cdcs qualification specification 2013-14 - final v2

8/11/2019 CDCS Qualification Specification 2013-14 - FINAL v2

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The Institute of Financial Services is the professional body of ifs University College , a registered charity, incorporated by Royal Charter.

The International Chamber of Commerce (ICC) is the largest, most representative business organization in the world.

Qualification Specification (2013-2014)

ifs Level 4 Certificate for DocumentaryCredit Specialists (CDCS ) 601/1159/8


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The Institute of Financial Services is the professional body of ifs University College, a registered charity incorporated by Royal Charter.

2 The International Chamber of Commerce (ICC) is the largest, most representative business organization in the world.

CONTENTS

Page

1. Accreditation information 3

2. Aims of the CDCS 4

3. Learning outcomes for the CDCS

5

4. Objectives of the CDCS 6

5. Structure of the CDCS 6

6. Entry requirements 6

7. Methods of study 6

8. Assessment methodology of the CDCS 6

9. Grading 7

10. Assessment resits 7

11. Learning resources 7

12. Unit 1 Principles and Practices of Documentary Credit Transactions syllabus 8


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1. Accreditation information

Qualification title ifs Level 4 Certificate for Documentary CreditSpecialists (CDCS )

Ofqual qualification number 601 / 1159 / 8

Qualification level 4

European QualificationsFramework (EQF) level

5

Regulation start date 29 August 2013

Operational start date 01 October 2013

Offered in England, Wales, Northern Ireland and internationally

Assessment available in English Yes

Assessment available in Welsh No

Assessment available in Irish No

Sector subject area 15.1 Accounting and Finance

Purpose D. Confirm occupational competence and / or licenceto practice

Sub-purpose D1. Confirm competence in an occupational role to thestandards required

Total credits 30

Minimum credits at / above level 30

Minimum learning hours 150 1

Maximum learning hours 300

Overall grading type Fail / Pass / Merit / Distinction

Assessment methods Multiple-choice examination

Qualification description The Certificate for Documentary Credit Specialistsconsists of two mandatory units.

Age ranges 1618; 19+


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1.1 Table 1 QCF Level 4 level descriptors

DESCRIPTION

SUMMARY Achievement at Level 4 reflects the ability to identify and use relevantunderstanding, methods and skills to address problems that are welldefined but complex and non-routine. It includes taking responsibility

for overall courses of action as well as exercising autonomy and judgement within fairly broad parameters. It also reflectsunderstanding of different perspectives or approaches within an areaof study or work.

KNOWLEDGE ANDUNDERSTANDING

Use practical, theoretical or technical understanding to addressproblems that are well defined but complex and non-routine.

Analyse, interpret and evaluate relevant information and ideas.

Be aware of the nature and scope of the area of study or work.

Have an informed awareness of different approaches within the areaof study or work.

APPLICATION ANDACTION

Address problems that are complex and non-routine while normallyfairly well defined.

Identify, adapt and use appropriate methods and skills.

Initiate and use appropriate investigation to inform actions.

Review the effectiveness and appropriateness of methods, actionsand results.

AUTONOMY ANDACCOUNTABILITY

Take responsibility for courses of action, including, where relevant,responsibility for the work of others.

Exercise autonomy and judgement within broad but generally well-defined parameters.

2. Aims of the CDCS

2.1 The aims of the CDCS are to:

i. introduce students to documentary credit transactions by focusing on the types, products

and processes used in transactions;

ii. highlight the importance of rules, standards and guidelines for documentary credit

transactions and the products available to assist these transactions;

iii. enable students to gain an appreciation of the commonly used documents and trade terms;

iv. provide students with an understanding of the roles, obligations and relationships between

parties to documentary credits;

v. provide an understanding of the risks involved in documentary credit transactions and the

ability to manage those risks;

vi. familiarise students with how the rules and guidelines can be breached and the implications

of such breaches;

vii. provide students with the ability to manage documentary credit transactions and the

relationship between parties using the transactions;


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viii. provide students with an understanding of how to check the accuracy of documents to

enable their correct usage in documentary credit transactions;

ix. familiarise students with the links between theory and practice; and,

x. provide opportunities for students to develop the necessary skills and competencies to

move on to further study or employment.

3. Learning outcomes for the CDCS

3.1 Knowledge and understanding elements of the CDCS will provide students with the

ability to critically analyse the:

i. environment of documentary credits, with a focus on the trade terms, products and

processes;

ii. roles and responsibilities of parties involved in documentary credits;

iii. current technical language, tools, methods and practices of documentary credits;

iv. risks involved in documentary credits and how to mitigate them; and,

v. rules and regulations involved in documentary credit products.

