Unit of competency Outline
Date retreived
22/07/2026 8:11 PM AWST
22/07/2026 8:11 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.
Develop understanding of the Australian financial system and markets
Develop understanding of the Australian financial system and markets
Unit of competency
National Code
FNSFLT205A
FNSFLT205A
State Code
D4113
D4113
TGA Status
Replaced
Replaced
DTWD Status
Replaced
Replaced
State Implementation and Classification
Approved Date
18/08/2011
Field of Education
080101 - Accounting
Original Release Date
18/08/2011
Nominal Hours
40
Description
This unit describes the performance outcomes, skills and knowledge required to understand the financial systems and markets operating in Australia, including identifying the main participants in financial markets, the role of the central bank, the impact of its decisions on business and consumers, key factors that influence the Australian economy and the role of financial regulators.No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement.
Notes
Elements and Performance Criteria
1. Describe what is meant by the Australian financial markets
- 1.1. Specific financial markets in Australia are identified and discussed
- 1.2. The purpose of financial markets and when they emerged in Australia is researched and discussed
- 1.3. The participants in the financial markets and the roles of banks and financial institutions as financial intermediaries are identified and their roles analysed and discussed
2. Explain the function and role of the Reserve Bank of Australia (RBA)
- 2.1. The role of the RBA as Australia's central bank is researched and discussed and contrasted with other banking institutions
- 2.2. The importance and effect of the RBA's monetary policy on the Australian economy and everyday consumers is researched and discussed
3. Explain Australia's monetary system
- 3.1. The various functions of money are explained and society's motivations for holding money are outlined
- 3.2. The monetary cycle within the economy and on a global scale and instruments traded on the short term money market are described
- 3.3. The impact of increases and decreases in the money supply and the importance of regulating the money supply of any country is analysed and discussed
4. Explain the key factors that influence the Australian economy
- 4.1. The role and impact of Commonwealth and State government actions on the economy is explored with reference to current events and issues
- 4.2. The impact of a change in domestic interest rates on different sectors of the economy is analysed and discussed
- 4.3. The impact of changes in consumer activity on the Australian economy is analysed and discussed
5. Describe the role of regulators
- 5.1. The main regulators of the financial system are identified
- 5.2. The role of each regulator in protecting investors and consumers and promoting confidence in the financial system is explained using examples
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 markets in Australia can include:
bond market
equity or share market as traded on the Australian Securities Exchange (ASX)
derivatives markets
foreign exchange market
money market including the short term money market
options and futures markets.
The purpose of financial markets includes:
enabling participants to invest surplus funds by buying securities
enabling participants to raise required funds by issuing securities.
Participants in the financial markets may include
banks and non-banking financial institutions
investors:
corporations
individuals
local and international governments
speculators:
corporations
individuals.
The role of the RBA includes:
banker to the Commonwealth government, banks and other financial institutions
maintaining financial stability and regulating the Australian Payments System
managing government debt
regulating the payments system
setting and implementing monetary policy.
The effect of the RBA's monetary policy may include:
changes in interest rates
flow on changes to employment, prices and production levels
increases or decreases in the supply of money in the Australian economy
acting to avoid or minimise a systemic collapse of financial institutions.
The role of the RBA in regulating the Australian Payments System may include:
fulfilling its regulatory responsibilities by controlling risks and promoting efficiencies
participating in the financial system as banker to the Commonwealth government
providing facilities for final settlement of transactions.
The different functions of money may include:
as a means of exchange for acquiring goods and services
indications of relative values between goods and services
measure of liquidity.
Motivations for holding money may include:
precautionary demand for money to pay future expenses which may not be anticipated
speculative demand for money to be able to take advantage of future price changes in favour of the purchaser
transactions demand for money to pay everyday predictable expenses.
Instruments traded on the short term money market include:
bills of exchange
commercial bills
government bills
promissory notes
treasury notes.
Consumer activity may include:
applications for home loans
purchase of private health insurance
purchase of university education
purchase or building of residential accommodation
retail spending
tourism within Australia by Australians.
Main regulators in the financial system may include:
Australian Prudential Regulation Authority (APRA)
Australian Securities and Investments Commission (ASIC).
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 markets in Australia can include:
bond market
equity or share market as traded on the Australian Securities Exchange (ASX)
derivatives markets
foreign exchange market
money market including the short term money market
options and futures markets.
The purpose of financial markets includes:
enabling participants to invest surplus funds by buying securities
enabling participants to raise required funds by issuing securities.
Participants in the financial markets may include
banks and non-banking financial institutions
investors:
corporations
individuals
local and international governments
speculators:
corporations
individuals.
The role of the RBA includes:
banker to the Commonwealth government, banks and other financial institutions
maintaining financial stability and regulating the Australian Payments System
managing government debt
regulating the payments system
setting and implementing monetary policy.
The effect of the RBA's monetary policy may include:
changes in interest rates
flow on changes to employment, prices and production levels
increases or decreases in the supply of money in the Australian economy
acting to avoid or minimise a systemic collapse of financial institutions.
The role of the RBA in regulating the Australian Payments System may include:
fulfilling its regulatory responsibilities by controlling risks and promoting efficiencies
participating in the financial system as banker to the Commonwealth government
providing facilities for final settlement of transactions.
The different functions of money may include:
as a means of exchange for acquiring goods and services
indications of relative values between goods and services
measure of liquidity.
Motivations for holding money may include:
precautionary demand for money to pay future expenses which may not be anticipated
speculative demand for money to be able to take advantage of future price changes in favour of the purchaser
transactions demand for money to pay everyday predictable expenses.
Instruments traded on the short term money market include:
bills of exchange
commercial bills
government bills
promissory notes
treasury notes.
Consumer activity may include:
applications for home loans
purchase of private health insurance
purchase of university education
purchase or building of residential accommodation
retail spending
tourism within Australia by Australians.
Main regulators in the financial system may include:
Australian Prudential Regulation Authority (APRA)
Australian Securities and Investments Commission (ASIC).
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:
develop awareness of the features and roles of the participants within the Australian financial system and markets
understand the monetary system
identify Australia's financial regulators and their role.
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the the range statement
access to and the use of a range of common office equipment, technology, software and consumables
access to information about Australia's financial system and other markets, basic economics, software and other relevant resources.
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 simulations or scenarios
group discussion to determine and confirm understanding.
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:
develop awareness of the features and roles of the participants within the Australian financial system and markets
understand the monetary system
identify Australia's financial regulators and their role.
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the the range statement
access to and the use of a range of common office equipment, technology, software and consumables
access to information about Australia's financial system and other markets, basic economics, software and other relevant resources.
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 simulations or scenarios
group discussion to determine and confirm understanding.
Guidance information for assessment
Replaces
| State Code | National Code | Title | Type |
|---|---|---|---|
| C9676 | FNSFLIT205B | Develop understanding of the Australian financial system and markets | Unit of competency |
Replaced By
| State Code | National Code | Title | Type |
|---|---|---|---|
| AUR00 | FNSFLT205 | Develop knowledge of the Australian financial system and markets | Unit of competency |
| State Code | National Code | Title | Type |
|---|---|---|---|
| D701 | FNS20111 | Certificate II in Financial Services | Qualification |
| S692 | FNS20110 | Certificate II in Financial Services | Qualification |
| S691 | FNS10110 | Certificate I in Financial Services | Qualification |