Unit of competency Outline
Date retreived
22/07/2026 2:06 PM AWST
22/07/2026 2:06 PM AWST
Whilst all efforts are made to provide accurate and timely information from the relevant source/documentation, please be aware that the information supplied may not be the most current version. The accuracy of the detail has not been confirmed by the Department and therefore should not be relied upon without first confirming the contents.
Hedge financial products
Hedge financial products
Unit of competency
National Code
FNSFMK602A
FNSFMK602A
State Code
D4135
D4135
TGA Status
Replaced
Replaced
DTWD Status
Replaced
Replaced
State Implementation and Classification
Approved Date
31/07/2014
Field of Education
080101 - Accounting
Original Release Date
31/07/2014
Nominal Hours
70
Description
This unit describes the performance outcomes, skills and knowledge required to hedge financial transactions, enter hedge transactions into organisational systems and revalue and adjust financial positions when trading financial products within financial markets.This unit may apply to job roles subject to licensing, legislative, regulatory or certification requirements so Commonwealth, State or Territory requirements should be confirmed with the relevant body.
Notes
Elements and Performance Criteria
1. Hedge financial transaction
- 1.1. Financial data is reviewed to determine if financial product requires hedging before entering into transaction
- 1.2. Own risk profile and tolerance is determined prior to hedging and hedging instrument choices are selected that will be entered into to assist the transaction
2. Enter hedge transaction into organisational system
- 2.1. Counterparty approval is gained and confirmed before entering into hedge transaction and new hedge deal is transacted with counterparties in accordance with organisational guidelines, credit and other desk limits
- 2.2. Hedge transactional details are collected and relevant documentation is completed and hedge transaction is entered into the organisation dealing system
3. Evaluate financial position
- 3.1. Profit and loss reports are compared between back office and independent valuations to determine value of transactions
- 3.2. Organisational processes for accepting and signing independent back office valuations are completed
4. Adjust financial position
- 4.1. Current hedge position is analysed in line with profit and loss reports and new market data available, using standard market data
- 4.2. Counterparty approval is gained and confirmed before entering into hedge transaction and new hedge deal is transacted with counterparties in accordance with organisational guidelines, credit limits and other desk limits
- 4.3. Hedge transactional details are collected and relevant documentation is completed and the hedge transaction entered into the organisation dealing systems
RANGE STATEMENT
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Financial products may include:
capital markets
cash
commodities:
hard
soft
derivatives:
forward rate agreements
swaps
options
futures
electricity contracts
foreign exchange
government bonds
managed funds
negotiable and transferable instruments
reciprocal purchase agreements
securities:
debt
equity.
Hedge instrument and choices may include:
forward contracts
futures
options
swaps.
Counterparties may include:
banks
exchanges:
Australian Securities Exchange (ASX)
Sydney Futures Exchange (SFE)
over the counter (OTC) price markets.
Transaction details may include:
considerations
counterparty
face value
maturity date
price
start date
trade date.
Organisational documentation may include:
dealing slips.
Analysing current hedge current position may include:
consideration of alternative products
how much money is in:
debt
profit
where the market is going:
economic
technical analysis.
Organisational guidelines and credit limits may include:
business rules of the exchange
credit limit
deal limit
industry association codes of conduct
loss limit
organisational codes of conduct
relevant regulations and legislation.
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Financial products may include:
capital markets
cash
commodities:
hard
soft
derivatives:
forward rate agreements
swaps
options
futures
electricity contracts
foreign exchange
government bonds
managed funds
negotiable and transferable instruments
reciprocal purchase agreements
securities:
debt
equity.
Hedge instrument and choices may include:
forward contracts
futures
options
swaps.
Counterparties may include:
banks
exchanges:
Australian Securities Exchange (ASX)
Sydney Futures Exchange (SFE)
over the counter (OTC) price markets.
Transaction details may include:
considerations
counterparty
face value
maturity date
price
start date
trade date.
Organisational documentation may include:
dealing slips.
Analysing current hedge current position may include:
consideration of alternative products
how much money is in:
debt
profit
where the market is going:
economic
technical analysis.
Organisational guidelines and credit limits may include:
business rules of the exchange
credit limit
deal limit
industry association codes of conduct
loss limit
organisational codes of conduct
relevant regulations and legislation.
EVIDENCE GUIDE
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.
Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
hedge financial transactions and enter hedge transactions into organisational systems
evaluate and adjust financial positions
interpret and comply with organisational trading rules and limits.
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables
access to financial services product information
access to dealing systems and data.
Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
verbal or written questioning on underpinning knowledge and skills
setting and reviewing workplace projects and business simulations or scenarios
accessing and validating third party reports.
Guidance information for assessment
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.
Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
hedge financial transactions and enter hedge transactions into organisational systems
evaluate and adjust financial positions
interpret and comply with organisational trading rules and limits.
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables
access to financial services product information
access to dealing systems and data.
Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
verbal or written questioning on underpinning knowledge and skills
setting and reviewing workplace projects and business simulations or scenarios
accessing and validating third party reports.
Guidance information for assessment
Replaced By
| State Code | National Code | Title | Type |
|---|---|---|---|
| AUR17 | FNSFMK602 | Hedge financial products | Unit of competency |
| State Code | National Code | Title | Type |
|---|---|---|---|
| D727 | FNS60711 | Advanced Diploma of Financial Licensing Management | Qualification |
| D722 | FNS51011 | Diploma of Financial Markets | Qualification |
| D724 | FNS51611 | Diploma of Securitisation | Qualification |