Current Issues Readings - How to cope with them?

[Johnny Firpo]

Hi,
actually I am a bit concerned how to cope with the Current Issues readings assigned, as these papers contain more than 300 pages. Based on the exam and preparation experience so far and to the best of your knowledge:

1. Do we have to read all the papers in detail or are there any parts than can be omitted? (Given the timeframe even in the GARP Preparation Handbook I can't imagine how anyone should read all of this - and understand all of this - within one week...).

2. Arethere any summaries?

3. How many questions can we expect on Current Issues in the exam? (Considering that Operational Risk incl. the Basel Readings is 10%: the total number of questions expected for Operational and Basel would be 8).

4. Based on the experience of the exams so far: What kind of questions can we expect in the exam? Is a superficial overview enough or are these questions asking details?

5. Any further hints how to successfully cope with the Current Issue readings?
Many thanks in advance!

 

[EK]

Hi BT team, given GARP has completely reworked T9 section, and given you obviously won't have enough time to upload new study materials by May 2014, what are your recommendations?

 

[Nicole Seaman]

@EK,

The BT team is working very hard to get the materials updated for 2014. We assure you that we will be updating a great deal of the materials from 2013 and we will be publishing the materials that are new to the 2014 curriculum. I have already drafted many of the T9 study notes so they will definitely be published before the exam. Thank you for your patience.

Nicole Manley

 

[EK]

Hi Nicole, that's very good news! looking forward to new materials then!

 

[joacogimeno]

Hello,

Regarding the reading comparing the OTC derivative regulations in the US, EU and Singapore, and as a result of previous and current consulting experience, I have found several factual errors specially (but not exclusively) regarding reporting in the European Union.

In what follows I will copy some paragraphs that are to be found in the reading and will include a correction/explanation in bold letters:

1.- "Nonfinancial firms below a certain “clearing threshold” are exempt from clearing through a CCP (TRUE). Any OTC contract that is considered to be a hedge is exempt from clearing (FALSE) and as such does not even count toward the total clearing threshold (TRUE, but it is not "a result" of the previous sentence). The threshold has yet to be set by the ESMA and the European Systemic Risk Board.(The threshold(s) have already been set by ESMA)".

2.- "A nonfinancial counterparty, above the information threshold, is required to report on OTC contracts" and later "Nonfinancial entities only above a certain threshold are required to report in both the EU and Singapore." Both this sentences are wrong, when it comes to reporting, Non-financial Counterparties(NFCs) are subject to the same requirements as Financial Counterparties.

3.- "All three jurisdictions allow third-party reporting and single-sided reporting. However, only the United States allows for double reporting". FALSE, in Europe, EMIR also allows for double reporting, but "without duplication", which the Regulators later clarified that means that a counterparty shall not report twice (so to speak).
As a result, I have a question: if we were asked about any of the above, should the answer be in line with the readings, regardless of whether we know some information to be wrong?

Also, I believe that you have a professional relationship with GARP, and you submit some comments/feedback periodically. Could you please make them aware of the above?

Thank you in advance.

 

[EK]

@EK,

The BT team is working very hard to get the materials updated for 2014. We assure you that we will be updating a great deal of the materials from 2013 and we will be publishing the materials that are new to the 2014 curriculum. I have already drafted many of the T9 study notes so they will definitely be published before the exam. Thank you for your patience.

Nicole Manley

Hi Nicole, any updates on that? I understand the schedule is tight, and it may well seem the topic doesn't deserve so much attention.. Nevertheless, it would be extremely helpful to fill that gap as well - AAMOF, it was tested quite extensively in November according to the feedback I got from buddy candidates..

 

[IRENA BLAZINCIC]

Hello,

Regarding the reading comparing the OTC derivative regulations in the US, EU and Singapore, and as a result of previous and current consulting experience, I have found several factual errors specially (but not exclusively) regarding reporting in the European Union.

In what follows I will copy some paragraphs that are to be found in the reading and will include a correction/explanation in bold letters:

1.- "Nonfinancial firms below a certain “clearing threshold” are exempt from clearing through a CCP (TRUE). Any OTC contract that is considered to be a hedge is exempt from clearing (FALSE) and as such does not even count toward the total clearing threshold (TRUE, but it is not "a result" of the previous sentence). The threshold has yet to be set by the ESMA and the European Systemic Risk Board.(The threshold(s) have already been set by ESMA)".

2.- "A nonfinancial counterparty, above the information threshold, is required to report on OTC contracts" and later "Nonfinancial entities only above a certain threshold are required to report in both the EU and Singapore." Both this sentences are wrong, when it comes to reporting, Non-financial Counterparties(NFCs) are subject to the same requirements as Financial Counterparties.

3.- "All three jurisdictions allow third-party reporting and single-sided reporting. However, only the United States allows for double reporting". FALSE, in Europe, EMIR also allows for double reporting, but "without duplication", which the Regulators later clarified that means that a counterparty shall not report twice (so to speak).
As a result, I have a question: if we were asked about any of the above, should the answer be in line with the readings, regardless of whether we know some information to be wrong?

