NEWSLETTER

CFA Society Czech Republic

No. 5

December 2014

Content Local Content, Global Content, And Much More…

Introduction (page 2) Investment Conference

 BlackRock Adopts CFA Institute Asset Manager  Welcome to the Christmas edition of our Society Code of Professional Conduct newsletter!

Your CFA Society Update (page 12-18) Interview (page 3-5)  Jan Bureš about Global Macroeconomic  CFA Society Introduces GIPS Standards in the Developments Czech Republic  5th Annual ACCA CFA & Business Mixer

Independent Voice (page 6-9)  Video from 1. Česká investiční konference

 Excuse-me, do you speak financial?  CFA Charter Awarding Ceremony 2014 (Katarína Ščecinová, CFA)  CFA JobLine – Senior Job Positions  Structural Reform of European Banking  Research Challenge 2014 – 2015 – Update (Jan Kincl)  Looking Back on Previous Four Editions of Our

Newsletter (No.1 – No. 4) CFA Institute – Global Impact (page 10-11)  Invitation to CFA Society FORECASTING DINNER  CFA Institute Supports the Ethics in Finance- 2015 on 19 February 2015 Robin Cosgrove Prize  EVENT SEASON 2014 – 2015  Looking Back at Seventh Annual European

NEWSLETTER | No. 5 | December 2014 | Publication date: 15 December 2014 Introduction Welcome to the Christmas edition of our Society newsletter!

Dear Society Members, CFA Candidates, Partners and JobLine, events, newsletter and other services our Friends, society provides. We were very pleased with the results. Here are some of the key outcomes. Welcome to the Christmas edition of our Society newsletter! The top article and interview picks from our newsletter - on page 16 you can find a selection of articles which we We would like to take the opportunity that the end of the believe are the most worthwhile reads. Take the opportunity year is approaching and look back at the main milestones of the Festive Holidays and browse back at the content of of the Society in 2014. For those of you who plan to use the each of our newsletter we have carefully selected and put Christmas holidays to catch up on reading about current together for you. developments and commentaries on the financial markets

we have selected the best articles issued in our newsletter  Finally, we would like to point out some of the main to date. upcoming events that you shouldn’t miss:

On top of that, Michal Stupavský, CFA, our Newsletter  13th Annual CFA Society Forecasting Dinner 2015 – Manager, is bringing you lots of fresh new content, namely The event will take place on the 19 February 2015 at the articles and interviews prepared with our members and CNB. We have confirmed two keynotes speakers: other financial professionals as well as articles by the CFA Miroslav Singer, CNB governor, and Jerome Booth, the Institute on global issues. Founder of New Sparta Limited and leading expert on emerging markets and asset allocation. Mark the 19 Here are some of the milestones that hallmarked 2014 February in your diaries! for the CFA Society:  CFA Candidate Mixer 2015 – Preliminarily planned for  18 new CFA charterholders – We would like to the 22 January will feature some of our CFA congratulate and welcome 18 new CFA charterholders charterholders who will share their tips on how to best from the Czech Republic and Slovakia who earned the prepare for the CFA exam. The aim of the event is to CFA designation in 2014. We officially recognized them also facilitate the creation of study groups among CFA at the Charter Awarding Ceremony on 27 November candidates. where they received their diplomas. On the same day,  CFA Institute Research Challenge 2014/2015: Final their names were also published in a congratulatory Round in the CR – will take place on the 28 January at advertisement in Ekonom, the business weekly. VSE. Come and listen to investment recommendations

 First events in Slovakia – Based on a survey about Pegas Nonwovens presented by student teams. These teams will be shortlisted from the record high conducted among our Slovak members we decided to launch our activities in Slovakia and held our first events number of 15 teams from 11 universities, including two from Slovakia! in Bratislava in March and October this year. We also partnered with SASS and held our first Christmas Party  Management series of workshops for ACCA & CFA in Slovakia on 11 December! Society – After the successful first series of Risk  Future of Finance – We joined forces with the CFA Academy workshops Deloitte CR launched thesecond Institute and launched a long term campaign Future of series for ACCA and CFA Society members on “How to Finance. As a part of the first topic: ‘Putting Investors increase a Company’s value?“. The next workshop First’ we hosted a discussion panel in Studio Burza in focusing on financing options will take place on the 18 May, where Jiri Rusnok from the CNB, Petr Koblic from March 2015. the PSE and other experts from AKAT, ING IM and IS You can find information on these events and much more in CS evaluated investor protection in the Czech Republic Your Society Update at the end of the newsletter. To see (see the video and the report on CT24). our full event portfolio visit our event calendar on the