3.2 Subject-specific practical / professional elements of the CDCS will provide students

with the skills to:

i. use appropriate tools and methods to check documentary credit documents;

ii. apply appropriate rules and guidelines to a variety of documentary credit transaction

scenarios;

iii. analyse documentary credit products and documents and reflect upon their desirability and

effectiveness in a variety of scenarios; and,

iv. understand the problems and risks that can arise in documentary credit transactions, and

how these problems can be controlled and / or mitigated.

3.3 Intellectual skills developed by the CDCS will provide students with the ability to:

i. locate, extract and analyse information from different sources;

ii. apply higher-level cognitive skills of reflective practice, including analysis and evaluation;

iii. utilise problem-solving and decision-making skills; and,

iv. understand the interrelationships between the various subject disciplines and assimilatethese coherently to provide effective solutions.

3.4 Transferable skills and personal qualities developed by the CDCS will provide studentswith the ability to:

i. use appropriate information from a range of sources;

ii. learn independently and enhance skills of self-reflection, criticality and self-managed study;

and,

iii. structure and communicate ideas logically and coherently.


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4. Objectives of the CDCS

4.1 On completion of the CDCS qualification, students will be able to:

i. demonstrate a level of expertise in documentary credits that is recognised worldwide;

ii. improve their knowledge and understanding of the complex issues associated with

documentary credit best practice;

iii. develop the skills to apply their knowledge in the workplace and to perform at a high level;

iv. use the professional designation CDCS ; and,

v. improve their career and promotion prospects.

4.2 As well as developing knowledge, the CDCS assists in developing the ability to:

i. analyse and evaluate information;

ii. develop core personal skills including communication, numeracy and IT;

iii. formulate appropriate responses to resolve defined problems;

iv. convey information clearly, concisely and accurately;

v. structure information, options and recommendations in a clear and logical order;

vi. develop skills in examination technique;

vii. apply and build on previous learning and experience; and,

viii. develop critical thinking and critical evaluation.

5. Structure of the CDCS

5.1 CDCS is made up of one mandatory unit which needs to be successfully completed in order

for the student to achieve the certificate:

i. Unit 1: Principles and Practices of Documentary Credit Transactions (30 credits) K / 505 /

5349

6. Entry requirements

6.1 There are no specified entry requirements. However, individuals need to be satisfied of their

ability to study in English at Level 4.

7. Methods of study

7.1 CDCS is delivered via distance learning.

7.2 Materials and additional information are available by accessing my ifs learning.

8. Assessment methodology of the CDCS

8.1 The unit is assessed in a single examination lasting three hours. The examination paper is split

into two sections.


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8.2 Section A is assessed by 60 multiple-choice questions, with one mark available for each correct

answer.

8.3 Section B is assessed by:

i. 10 multiple-choice questions, with one mark available for each correct answer.

ii. three in-basket exercises comprising five multiple-choice questions linked to a set of

documents, with one mark available for each correct answer.

iii. three simulation document-checking exercises, candidates must identify five discrepancies

from a choice of 10. Each discrepancy correctly identified is worth one mark. A total of five

marks is available for each simulation exercise.

8.4 A total of 100 marks are available.

9. Grading

9.1 The qualification will be graded fail / pass / merit / distinction:

Grade Raw mark

Fail 069

Pass 7079

Merit 8094

Distinction 95100

9.2 To achieve an overall pass, students must achieve a mark of 70% overall (and 60% for Section

B).

9.3 There is no section pass mark for section A.

9.4 Credit cannot be claimed for gaining 60% in section B but failing to gain 70% overall, only

overall achievement is graded.

10. Assessment resits

10.1 Students are allowed to resit the unit in accordance with the publishedifs

policies.

11. Learning resources

11.1 Students will be provided with the following learning resources:

i. online access via my ifs learning to learning materials and to ifs KnowledgeBank (virtual

library);

ii. unit syllabuses;

iii. specimen paper; and,

iv. student forum.


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12. Unit 1 Principles and Practices of Documentary Credit

Transactions

12.1 Unit 1 specification

Unit title Principles and Practices of Documentary Credit Transactions

Ofqual unit reference number K / 505 / 5349

Unit level 4

Learning hours 300

Unit credit value 30

Unit aims i. This unit introduces students to documentary credit

transactions by focusing on the types, products and

processes used in transactions.

ii. It highlights the importance of rules, standards andguidelines for documentary credit transactions and the

products available to assist these transactions.

iii. Students will gain an appreciation of the commonly used

documents and trade terms.

iv. Students will gain an understanding of the roles, obligations

and relationships between parties to documentary credits.

v. Students will gain an understanding of the risks involved in

documentary credit transactions and be able to manage

those risks.vi. Students will understand how the rules and guidelines can

be breached and the implications of such breaches.vii. Students will be able to manage documentary credit

transactions and the relationship between parties to the

transactions.

viii. Students will understand how to check the accuracy of

documents to enable their correct usage in documentary

credit transactions.

