Scope and level of the Certificate

Individuals who can demonstrate that they understand the terminology and mathematical principles of derivatives and the markets in which they are traded, and that they are able to value derivatives and manage the risks associated with a portfolio of derivatives, will be granted the Certificate in Derivatives.

Specifically, candidates will be expected to demonstrate that they:

• Understand the basic characteristics of derivative markets.
• Can define and describe a range of derivatives, including options, interest rate derivatives and exotics.
• Understand the principles of pricing options, futures & forwards.
• Understand the mathematics underpinning the pricing and hedging of derivative instruments.
• Understand how to hedge individual derivatives and portfolios of derivatives.
• Understand models of the term structure of interest rates.
• Have an awareness of the characteristics of different types of structured derivatives and synthetic securities that can be encountered in actuarial work.
• Can identify the credit & market risks that arise in the use of derivatives.

Eligibility

Current Fellows and Affiliates of the Faculty or Institute of Actuaries are eligible for registration. Members of other actuarial associations who hold equivalent qualifications are also eligible to register for the course, but will have to apply for Affiliate membership first. The examination fee is payable when you apply to sit the exam.

Course material

The course material for the Certificate in Derivatives (ST6) is supplied by ActEd.

Examinations

The examination consists of one 3-hour paper. Please download and complete an exam entry form to register for the ST6 exam. To register for the April exam the form will be available from January and to register for the September exam it will be available from July.