 GIPS – Together with AKAT, the CFA Society officially society’s home page. introduced the Global Investment Performance Standards in the Czech Republic on 30 September. The We hope that you will enjoy reading the Christmas edition of initiative has the official support of the CNB. We plan to our newsletter! hold workshops on GIPS in 2015. Wishing you a Merry Christmas and a Happy New Year  Research Challenge – The Challenge has grown 2014! unprecedentedly with 15 teams from 11 universities th taking part in this year’s 5 annual local round. This Petra Roberts, CFA Marek Jindra, CFA year, for the first time, two Slovakian universities are participating. Executive Director President

 Member Satisfaction Survey – We have also [email protected] [email protected]

conducted an extensive survey to find out preferences

and feedback from our members about the CFA On behalf of the Board of Directors

We would like to extend our

greatest thanks to our sponsors

for their support in 2014

- 2 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Interview Jan Bureš about Global Macroeconomic Developments

Jan Bureš has worked for ČSOB as a Macroeconomic Jan: Reasons are similar to those above. First, growth

Analyst since 2005 and has also been the Chief forecasts in the EMU are decreasing. Secondly, several Economist of Poštovní spořitelna ČSOB since 2008. emerging countries are having problems. Russia is Jan develops macroeconomic forecasts for the Central impacted by sanctions, and other emerging countries have

European economies with primary focus on FX and to cope with a significantly lower crude oil price.

fixed income markets, communicates with and advises Additionally, the question of the first interest rates increase both domestic and foreign clients as well as asset in the US can be sensitive for several emerging countries in managers and dealers, presenting his forecasts and 2015 as some of them, such as Turkey or South Africa,

consulting financial markets developments. have large current account deficits which were enabled in

Furthermore he extensively communicates with mass- the last years by the weak US dollar. Moreover they have media. Michal Stupavský, CFA, Newsletter Manager, small FX reserves and with the dollar strengthening, this carried out the interview with Jan in the second half of could endanger them immensely. November.

---

Michal: It has now been six years since the collapse of Lehman Brothers and the outbreak of the global financial and economic crisis in the autumn of 2008. In its World Economic Outlook from October, the IMF points out that “the pace of the global recovery has disappointed in recent years”. Why has the economic recovery not been faster and how has the global economy changed since 2008?

Jan: The main brake of the global economy has been the sluggish economic recovery in the European Monetary Union (EMU). Also emerging markets, mainly the biggest ones such as Russia and China, have been lagging behind expectations during the last two years. On the other hand, the US economy has surprised positively. US households and financial sector have cleared their financial balances quite rapidly. Thus the US economy is now ready for a relatively healthy growth in domestic demand. On top of that there has also been a positive contribution of the Jan Bureš supply shock from the accelerated development of the shale gas industry, which is having a positive impact on the potential product of the US economy. Michal: In the US, after a surprisingly dismal first quarter, activity picked up in the second quarter, and As regards to the developments of the global economy evidence suggests that the weakness was mostly since 2008, a key change is the fact that the weight of temporary. In the euro area, growth came to a halt in emerging countries has further increased and continues the second quarter, mainly on the account of weak increasing now. Simultaneously, Western European investments and exports, and uncertainty about the economies are becoming the world number one exporter, persistence of the growth slowdown remains. Thus primarily Germany, with increasing trade balance based on recent macroeconomic indicators, the US surpluses. Other countries from Western Europe have also economy is in a much better shape than its European been improving their trade balances as they are pushed to counterpart and the uneven global recovery continues. the same economic model as Germany. Among these are How would you explain these divergent trends in the Spain and other countries on the EMU periphery. These US and Europe? countries add to the fact that the trade balance of the whole Jan: There are several reasons for this. First, there was EMU with the external world is further improving. It is an tighter fiscal policy in the EMU compared to the US. The important phenomenon. On the one hand it points out the US began, especially at the beginning of the crisis, a high competitiveness of German companies that are relatively big fiscal expansion. On the other hand, at the growing strongly in Asia. On the other hand it also points beginning of the debt crisis, many EMU countries carried out some of the EMU’s internal problems which are related out quite big fiscal restrictions. Overall, fiscal policy in the to weak domestic demand. It is not normal that whilst US has been much looser. having record low unemployment in Germany, domestic demand does not grow faster than 1%. Second, households’ financial balances in the US were cleaned much faster than in the EMU. Furthermore, in Michal: The IMF has also said that currently “world growth is mediocre” and “downside risks have regards to the banking sector, in 2009 US banks were quickly forced to state bailout or they were left to go increased since the spring”. What major reasons do see behind that? bankrupt. In the EMU problems with financial balances of households and banks are still continuing.

