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Evidence Guide: FNSFMK602 - Hedge financial products

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

FNSFMK602 - Hedge financial products

What evidence can you provide to prove your understanding of each of the following citeria?

Assess hedge financial transaction

  1. Assess risk tolerance and appetite, and review current financial position to determine if hedging is required using an additional financial product
  2. Analyse hedging instrument options based on limits, organisational product approvals and current exposure assessment
Assess risk tolerance and appetite, and review current financial position to determine if hedging is required using an additional financial product

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Analyse hedging instrument options based on limits, organisational product approvals and current exposure assessment

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Complete hedge transaction

  1. Undertake hedge transaction with counterparties in accordance with organisational guidelines, credit and other desk limits
  2. Collect hedge transactional details, complete relevant documentation and enter hedge transaction into the organisation’s dealing system
  3. Report details of transaction to authorised trade repository where required by regulation
Undertake hedge transaction with counterparties in accordance with organisational guidelines, credit and other desk limits

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Collect hedge transactional details, complete relevant documentation and enter hedge transaction into the organisation’s dealing system

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Report details of transaction to authorised trade repository where required by regulation

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assess adjusted financial position

  1. Assess new post-transaction position in line with profit and loss and risk reports, and new market data available
  2. Adjust hedge position, based on analysis of new data, if risk remains outside scope of organisational tolerance or market moves
  3. Collect additional transactional details, complete relevant documentation and enter new transaction into organisation’s dealing systems
Assess new post-transaction position in line with profit and loss and risk reports, and new market data available

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Adjust hedge position, based on analysis of new data, if risk remains outside scope of organisational tolerance or market moves

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Collect additional transactional details, complete relevant documentation and enter new transaction into organisation’s dealing systems

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Assess hedge financial transaction

1.1 Assess risk tolerance and appetite, and review current financial position to determine if hedging is required using an additional financial product

1.2 Analyse hedging instrument options based on limits, organisational product approvals and current exposure assessment

2. Complete hedge transaction

2.1 Undertake hedge transaction with counterparties in accordance with organisational guidelines, credit and other desk limits

2.2 Collect hedge transactional details, complete relevant documentation and enter hedge transaction into the organisation’s dealing system

2.3 Report details of transaction to authorised trade repository where required by regulation

3. Assess adjusted financial position

3.1 Assess new post-transaction position in line with profit and loss and risk reports, and new market data available

3.2 Adjust hedge position, based on analysis of new data, if risk remains outside scope of organisational tolerance or market moves

3.3 Collect additional transactional details, complete relevant documentation and enter new transaction into organisation’s dealing systems

Required Skills and Knowledge

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Assess hedge financial transaction

1.1 Assess risk tolerance and appetite, and review current financial position to determine if hedging is required using an additional financial product

1.2 Analyse hedging instrument options based on limits, organisational product approvals and current exposure assessment

2. Complete hedge transaction

2.1 Undertake hedge transaction with counterparties in accordance with organisational guidelines, credit and other desk limits

2.2 Collect hedge transactional details, complete relevant documentation and enter hedge transaction into the organisation’s dealing system

2.3 Report details of transaction to authorised trade repository where required by regulation

3. Assess adjusted financial position

3.1 Assess new post-transaction position in line with profit and loss and risk reports, and new market data available

3.2 Adjust hedge position, based on analysis of new data, if risk remains outside scope of organisational tolerance or market moves

3.3 Collect additional transactional details, complete relevant documentation and enter new transaction into organisation’s dealing systems

Evidence of the ability to:

complete hedge financial transactions and enter into organisational systems

evaluate and adjust financial positions

interpret and comply with organisational trading rules and limits.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

To complete the unit requirements safely and effectively, the individual must:

compare and contrast financial risk analysis techniques

analyse and describe financial market reports, including profit and loss reports

describe the key features of organisational requirements relating to financial trading

identify and classify organisational transactions limits

assess the impact of the following key economic features when hedging financial products:

characteristics and impacts of economic and business cycles

monetary and fiscal policies

interest rates, exchange rates and inflation

compare and contrast the range of financial market products available.