FIA Financial Technology & Systems 2

Question 1

Which messaging standard is most commonly used for interbank financial message exchange in the SWIFT network?

Accepted Answer

MT (Message Type) format

Answer

SWIFT's legacy MT (Message Type) format has been the dominant standard for interbank messaging, though migration to ISO 20022 is underway.

Question 2

In securities trading, what does the term 'straight-through processing' (STP) refer to?

Accepted Answer

Automated processing of trades without manual intervention

Answer

STP refers to the end-to-end automation of trade processing from order capture through settlement without manual intervention.

Question 3

Which technology underlies most modern electronic order books in equity markets?

Accepted Answer

Matching engine with price-time priority

Answer

Electronic order books use matching engines that apply price-time priority rules to pair buy and sell orders in microseconds.

Question 4

What is the primary purpose of a Central Securities Depository (CSD) in financial markets?

Accepted Answer

To hold and administer securities in immobilized or dematerialized form

Answer

A CSD holds securities in electronic form, enabling book-entry transfers and reducing the need to move physical certificates.

Question 5

In the context of financial data, what does 'latency' most critically measure for high-frequency trading firms?

Accepted Answer

The time delay between a market event and its processing

Answer

Latency is the time delay between a market event occurring and a firm's system receiving and acting on that information, measured in microseconds.

(FIA) Financial Information Associate Certification Practice Test