Interview continues on the next page…

- 3 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz

Interview Jan Bureš about Global Macroeconomic Developments

Third, the job market in the EMU does not work as well as it Jan: The reason for the decline was a combination of does in the US. The job market in the US is much more weaker crude oil demand in emerging countries and flexible. At the beginning of the crisis, US unemployment production increases in the US. Supply is expected to be grew faster however the turnaround was faster as well. On quite high in the upcoming years. Moreover, the first interest the contrary, employment in Europe was still falling and this rates’ increase in the US could cool down emerging trend did not stop until this year. Additionally, there are big economies even more which could further weaken demand. differences in employment among European countries. On However, an additional decline in the crude prices the other hand, differences among US states are within 2 to significantly below 80 USD would likely lead to reduction in 3% because Americans are used to relocating in order to find supply. In my view the price could now stabilize between 80 a job. to 90 USD.

And fourth, US monetary policy reacted faster and more Michal: In connection to the current Ukrainian crisis, aggressively on the crisis. ECB reacted later and not as what is your general opinion about the anti-Russia aggressively. sanctions? And what impact do they have and will have on the Czech economy? Michal: China is sustaining high growth but many risks are emerging. What is your view on China’s economic Jan: In regards to the impact of sanctions on Russia, it is development in the last few years? now quite evident, pertaining financial sanctions in particular. Russian companies have a limited possibility to Jan: Currently China is a risky and imbalanced economy refinance their USD loans which manifests itself through which does not have significant external imbalances, pressure on Russia’s FX reserves and pressure on ruble. however there has been a huge real estate bubble growing Additionally, the Russian economy already had problems and internal indebtedness has massively increased. There with the outflow of foreign investments in 2013 before the has generally been huge credit growth during the last 4 to 5 outbreak of the Ukrainian crisis and now this problem is years. Currently the domestic, private, non-financial debt to being exacerbated further. Last but not least there is a big GDP ratio is around 250%. Moreover, a lot of investments negative impact from the recent slump in crude oil prices. went into the real estate sector and many of these Overall, there are general worries about the viability of the investments may not be profitable in the future. Overall Russian current economic model, where the state budget investments played a big role in China’s growth during the depends from 60 to 70% on crude oil revenues. Therefore last several years as export growth had much smaller impact the current significantly lower crude oil price is a on GDP growth than before the global crisis. Investments de considerable strain for Russian economy. The longer the facto financed by the state via state owned enterprises sanctions will be in place the worse it will be for Russian account for half of GDP at the moment which in international economy and the more painful will be the inability of comparison is a very big weight. And that is a problem in the Russian companies to touch international financial markets. long-term perspective because investments financed by debt are not as stable as a component of GDP as is e.g. domestic Moving to the impact on the Czech economy, it has not demand. I worry that in the upcoming years China’s growth been significant yet as only a several selected companies will be much lower. This year, China will be hoping for 7% have felt the impact. Currently, Czech exports to Russia growth and in the coming years it will be even lower. make only 4% of total Czech exports. Based on our sensitivity analysis a slowdown of Russian economy would Michal: What do you think about the first interest rates’ lower Czech growth by only 0.1%. What is much more increase in the US, which is generally expected during important for us is whether the EMU accelerates its growth next year? in 2015. Unfortunately it does not seem likely at the moment. Jan: It will neither be a problem for the US nor for the EMU. However it may be a problem for emerging countries which Michal: It has been one year since the ČNB started to were financed by the cheap dollar in the past. Countries such intervene against the Czech crown. What impact did it as South Africa, Brazil or Turkey received a lot of short-term have on the Czech economy and the average Czech dollar loans to balance current account deficits. household? Has it been successful in terms of higher GDP growth and the creation of new jobs? Michal: What reasons do you see behind the huge

decline in crude oil prices recently? Do you think that Jan: In the first phase, the effects were quite successful Brent has already found its floor around 80 USD per which was in line with prior expectations. There has been a barrel?