12.2 Unit 1 learning outcomes / assessment criteria

Learning outcome (LO)

The learner when awarded credit for this

unit will:

Assessment criteria (AC)

Assessment of the LOs will require a learner to demonstrate that

they can:

1. Understand the main types,

characteristics and uses ofdocumentary credits.

1.1 Explain what is meant by the term documentary credit.

1.2 Compare the main types of documentary credit.

1.3 Compare the main characteristics of documentary credits.

1.4 Explain how the main types of documentary credit are used.

1.5 Identify the key features of documents used in documentarycredit transactions.

2. Know the industry rules, standards,guidelines and trade terms that govern

the delivery of documentary credit

2.1 Describe the rationale for the introduction of uniform rules to

govern documentary transactions.

2.2 Identify the rules that govern documentary credit transactions.


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unit will:



they can:

transactions. 2.3 Explain the UCP and eUCP rules that relate to the presentationand examination of documents in documentary credit

transactions.

3. Understand the ways in which

documentary credit transaction rules

and regulation can be breached and

the implications of such breaches.

3.1 Explain how measures to prevent money laundering can affect

documentary credit transactions.

3.2 Explain the impact of measures to prevent terrorist financing on


3.3 Identify the ways in which ICC rules relating to documentary

credit transactions can be breached and the implications of such

breaches.

4. Understand the roles and obligations

of the parties to documentary credittransactions and the relationships

between them.

4.1 Describe the relationships between the parties involved in


4.2 Identify the roles and obligations of the parties involved indocumentary credit transactions,

4.3 Explain how the provisions of UCP affect the relationship, roles

and obligations of the parties to documentary credit transactions.

5. Understand the types and methods of

payment and credit used in


5.1 Compare the basic methods of payment and credit used in


5.2 Identify when a type of payment or credit is preferred.

5.3 Explain the concept of autonomy for documentary credits.

6. Understand the types of transport,commercial and financial documents

used in documentary credit

transactions and their requirements

under ICC rules.

6.1 Explain the key transport documents used in documentary credit

transactions.

6.2 Explain the key commercial and financial documents used in


6.3 Explain the requirements of documents used in documentarycredit transactions as governed by ICC rules.

7. Understand the processes andchallenges involved in documentary


7.1 Identify the documentary credit issuance and amendmentprocess.

7.2 Explain the requirements of merchants and countries of export

and import in the documentary credit process.

7.3 Explain the operational procedures relating to examiningdocuments, culminating in their settlement or rejection.

7.4 Explain the problems faced by banks in transactions involvingbank-to-bank reimbursements under documentary credits.

7.5 Explain the problems that arise in practice in relation to

documentary credits, documents and the rules.

7.6 Explain discrepant documents.

8. Understand and manage the risksinvolved in documentary credit

transactions.

8.1 Identify the various operational risks involved in documentary

credit transactions and the impact of these on the parties

involved.

8.2 Explain how the risks involved in documentary credit transactions

may be controlled and mitigated.


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unit will:



they can:

9. Understand the related products used

in documentary credit transactions.

9.1 Identify the related products available for documentary credittransactions.

9.2 Explain why related products are used in documentary credit

transactions.

9.3 Identify the risks and consequences of using related products in


10. Be able to manage the transport,

commercial and financial documents

used in documentary credittransactions.

10.1 Apply appropriate ICC rules and trade terms that govern


10.2 Manage the relationships between parties using documentarycredit transactions.

10.3 Process the methods of payment and credit used in documentary


10.4 Resolve any challenges involved in documentary credit

transactions.

10.5 Manage the risks involved in documentary credit transactions.10.6 Process any related products used in documentary credit

transactions.

10.7 Check accuracy of documents to enable their correct usage in


12.3 Unit 1 assessment methodology

Unit 1 will be assessed by 70 standalone multiple-choice questions; three in-basket exercises each with

five attached multiple-choice questions and three simulation exercises where five discrepancies need tobe identified from a choice of 10.

12.4 Unit 1 syllabus overview

1. Understand the main types,

characteristics and uses of

documentary credits.

Understanding of the term documentary credit

A basic documentary credit transaction (including generic flow

chart of this process)

Types of documentary credit

Primary characteristics of documentary credits

Secondary characteristics of documentary credits:

- Revolving credits

- Instalment

- Advance payments

- Transferable

- Evergreen

- Clean


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- Direct pay

Categorisation of documentary credit by type and characteristic

Commercial documentary credits

Standby letters of credit

2. Know the industry rules,

standards, guidelines and

trade terms that govern the

delivery of documentary


Incoterms 2010

UCP 600 Uniform Customs and Practice for Documentary

Credits

ISP98 International Standby Practices

URR 725 Uniform Rules for bank-to-bank reimbursement

under documentary credits

ICC decision on original documents (Appendix to ICC

publication 645 ISBP)

ISBP 745 eUCP

3. Understand the ways in

which documentary credit

transaction rules and

regulations can be breached

and the implications of such

breaches.

