International Cash Management (Certificate) Financial Mathematics and Modelling Financial Mathematics and Modelling

(Certificate)(Certificate) Risk Management for Pensions (Certificate) Risk Management for Pensions (Certificate)

CertificatesCertificates

Certificate papers may be taken independently of the Certificate papers may be taken independently of the AMCT qualification and are recognised as qualifications AMCT qualification and are recognised as qualifications in their own right. There are currently three Certificate in their own right. There are currently three Certificate papers:papers:

International Cash Management (CertICM)International Cash Management (CertICM)

Financial Mathematics and Modelling (CertFMM)Financial Mathematics and Modelling (CertFMM)

Risk Management for Pensions (CertRMP)Risk Management for Pensions (CertRMP)

The Association of Corporate Treasurers' The Association of Corporate Treasurers' Certificate in Certificate in Financial Mathematics and ModellingFinancial Mathematics and Modelling (CertFMM) is (CertFMM) is designed to cover three critical areas of financial risk designed to cover three critical areas of financial risk mathematics: money market calculations, options and mathematics: money market calculations, options and portfolio management.portfolio management.

International Cash Management explores the instruments, International Cash Management explores the instruments, infrastructure and techniques of managing cash from the infrastructure and techniques of managing cash from the basics of payments and collections to foreign exchange basics of payments and collections to foreign exchange swaps and outrights. It explains the links with working swaps and outrights. It explains the links with working capital management together with the effects of legal, capital management together with the effects of legal, tax, technology and regulatory issues on cash tax, technology and regulatory issues on cash management and banking relationships.management and banking relationships.

By completing this paper you will:By completing this paper you will:

Be able to demonstrate a detailed understanding of Be able to demonstrate a detailed understanding of international cash management from both a corporate international cash management from both a corporate and banking perspective.and banking perspective.

Understand the wider context in which cash Understand the wider context in which cash management fits within corporate treasury and management fits within corporate treasury and international banking.international banking.

Understand global money transmission techniques and Understand global money transmission techniques and the details of major clearing systems.the details of major clearing systems.

Be able to add real value when organising and Be able to add real value when organising and negotiating international cash management negotiating international cash management arrangements.arrangements.

Be equipped with a practical toolkit for practical Be equipped with a practical toolkit for practical international cash management, including the use of international cash management, including the use of instruments and strategies for optimising cash instruments and strategies for optimising cash management efficiency.management efficiency.

The Association of Corporate Treasurers' The Association of Corporate Treasurers' Certificate in Certificate in Financial Mathematics and ModellingFinancial Mathematics and Modelling (CertFMM) is (CertFMM) is designed to cover three critical areas of financial risk designed to cover three critical areas of financial risk mathematics: money market calculations, options and mathematics: money market calculations, options and portfolio management.portfolio management.

Financial Mathematics & Modelling provides the tools to Financial Mathematics & Modelling provides the tools to calculate, understand and interpret interest rate and calculate, understand and interpret interest rate and currency risk from a mathematical viewpoint and currency risk from a mathematical viewpoint and analyses how these can be applied to practical situations. analyses how these can be applied to practical situations. Techniques such as duration, convexity and portfolio Techniques such as duration, convexity and portfolio analysis, including the trade-off between risk and return analysis, including the trade-off between risk and return are discussed. The course explores option theory and the are discussed. The course explores option theory and the powerful ideas behind option pricing. It provides an powerful ideas behind option pricing. It provides an insight into Value at Risk measures and its potential insight into Value at Risk measures and its potential value and limitations as a useful risk measure. This value and limitations as a useful risk measure. This Certificate is highly practical and will be taught using Certificate is highly practical and will be taught using Excel.Excel.

By completing this paper you will:By completing this paper you will:

Be able to calculate prices and yields for a variety of Be able to calculate prices and yields for a variety of financial instruments.financial instruments.

Be able to explain and analyse interest rate sensitivity.Be able to explain and analyse interest rate sensitivity. Be able to demonstrate how derivatives are used in Be able to demonstrate how derivatives are used in

financial risk managementfinancial risk management Be able to price interest rate and currency derivatives.Be able to price interest rate and currency derivatives. Understand the concepts behind option pricing theory.Understand the concepts behind option pricing theory. Be able to explain how portfolios can be measured in Be able to explain how portfolios can be measured in

terms of risk and the limitations of those measures.terms of risk and the limitations of those measures. Be able to describe Value at Risk and how it is used.Be able to describe Value at Risk and how it is used.

The Association of Corporate Treasurers' The Association of Corporate Treasurers' Certificate Paper Certificate Paper in Risk Management for Pensionsin Risk Management for Pensions (CertRMP) is (CertRMP) is designed to enable you to understand, analyse and designed to enable you to understand, analyse and manage the risks associated with company pension manage the risks associated with company pension funds.funds.

CertRMP equips finance professionals with a fundamental CertRMP equips finance professionals with a fundamental understanding of the legislative and regulatory understanding of the legislative and regulatory framework surrounding pensions, including the role of framework surrounding pensions, including the role of trustees, risk management implications and associated trustees, risk management implications and associated governance issues. By illustrating how analysts and governance issues. By illustrating how analysts and shareholders view the risk profile of a company on the shareholders view the risk profile of a company on the basis of the existence of a pension fund, it provides the basis of the existence of a pension fund, it provides the skills to manage and understand this risk. The Certificate skills to manage and understand this risk. The Certificate explores the impact of the pension fund on the cost of explores the impact of the pension fund on the cost of capital, enabling the finance professional to manage the capital, enabling the finance professional to manage the financial assets of the business and address funding financial assets of the business and address funding requirements.requirements.

On completion of this paper you will be able to:On completion of this paper you will be able to:

Understand key aspects of the pensions framework and Understand key aspects of the pensions framework and provision in the UK and compare these with other key provision in the UK and compare these with other key jurisdictionsjurisdictions

Compare and contrast the management of various types Compare and contrast the management of various types of company pensionof company pension

Explain the roles and responsibilities of key persons Explain the roles and responsibilities of key persons associated with the management of a pension schemeassociated with the management of a pension scheme

Understand and describe the financial risks associated Understand and describe the financial risks associated with pension funds for both Fund and Companywith pension funds for both Fund and Company

Identify and assess your company’s key pension risk Identify and assess your company’s key pension risk exposures and strategies to manage themexposures and strategies to manage them

Discuss the constraints/inhibitors to actions or decisions Discuss the constraints/inhibitors to actions or decisions sought for the purposes of risk managementsought for the purposes of risk management

Recommended study time – 100-120 hoursRecommended study time – 100-120 hours

Examination time – 3 hoursExamination time – 3 hours

The pass mark for each paper is normally 50% The pass mark for each paper is normally 50%