Interview continues on the next page…

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- 4 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Interview Jan Bureš about Global Macroeconomic Developments

one-off pass through effect into consumer prices, and there Jan: First, the timing of the first interest rates’ increase in the has also been slightly higher consumption and investment US and its pace are a big unknown. In my opinion, this can expenditures immediately after the interventions. happen sooner than is currently expected by the market, as

early as the second quarter 2015 and not in the third quarter

Nevertheless, there is no clear evidence that the or at the end of 2015. interventions had any significant material impact on the real growth of the economy in 2014. I believe that the positive Second, the way in which the ECB will react on worsening signaling effect of interventions was relatively weak in economic outlook and low inflation will be an important comparison to the positive signaling effect of looser fiscal factor. Currently, there is some debate in the ECB about policy and the Eurozone recovery. Looking forward, I am quantitative easing (QE) in the US or Japanese style. rather skeptical about the longer-term spillover effects to the However, my opinion at the moment is that the ECB will be broader economy. In my view, the performance of the not buying any government bonds. Eurozone and the stance of fiscal policy remain crucial looking ahead into the 2015-16 year horizon. Third, another factor and big unknown is the Ukrainian crisis. It is especially important for Russia as it is tightly connected Michal: Coming now to financial markets, the 10-year to the Ukrainian economy. However, from a global Czech government bond yield is currently below 1%. Do perspective, the Russian economy is not that big and you think that the current record low bond yields and Ukrainian crisis is not that significant. credit spreads globally are sustainable? What is your mid-term view for the next two years? Fourth, the question of what growth will be sustained in China is also a factor, also in connection to the first interest Jan: In my opinion, short-term money market interest rates rates’ increases in the US. China’s growth rates should will be low for a relatively long time due to the low inflation decrease which would not be good news for Germany, being environment in the Czech economy. I expect the first interest the number three business partner for China. rates’ increase in the Czech Republic at the beginning of 2016 and in the EMU at the beginning of 2017. However In regards to the situation at the end of 2015, I think that even more pessimistic scenarios are priced in the longer- European economic growth will not be fast and we will be term yields. I believe that with the Czech 10-year yield hoping for a 1% growth by the end of 2015. 2015 will be around 0.75% and below German Bund investors are another year in which the growth forecasts for Europe/EMU underestimating the return of inflation. will be rewritten down.

Michal: In your view, what will be the key factors Michal: Thank you very much Jan, for your time and the influencing the global economy in 2015 and what will be interesting insights you shared with us. the situation at the end of 2015?

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- 5 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Independent Voice Excuse-me, do you speak financial?

By Katarína Ščecinová, CFA Portfolio managers are sort of “Bloomberg people”. They believe in the power of the data and they are addicted to During my CFA studies I spent a vast amount of time their terminals. Time spent in front of the screens gives learning how to understand financial markets and them a perception that certain matters are justified and indicators. I have also solved many complex financial predictable once the correct formula is applied. Networking problems. In my professional life as a portfolio manager and interacting with other financial professionals working with high-net-worth individuals, I try to understand strengthens their opinions and sharpens their arguments. not just the clients´ finances but also the personality of Financial models bring statistically reliable results within a each individual client I am working for. This can often be a confidence interval but move professionals away from a challenge. Behavioral finance theories assume that people reality. Contact with clients is a way to stay in touch with are deep down inside normal not rational. It might sound the real world and think outside the box. In my opinion, to simple, but it is an accurate description of the reality. meet with the clients is always a good decision even if it Knowing that individual investors might be subject to might be difficult. cognitive and emotional biases is definitely useful. Once

you identify what the biases are, you can adapt to it or

moderate it. In the context of the client´s financial situation,

the asset allocation of the portfolio may be adjusted

accordingly. However, understanding the client´s needs by

themselves does not guarantee an optimal solution. It must

be accompanied by proper communication. A solution is

only optimal if the client feels it this way. The current

environment makes communication with clients more

complicated, since they are overwhelmed by the

marketable information released by media. They admit that

in the last few years the situation has changed in respect to

the potential returns of the certain asset classes. At the

same time they expect that their portfolio manager will find

a solution for them.