Money Laundering

Sanctions

Terrorist Financing

4. Understand the roles andobligations of the parties to

documentary credit

transactions and the

relationships between them.

Parties to documentary credits roles and responsibilities:- Issuing bank

- Beneficiary

- Applicant

- Non-bank issuers

- Confirming bank

- Advising bank

- Negotiating bank

- Paying bank

- Accepting bank

- Reimbursing bank

- Transferring bank

- Nominated bank

- Presenting bank

Banks roles and obligations:

- Issuing bank

- Confirming bank


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- Advising bank

- Negotiating bank

- Paying bank

- Accepting bank

- Reimbursing bank

- Transferring bank

- Nominated bank

- Presenting bank

- Beneficiary

Relationship of parties in respect of payment of conforming

documents and non-payment of non-conforming documents

Roles and responsibilities in reimbursement

5. Understand the types and

methods of payment and

credit used in documentary


Types of payment:

- Sight

- Deferred

- Negotiation

- Acceptance

Transmission of proceeds

Types of credit

With and without recourse

The autonomy of a documentary credit as a paymentmechanism

6. Understand the types of

transport, commercial and

financial documents used in

documentary credit

transactions and their

requirements under ICC

rules.

Characteristics, processing and rules that apply to transport

documents:

- Bill of Lading

- Charter Party Bill of Lading

- Non-negotiable Seaway Bill- Multimodal Transport Document

- Air Transport Document

- Road, Rail or Inland Waterway Transport Document

- Forwarders Cargo receipt, Mates Receipt and

Consolidators Receipt

- Post Receipt or Certificate of Posting

- Courier or Expedited Delivery Service Document

Financial and Commercial documents:- Draft / bill of exchange


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- Commercial Invoice

- Insurance Document

- Weight Certificate

- Certificate of Origin

- Packing Lists

- Inspection Certificate

Documents for official purposes and checking mechanisms

7. Understand the processes

and challenges involved in

documentary credit

transactions.

Processes and activities associated with:

- Sales agreement / contract of sale

- Issue

- Pre-advise

- Advise

- Confirm

- Amend

- Transfer

- Present

- Examine

- Pay / Reject

- Claim

- Reimburse Funds- Cancel

Presentation, Examination and Settlement / Rejection

Identifying and handling discrepant documents

Electronic presentations

Problems that can arise during the documentary credittransaction process

8. Understand and manage the

risks involved indocumentary credit

transactions.

Types of Risk

- Operational / UCP 600- Credit

- Foreign Exchange

- Fraud

- Legal

- Political

Other risks / considerations

- Money Laundering

- Sanctions

- Terrorist Financing


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- Credit Risk Assessment / Management

Risks to the parties to documentary credits:

- applicant

- issuing bank

- beneficiary

- advising bank

- nominated bank

- confirming bank

- reimbursing bank

How risks can be controlled

9. Understand the related

products used in

documentary credit

transactions.

Letter of Indemnity

Air Way Release

Steamship Guarantee

Assignment of Proceeds

Participation and Syndication

Refinance Credits

Reimbursement undertaking

10. Be able to manage the

transport, commercial and

financial documents used in

documentary credit

transactions.

Apply and analyse the transport, commercial and financial

documents used in documentary credit transactions in order to

recommend appropriate courses of action and manage



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About the Institute of Financial Services

The Institute of Financial Services supports and promotes professionalism in the regulated advicesector and the wider financial services industry. It does so through the provision of qualifications,continuing professional development services and through the dissemination of best practice. TheInstitute is the professional body of ifs University College , a registered charity, incorporated by RoyalCharter and is recognised as an awarding organisation by Ofqual.

Institute of Financial Servicesifs House 49 Burgate LaneCanterburyKent CT1 2XJ

T: +44 (0) 1227 818609 (option 1)E: [email protected] W: www.iofs.org.uk

About the International Chamber of Commerce

The International Chamber of Commerce is the largest representative business organisation in theworld. The ICC has hundreds of thousands of member companies across +130 countries coveringinterests spanning across every sector of private enterprise. The ICC Banking Commission is thelargest commission within the ICC and is a leading ruling body for the banking industry globally, gaininga reputation for being the most authoritative voice in the field of trade finance.

International Chamber of Commerce38 cours Albert 1er75008 Paris,France

T: +33 (0) 1 49 53 28 28E: [email protected] W: www.iccwbo.org