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TMA Treasury Markets Certificate study materials
TMA Treasury Markets Certificate study resources

TMA Treasury Markets Certificate: Market Data and FX Global Code

TMA Treasury Markets Certificate · Work through your exam, one topic at a time.

All guide sections

Market Data and FX Global Code

Market Data and FX Global Code tests the integrity of prices, benchmarks and reference data used by treasury, plus the conduct expectations of the FX Global Code. Questions often ask whether a rate source, last-look practice or pre-hedge is acceptable, and what evidence should exist.

Core rules and concepts

  • Market data should be accurate, timely, independent and verifiable. Use multiple sources for valuation and benchmark fallbacks; document the hierarchy and timestamp.
  • Benchmark reform: IOSCO principles require benchmarks to be robust, transparent and subject to control; IBOR transition replaced many IBORs with risk-free rates, but HIBOR remains a key HKD reference.
  • FX Global Code: market participants should act ethically, govern effectively, execute transparently, share information clearly and maintain robust confirmation and settlement. Key execution topics include last look, pre-hedging, algorithmic trading and disclosure of capacity.
  • Last look must be disclosed and not used to exploit client information; it should be a risk control, not a free option.
  • Pre-hedging must be governed by policy, proportionate to the order, and not disclose or misuse client information.
  • Records: retain quotes, timestamps, trade details and communications to support valuations and conduct reviews.

Worked example

A treasury team values a USD/HKD forward book at month-end using one dealer's indicative quote. The quote is stale and materially different from two independent sources. The correct approach is to use the documented valuation hierarchy: primary source, fallback sources, and a documented escalation if sources diverge beyond tolerance. The team should not cherry-pick the quote that improves P&L. The reasoning is that valuation data is market data subject to integrity controls, and the audit trail must show why the chosen rate was used.

Traps

Treating an indicative quote as executable; using last look to reject only losing trades; pre-hedging without policy; ignoring timestamp or time-zone mismatches; assuming the FX Global Code is legally binding in every jurisdiction (it is a voluntary code, though incorporated into some regulatory expectations); confusing HIBOR with a risk-free rate.