Low interest rates do not offer attractive returns and seeking what were once considered safe returns now require excessive risk taking. Portfolio managers are aware of the skewed nature of today´s markets, but simultaneously they are under pressure to deliver reasonable returns. A lot of effort is made to outperform indices, markets and competitors. Every single transaction Katarína Ščecinová, CFA is being monitored and evaluated from contribution perspectives and in context of an overall strategy. The Portfolio Manager at J&T Banka most important indicators are compiled into sophisticated

presentation materials that present a bright picture of fund Mastering communication outside the financial community and management quality. Historical achievements, portfolio requires more creativity and different arguments. The volatility, benchmark volatility, information ratio and lot of individual client will not be satisfied by the fact that the others indicators must be revealed in an extremely Sharpe ratio of his portfolio is excellent while the overall transparent way. For the institutional clients, the data serve return is poor. He might refuse to listen to the thorough as a baseline for decision making process. Institutional explanation of the ratio meaning. When you are talking with clients compare data with the benchmarks. If you can the client, the client is the one who is privileged to define prove your application of the sophisticated methods in your the rules. It is impossible to satisfy the client´s curiosity with decision making process and beat benchmarks you will smart words as long as he does not understand the most likely be rewarded by institutional investors. An terminology. The portfolio manager should not only be individual client´s point of view is usually different. They flexible enough to translate financial language into ask for absolute and not relative return. Regardless of the nontechnical words in order to remove communication benchmark benefit for institutions, individuals pay little barriers with private clients, but must also be able to attention to this measure of performance. Individual clients understand and discuss non-financial themes. The diversity are generally successful people who are respected and in the clients´ points of view is surprising and endless. In recognized for their achievements in business or top communication with individual clients it is worthwhile to management positions. Nonetheless, their financial balance conversation topics. Covering only financial topics knowledge is often limited. But what they do know is how to will not get you extra points. If you meet a client who is a ask the right questions and they expect to get direct replies fan of dogs, you should be prepared to talk about animals. and clear answers. Meanwhile, investment professionals If you meet a client who is interested in winter sports, you are trained to provide them with evasive answers in the should be willing to debate the quality of wooden skis most polite manner. In practice, portfolio managers are versus new technology if the client finds it interesting. If exposed to two different worlds – institutional and some media article grabs client´s attention, you should individual.

Continuation on the next page…

- 6 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz

Independent Voice Excuse-me, do you speak financial?

have opinion on it as well. Non-financial themes serve as understand it yourself.” Paradoxically, it is the client who

an icebreaker in the conversation and makes clients more may serve as the best teacher in this respect. Whether

relaxed. But when the conversation moves to finance, clients are experienced in financials or not, they are quick to

portfolio managers should keep in mind that he is walking reveal whether you understand the financials yourself. They

on thin ice. Reading between the lines might be useful. might scrutinize your performance in a very different

Sometimes it is hard for clients to find the right words. manner than institutional investors. When their assets are

There are clients who have clear idea about their portfolio at risk, they are endowed with a sort of sixth sense. They

allocation but do not think about the risk. There are also either trust you and your results or they simply do not.

clients who only want to keep their money safe. Individual Institutional clients play a different game. They analyze your

clients do not define mandates in terms of risk/reward investment style inside-out and point out your specific

returns. Volatility is also not a friend of the clients. They mistakes in the context of the current situation in the

expect a smooth increase in their assets value. Once a financial industry. The difference between institutional client

portfolio manager understands the client`s language, he and individual client might be observable in their varying

has to react accordingly. Carefully chosen words financial goals. When dealing with institutional clients you

accompanied with solid returns might only gain the trust of are expected to meet benchmarks, while individual clients

the client. Clients who do not trust numbers are not the require you to meet their needs and wishes. In finance,

exceptions. If the client does not believe the numbers in his results are presented in terms of hard numbers. I do not

financial report are real, it might by precarious to find recall ever coming across a presentation with soft data,

common language and justify performance. such as client satisfaction, or data related to turnover, or the

average retention period of the client. Perhaps if provided, it

While Albert Einstein may have discovered the “The could uncover very useful information about management

Theory of Relativity,” his real genius came through in styles and the ability to meet expectations. noting that “if you can't explain it to a six year old you don't

- 7 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Independent Voice

Structural Reform of European Banking

By Jan Kincl the normal transaction services (payments) it would provide deposits and some loans. Everything else will be labelled a The European Commission is continuing its fight for “hedge fund”. greater stability in the banking sector

Back to the “fast post-office”: on the liability side, security can

The European Commission has spent the last two years be maintained by deposit insurance; on the assets side,

promoting a functional model of the banking union. After an however, this is not as easy. Limiting riskier business

April 2014 European Parliament vote, the Banking Union is activities or reducing the amount of riskier loans necessarily

now a reality. The package of directives and regulations falls on the bank's income, with all its negative impacts on

governs all components of the Banking Union: single return on capital, profitability, innovation and investment. banking supervision, a single framework for crisis management (and resolution) and at least harmonized, though not single, deposit insurance.

