Ten questions on ACI education after the crisis and more

INTERVIEW PHIL PARKER

Philip Parker has considerable experience as a dealer in the international financial markets. After his banking career of more then 25 years he started his own training company. Training financial markets professionals all over the world for ACI - The Financial Markets Association qualifications. The ACI training has become his core business. Now his book The ACI Dealing Certificate and how to pass it is the standard in financial market training for dealing room professionals. Ten questions to a real professional and an enthusiastic educator.

1. Why should a financial professional take an ACI exam? Is an ACI dealing certificate also interesting for an academician with a master in finance?

There has always been an excellent camaraderie within the financial markets community and ACI moved from being just a social net-working club into the more serious business of Continuing Professional Education in the late 1980s as many other professional bodies were moving the same way. After initially being for ACI members only, the qualifications were then opened to all-comers and of course, whatever his/her background, the ACI qualifications give the candidate a ‘practical’ rather than merely an academic approach to the financial markets issues covered in the syllabuses.

2. The ACI qualifications are developed especially for bankers. Could you give some reasons for treasury professionals of non-financial corporates to enroll in a course? Who are your best students, bankers or corporate treasurers?

Almost a repeat of the answer to the first question… I would suggest the qualifications are targeted at anyone wishing to broaden their understanding of the financial markets from a practical rather than academic point of view. Both bankers and corporate treasurers are excellent students (how can I say anything else as both are frequent clients of mine!)

3. Sometimes students feel the way of examining is focused too much on facts and old fashioned calculations. They prefer a more conceptual approach. What is your personal opinion about the exam? Are changes necessary in short or long term?

University degrees offer the higher level conceptual approach. The ACI qualifications are built on understanding of the basic industry mathematics and dealing practices. The choice is there for each students’ preference. The ACI qualifications are constantly going through change, as they must to remain pertinent to current markets, the target participants and their employers.

4. ACI publishes only a syllabus with short indications of relevant topics. An elaborated official study guide or a complete body of knowledge is not available. In fact your book fulfills the gap. How do get your book up to date and how are you sure that all exam topics are covered fully?

We trainers have always had a lot to say about ACI and the various syllabuses’ strengths and weaknesses. How long have we got for this interview? Let’s concentrate on the book. When I was working on it, I thought about widening the appeal perhaps with a more broad-based title, but the book does what it says in the title and religiously follows the current 3I0-008 syllabus. As you say, it strives to fill the gap between the syllabus bullet points and the multiple choice examinations. Keeping up to date is vital. I hope that on-going communication with ACI and the Board of Education, feed-back from course participants / examination candidates and regularly sitting the exam myself means I will not let future examination candidates down.

5. Your database of multiple choice questions is famous. However, ACI does not publish exam questions with exception of a very small number of examples. How are you able to maintain your database actual and complete without having insight into real exam questions?

The book itself doesn’t contain any multiple choice questions. The reason being that there is a second version of the book accompanied by a cut-down version of our popular WinFOREX product, WinFOREX ‘Lite’. The comment about the paucity of sample questions is one frequently heard from ACI candidates. This is where ACI differ from some of the other industry examining bodies and is something we trainers have raised with the Board of Education many times over the years. The WinFOREX product looks to fill this gap with databases containing 1,750 ACI and “ACI-style” questions in the full product. I’m pretty sure the WinFOREX Module DC database is considerably larger than the official database and we strive to ensure that all possible multiple-choice question angles are covered. To be fair to ACI, when creating new questions for recently released examinations, the Board of Education has invited trainers to review the proposed databases but they themselves still don’t publish more than a very small sample for candidates’ information.

6. Does the credit crunch increase the importance of having the Dealing Certificate? Did the numbers of students substantially changed since the begin of the crisis. What is your opinion about financial markets training after the market crises.

This is a very timely question as last year’s statistics were recently released by ACI. There is much emphasis on the importance of liquidity throughout ACI and the examination syllabuses and vital learning points on such issues can be found in all ACI syllabuses. The 2009 examination statistics have just been released to trainers. Numbers-wise, training budgets are typically the first to be cut and in the round of cuts during and immediately following the crisis, a dip in examination candidates in the more mature markets is noticeable. However, overall figures are pretty much the same as the previous year. What is interesting to note is the continuing growth in the candidate-base in emerging markets, where often the regulators look to local market participants to prove their ability to compete in the international markets by achieving the benchmark ACI qualifications. It is the lack of training and understanding which can lead to so many problems in an industry and it is important that bank HR and Senior institutional management turn back to training organization quickly after the market crises of recent months. As my Chief Executive said many years ago “Training is an investment not a cost”.

7. What is your opinion of the ACI model code? It looks as a mix between standard practice and a code of conduct. In the meantime politicians all over the world have a lot of critism on the behavior of board members, traders and risk managers of banks. Do you think the code has to reckon with these feelings and has to be improved in order to reduce further the riskful behavior of smart financials?

It is a Code of Best practice written by the industry for the industry. In the vast unregulated OTC markets the Code provides the “level playing field”. I always recommend to candidates that, where these are available, they should also always familarise themselves with any local regulators’ “rule books” which look at issues from the regulators’ point of view. Without such a Code of Best practice dealers in different centres would not be able to deal with each other. I think perhaps your question is better phrased “Should the currently unregulated financial markets be subject to oversight from regulators?” Traditionally the markets have shied away from any such discussion but after the experience of recent months I believe it is inevitable that there will be more restrictions imposed on markets and market participants by governments and regulators worldwide. This should not be looked on as a threat by ACI, but rather an opportunity to expand the scope of the Model Code (particularly in respect of risk management processes) and greater global acceptance of their benchmark qualifications.

8. What is your idea about the recent ideas of Mr Obama for introducing again the distinction between traditional retail banks and invest banks.

Talk to most financial market practitioners and they will say it is not the markets specifically covered by the ACI syllabuses which have caused the recent market problems. The cash markets (Foreign exchange and Money markets) are the backbone of international trade and finance and deserve to be understood by governments, bankers and clients alike. Regardless of whether these markets are positioned within the retail or the wholesale banking environments, until we have a single global currency, these markets will not just exist but will continue to grow in importance.

9. You personally have a lot of experience in professional dealing and in training. Are you glad to have left the dealing room environment well before the actual crisis? Suppose, you may reset your career now. What would you prefer a career in banking, in training or something complete different

I joined the banking industry believing it was all about retail and the pinnacle of achievement was to be a “Bank manager”. I was posted to the bank’s Overseas Division which included the foreign exchange section where I started work. Within a couple of years the financial markets exploded into activity and I just happened to be in the right place at the right time to participate. The markets have continued to explode in activity and innovation in many different fields ever since. The recent credit crunch is just one of those occasional “blips” which seem to portend the end of the world but from which we always seem to recover – with interest. It’s the same for anyone starting out these days, you are sometimes fortunate to be in the place where it is all “happening” but wherever you are, at the end of the day, it is down to your own efforts if you are to succeed. Those in the financial markets industry now should not ignore opportunities to better themselves and those opportunities include studying (and obtaining) the industry examinations from ACI.

10. What is the best hotspot in the City of London to have drinks after having passed the dealing certificate?

Oh, I don’t know about current “hotspots”. Sadly, many of the places I frequented when working in the City have been “re-developed”. I still prefer the olde worldy traditional pub or wine bar such as the Old Dr Butler’s Head, the Jamaica Wine House (Jampot) or one of the El Vino’s establishments.

WWW.TREASURYANDFINANCE.INFO

SOURCE: Original interview Treasury and Finance Info, London, 1 February 2010, WWW.TREASURYANDFINANCE.INFO


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