SAQA All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.
SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD: 

Demonstrate an understanding of the core concepts of the bond market 
SAQA US ID UNIT STANDARD TITLE
13397  Demonstrate an understanding of the core concepts of the bond market 
ORIGINATOR
SGB Banking and Micro Finance 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
BANKSETA - Banking Sector Education and Training Authority 
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Finance, Economics and Accounting 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 4  NQF Level 04  10 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Reregistered  2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
Persons credited with this Unit Standard are able to demonstrate an understanding of the core concepts of the Bond Market.

The qualifying learner is capable of:
  • Describing the role and function of the bond market.
  • Describing and comparing the main bond instruments
  • Demonstrating an understanding of how a bond is priced
  • Explaining return and risk on bonds
  • Describing and illustrating the concept and shape of the yield curve
  • Demonstrating an understanding of the settlement process for bonds 

  • LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
    The learner must be able to work within a treasury or investment environment and to understand the commercial objectives of the operation in which they work. It is required that learners have an understanding of a business environment. 

    UNIT STANDARD RANGE 
    The typical scope of this unit standard is a treasury or investment environment. 

    Specific Outcomes and Assessment Criteria: 

    SPECIFIC OUTCOME 1 
    Describe the role and function of the bond market 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. An understanding of the role of bond market participants is demonstrated. 

    ASSESSMENT CRITERION 2 
    2. The primary and secondary markets are differentiated. 

    ASSESSMENT CRITERION 3 
    3. The main primary market participants and their codes are identified. 

    ASSESSMENT CRITERION 4 
    4. The secondary market participants and their functions are discussed. 

    ASSESSMENT CRITERION 5 
    5. Government bond auctions are explained and interpreted. 

    SPECIFIC OUTCOME 2 
    Describe and compare the main bond instruments 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The definition of and terminology used for coupon bonds are defined and explained. 

    ASSESSMENT CRITERION 2 
    2. The distinction between fixed and floating coupons is explained. 

    ASSESSMENT CRITERION 3 
    3. The definition of and terminology used for floating rate notes (FRNs) is explained. 

    ASSESSMENT CRITERION 4 
    4. Index-linked bonds are correctly described. 

    SPECIFIC OUTCOME 3 
    Demonstrate an understanding of how a bond is priced 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The meaning of the bond price is explained. 

    ASSESSMENT CRITERION 2 
    2. The pricing of specific bonds is priced. 

    ASSESSMENT CRITERION 3 
    3. The difference between cum and ex interest is distinguished. 

    ASSESSMENT CRITERION 4 
    4. The difference between the interest rate and discounting rate is distinguished. 

    ASSESSMENT CRITERION 5 
    5. The difference between bonds trading at par premium and at a discount is distinguished. 

    ASSESSMENT CRITERION 6 
    6. The clean and dirty prices of bonds are defined and differentiated. 

    SPECIFIC OUTCOME 4 
    Explain return and risk on bonds 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The concepts of risk and return are defined. 

    ASSESSMENT CRITERION 2 
    2. The concept of yield to maturity is discussed and illustrated. 

    ASSESSMENT CRITERION 3 
    3. The concept of term to maturity is discussed and illustrated. 

    ASSESSMENT CRITERION 4 
    4. The components of bond returns are listed and explained. 

    SPECIFIC OUTCOME 5 
    Describe and illustrate the concept and shape of the yield curve 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. A yield curve is defined and explained. 

    ASSESSMENT CRITERION 2 
    2. Various shapes of yield curves are recognised and interpreted. 
    ASSESSMENT CRITERION RANGE 
    Positive, Negative, Flat.
     

    ASSESSMENT CRITERION 3 
    3. Current and future, short and long term interest rates are distinguished and their impact on yield curves is described. 

    SPECIFIC OUTCOME 6 
    Demonstrate an understanding of the settlement process for bonds 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    1. The time settlement period is understood and explained. 

    ASSESSMENT CRITERION 2 
    2. A familiarity with the electronic settlement programme is demonstrated. 

    ASSESSMENT CRITERION 3 
    3. A familiarity with the relevant settlement documentation is demonstrated. 


    UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
    Accreditation for this Unit Standards shall be from the relevant education and Training Quality Assurer through formative and summative assessment by a registered Assessor. Assessment should be contextual and be conducted in the workplace as far as possible.

    The relevant NSB and SGB should be notified of any feedback related to this qualification.
  • Assessors must be registered as an Assessor with the relevant ETQA
  • Moderators must be registered as assessors with the relevant ETQA
  • Training providers must be accredited by the relevant ETQA
  • Moderation should include both internal and external moderation where applicable
  • The relevant ETQA will co-ordinate all moderation activities in accordance with their policies and procedures. 

  • UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
    Learners can:

    1. Apply understanding of the different bond instruments.
    2. Apply understanding of the concept and shape of the yield curve.
    3. Demonstrate familiarity with the settlement process for bonds. 

    UNIT STANDARD DEVELOPMENTAL OUTCOME 
    N/A 

    UNIT STANDARD LINKAGES 
    N/A 


    Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO IDENTIFYING 
    The learner is able to identify and solve problems relating to the completeness, correctness and accuracy of the information received. 

    UNIT STANDARD CCFO COLLECTING 
    The learner is able to collect, analyse, organise and critically evaluate information. 

    UNIT STANDARD CCFO COMMUNICATING 
    The learner is able to communicate effectively using basic mathematical and/or language skills in the modes of oral and/or written persuasion when communicating with relevant parties regarding the application. 

    UNIT STANDARD CCFO SCIENCE 
    The learner is able to use science and technology effectively and critically in applying the use of the company system to process applications. 

    UNIT STANDARD ASSESSOR CRITERIA 
    N/A 

    REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    Terminology:

    The learner should be able to define and contextualise the following terms:

    Bond instrument, coupon bonds, cum and ex interest, fixed and floating coupons, floating rate notes, index-linked bonds, interest rates, par premium, settlement process, term to maturity, time value of money, yield curve, yield to maturity.

    Values:

    The use of tasks and materials in the learning event plan should not discriminate against learners on any grounds prescribed in the Bill of Rights and should promote the orientations outlined in the critical cross-field outcomes. 

    QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Elective  20185   Further Education and Training Certificate: Banking  Level 4  NQF Level 04  Reregistered  2023-06-30  BANKSETA 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. Absa Learning & Development 
    2. Bidvest Bank 
    3. Chartall Business College 
    4. Cornerstone Performance Solutions (Pty) Ltd 
    5. Felix Risk Training Consultants 
    6. Firstrand Bank - Benmore 
    7. Nedbank Ltd 
    8. The Facilitation Workshop 



    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.