Compliance and Money market: Difference between pages

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1. ''Policy and process.''
Money markets trade short-term financial instruments, generally with a life up to one year.  
Securities are generally quoted on the basis of a simple nominal annual interest rate (or yield) or a simple nominal annual discount rate.


Procedures and processes in corporations or public agencies to ensure that personnel are aware of relevant laws and regulations and take appropriate steps to comply with them.
Important short term interest conventions are:


1. For GBP yield instruments: Actual/365 days
So Simple periodic interest = Quoted nominal annual rate x [Actual days]/365


2. ''ACT Ethical Code.''
For example a 272 day sterling yield instrument quoted at 4% would pay periodic interest of:
= 4% x 272/365
= 2.9808% per 272 day period


Part of the ACT's Ethical Code.
2. For EUR, USD and most other currencies yield instruments: Actual/360 days
 
So Simple periodic interest = Quoted nominal annual rate x [Actual days]/360
This part deals with following relevant laws, regulations and conventions.
 
 
3. ''Tax''.
 
''Tax compliance'' means making tax payments and producing and submitting tax information to the tax authorities on time and in the required formats.
 
 
4. ''Loan agreements''.
 
''Covenant compliance'' means acting within the limits defined by financial covenants and other covenants in borrowings documentation.
 
 
5. ''Other actions.''
 
More broadly, to act to fulfil a wish, command, code or rule.


For example a 272 day USD yield instrument quoted at 4% pays periodic interest of:
= 4% x 272/360
= 3.0222% per 272 day period.


== See also ==
== See also ==
* [[ACT Competency Framework]]
* [[Capital market]]
* [[ACT Ethical Code]]
* [[Depo market]]
* [[Code]]
* [[International money market]]
* [[Compliance risk]]
* [[Market]]
* [[Covenant]]
* [[Money market fund]]
* [[Loan agreement]]
* [[Money market lines]]
* [[Senior Managers Regime]]
* [[Nominal annual rate]]
* [[Simple interest]]
* [[Wholesale markets]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Long_term_funding]]
[[Category:Compliance_and_audit]]
[[Category:Ethics]]
[[Category:Risk_frameworks]]

Revision as of 14:20, 23 October 2012

Money markets trade short-term financial instruments, generally with a life up to one year. Securities are generally quoted on the basis of a simple nominal annual interest rate (or yield) or a simple nominal annual discount rate.

Important short term interest conventions are:

1. For GBP yield instruments: Actual/365 days So Simple periodic interest = Quoted nominal annual rate x [Actual days]/365

For example a 272 day sterling yield instrument quoted at 4% would pay periodic interest of: = 4% x 272/365 = 2.9808% per 272 day period

2. For EUR, USD and most other currencies yield instruments: Actual/360 days So Simple periodic interest = Quoted nominal annual rate x [Actual days]/360

For example a 272 day USD yield instrument quoted at 4% pays periodic interest of: = 4% x 272/360 = 3.0222% per 272 day period.

See also


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