This unit applies to job roles in the financial markets trading sector.

ELEMENT

PERFORMANCE CRITERIA

1. Identify trading limits

1.1. Various types of trading limits in an organisation are accessed and accurately interpreted

1.2. The process for establishing trading limits in the organisation is identified

1.3. Organisational limits are documented and the process for communicating to relevant personnel is determined

2. Respond to trading limit breaches

2.1. The process for identifying trading breaches, including by whom, how and when and for reporting them to relevant personnel is established and complied with

2.2. The process for approving limit breaches and the person responsible for that process is determined

2.3. The organisational process for dealing with breaches for which there is no approval is identified

2.4. Consequences of a breach are managed according to organisational guidelines

3. Review limits

3.1. The process for determining the allocation of risk in the organisation is known and consistently applied

3.2. Factors that are critical in determining limits are identified and analysed

3.3. Relevant personnel are promptly informed of changes in trading limits

3.4. Changes to trading limits are communicated to relevant staff using relevant organisational processes

Required skills

well-developed communication skills to:

determine and confirm organisational trading limitrequirements, using questioning and active listening as required

provide advice on trading limits to others

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

numeracy and IT skills to:

apply statistical techniques

use spreadsheets and databases

useinternet information

highly developed research and analysis for accessing, interpreting and managing complex information

well-developed literacy skills to:

read and interpret organisational and industry information

identify economic environmental factors which affect financial services and markets

produce trading information

judgement skills for forming recommendations in complex situations

organisational skills, including the ability to plan and sequence work and work effectively in a constantly changing environment

self-management skills for complying with ethical, legal and procedural requirements

Required knowledge

the economic environment, including:

characteristics and impacts of economic and business cycles

government monetary and fiscal policies

interest rates, exchange rates, inflation

data collection and management systems

organisational guidelines, goals and objectives

structure and inter-relationships within the financial markets

theories of investment, portfolio management and management of investment risk

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

identify and monitor financial trading limits using a range of data sources

deal effectively and promptly with financial trading limit breaches following all required industry and organisational policies and procedures

access and comply with relevant legislation affecting financial trading.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

access to and the use of a range of common office equipment, technology, software and consumables

access to financial markets information.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

verbal or written questioning on underpinning knowledge and skills

setting and reviewing workplace projects and business simulations or scenarios

evaluating samples of work

accessing and validating third party reports.

Guidance information for assessment

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Types of trading limits in an organisation may include consideration of:

outright risk

spread risk

stop loss risk (including slippage)

Value at Risk (VAR).

Relevant personnel may include:

colleagues

compliance monitoring personnel

managers, supervisors.

Approving limit breaches may involve:

breaches of limits being reported immediately by the dealer to line management. The escalation process for reporting and managing limit excesses should be clear and effective.

Organisational guidelines may include:

business rules of the exchange

credit limit

deal limit

industry association codes of conduct

loss limit

organisational codes of conduct

relevant regulations and legislation.

Unit sector

Financial markets

This unit contains employability skills.