Also, I believe that you have a professional relationship with GARP, and you submit some comments/feedback periodically. Could you please make them aware of the above?

Thank you in advance.

I would be suprised if GARP is not aware of this issues. But, I could not be sure.
As far as I know about EMIR, the following entities are covered by the different provisions in EMIR:



Value of the clearing thresholds :
- EUR 1 billion* Credit derivative contracts
- EUR 1 billion* Equity derivative contracts
- EUR 3 billion* Interest rate derivative contracts
- EUR 3 billion* Foreign exchange derivative contracts
- EUR 3 billion* Commodity derivative contracts and others
* in gross notional value

 

[Nicole Seaman]

Hello @EK,

The T9 documents just need to be reviewed by David and then I will be publishing them. Thank you for your patience!

Nicole

 

[Johnny Firpo]

AAMOF, it was tested quite extensively in November according to the feedback I got from buddy candidates..

According to the GARP weighting scheme we should expect 8 questions on Current Issues (10% of 80 questions). Do you think that there have been more questions concerning this topic?

 

[EK]

10% of unexpected questions can make the difference, I wish I was 100% confident in the remaining 90% I don't want to exaggerate, but the same guy told me literally that November exam questions were absolutely different from what he'd expected Btw, he used Kaplan's notes and we're (hopefully) in a better position position as BT has always been providing the best ever preparation materials So, looking forward to T9 docs from Nicole/David!

 

[EK]

Hi Nicole,

2 fresh readings plus Caruana gives us 3 out of 7 readings assigned. What about the remaining 4?
Additionally, shall we expect any question sheets?

75. "Towards Better Reference Rate Practices: A Central Bank Perspective," Working Group Established by the BIS
Economic Consultative Committee, March 2013.*

76. “OTC Derivatives: A Comparative Analysis of Regulation in the United States, European Union, and Singapore.”
(Rajarshi Aroskar, IFM Review of Futures Markets, Volume 21, March 2013).*

77. “A New Look at the Role of Sovereign Credit Default Swaps,” IMF Global Financial Stability Report, Chapter 2,
April 2013.*

78. “Capital Planning at Large Bank Holding Companies: Supervisory Expectations and Range of Current Practice,”
Board of Governors of the Federal Reserve System, August 2013.

 

[David Harper CFA FRM]

@EK We know the status, but thanks for telling us what we already know and peppering us with constant status queries (that's sarcasm). We are trying to work on the other four, we are working on multiple fronts.

T9 Questions Sheets? Um, not before the May Exam. (They don't just magically appear. It would be easy if we just wanted to rush out crap, but we don't want to rush out crap). If you eager to distract us, please keep the status queries coming; one status update per day would be a good distraction for us, I am thinking. Thanks!

 

[David Harper CFA FRM]

Well @andi2384 I dislike your dislike. You don't have to visit the forum, if it's not enough for you (i.e., my constant daily attention and responsiveness), I am sorry. I suppose you don't mind the deep practice questions and constant support, right? just that we are missing a few readings ... or maybe that I am less than perfect in coping with a constant barrage of status updates (and expectations that new question sheets, to our quality, can be instantly summoned) nevermind, I am tired (and tired of this forum)

 

[andi2384]

Hi David, i understand that the status queries are annoying you but the way you respond to them is realy rude lately. Some of your customers are worried about the exam that's why the keep asking.

 

[EK]

@EK We know the status, but thanks for telling us what we already know and peppering us with constant status queries (that's sarcasm). We are trying to work on the other four, we are working on multiple fronts.

T9 Questions Sheets? Um, not before the May Exam. (They don't just magically appear. It would be easy if we just wanted to rush out crap, but we don't want to rush out crap). If you eager to distract us, please keep the status queries coming; one status update per day would be a good distraction for us, I am thinking. Thanks!

Hi BT Team, We all appreciate your hard work and support. I'm sorry for distracting you with that sort of questions (no sarcasm here). I'll never ever ask for updates on the forum.

 

[Roopam]

Hello David, Sorry to bring this up again, but I am appearing for part 2 in nov 2014 but my membership subscription ends in June. I assumed that at least all preparation material will be published before May exam. Now I am worried that I will not have access to these material if they are published after my subscription ends. Can you help or suggest on this? Hope you understand my genuine concern and not feel annoyed.

Thanks

RS

 

[tosuhn]

Hi @David Harper CFA FRM CIPM and team, any summary or pointers for this section?
I have briefly went through the materials but due to short of time, I am contemplating of re-reading them.
Any tips please?

Many thanks.
Regards,
Sun

 

[ShaktiRathore]

Hi
Just just concentrate on the question how the problem arised in the case,i think that is the most important question and you can get to the root of the cause. This will make the case crystal clear.
Thanks

 

[NNath]

Hi David, If you could share the slides for the Instructional video that up for this topic. I think it will help to make index cards and help cope with this topic. Thanks,

 

[Nicole Seaman]

Hello @NNath

There is not currently an instructional video for this topic, as it has not been updated for 2015 yet. If an instructional video is published, we will be sure to upload slides to go along with the video. During the second semester of the exam year, we prepare new materials based on perceived priority.

Thank you,

Nicole