Meanwhile, doubts persist whether the Banking Union is a sufficient answer to the 2008 crisis of the financial system. When Europe has common capital adequacy rules, common supervision standards, rules of cooperation between national supervisory authorities, instruments and instructions for crisis management, methods how to deal with systemic banks, etc., is that not enough? Enough for us to say – less than six years after the crisis – that it should suffice just enough to recapitalise banks and they will start to lend?

It doesn’t seem like it. It seems that the European Commission, influenced by American, British and some European national regulators, believes that it is necessary to make one more step – a structural reform of the banking Jan Kincl sector. And such a structural reform of the banking sector Partner at Grant Thornton Advisory may fundamentally change banking as we know it. The main objective is to prevent that "insured deposits finance risky operations”, so that crises like the one from Indeed, is there something like a "safe business model"? the thirties or from 2008 are never repeated. This is Just remember Northern Rock which was using a simple important especially in the context of large systemic business model based on maturity transformation (“borrow banks – banks that have been or are too large or too short, invest in long mortgages”) and was unable to cope complex for one government to rescue. This noble goal with the sharp drop in interest rates. And Northern Rock is obscures a political project telling us that “taxpayers' money history today. should never again be used to bail out failing banks”. This goal can be reached in different ways: by (i) strengthening But there is one more unintended consequence of structural capital and liquidity rules and risk management systems of reform, namely in the area of human resources: not everyone banks (which is contained in CRD IV), (ii) the creation of will want to work at the post office, and not everyone will be tools and frameworks for crisis management, even at able to work in a hedge fund. In today's war for talent, supranational level (in the BRR and SRM directives and banking will suffer as a whole, as some talented young regulations), (iii) strengthening the confidence of depositors graduates will leave, yet others will not consider working (in the DGS directive), or (iv) structural changes of banks here. themselves. But it seems that the last point on the list, the current proposal of the banking structural reform, can take The impact on clients, the (un)availability of products us eighty years back, while at the same time open the and (reduced) liquidity banking sector to new competitors in unexpected ways. After the separation of universal banks to “deposit banks” The concept of "utility banking" and the war for talent "and "investment banks", investment banks will face new challenges that we cannot imagine today, not only One of the consequences of the announced structural demonstrated by a more difficult access to funding. At reform is to create a "safe bank" which will be financed by present the balance sheet of universal banks does not insured deposits and which will be absolutely safe for distinguish the sources of funding for "classic" and depositors. At the same time such a bank shall be very "speculative" activities. In other words, a universal bank does resistant to potential crises, as its business model should be not differentiate whether deposits are used to finance safe. In fact it will resemble a "fast post-office" or something “lending to the real economy” or to finance “positions in like a "utility" within the meaning of network industries such securities, commodities or derivatives”. Some universal as electricity, gas and water. The government would then banks even have in their internal procedures a built-in guarantee that products and services of such a utility will be automatic regime squaring their trading positions with always available to everyone and everywhere. In addition to positions in their lending books at the end of the day so as to

Continuation on the next page…

- 8 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz

Independent Voice

Structural Reform of European Banking

limit interaction with the market. This is particularly striking company or otherwise) will necessitate new sources of market in the case of Czech banks with permanent surpluses of funding for the "investment bank". However, for an deposits. In the new regime, "investment banks" would investment bank, this is a riskier business model as the have to acquire funds to finance their business activities market for financing collateral in derivative positions or exclusively from the market, i.e. at market conditions. In the financing securities positions (through repo) is by definition event that some business lines or products would not be less stable than funding via deposits. Moreover, to completely sufficiently profitable, an investment bank would not eliminate counterparty risk, this cannot be fully achieved by want to offer them, or at least would raise the price. the mandatory use of central counterparties for clearing and

settlement, nor by the use of various forms of netting. And because a deposit bank would not be allowed to offer them, clients will suffer – either the final product will Ironically, the Liikanen report states that there is no evidence be expensive, or it will be available only sometimes and or that some business models are more - or less - resistant to for certain clients, or even unavailable. Price increases will crises than other business models. be reflected in the form of spreads widening between "bid" and "ask" prices in securities, commodities or derivatives, In addition, the separation of a universal bank is a very limiting return or participation in structured products, or by complicated process, not only in terms of a "cut" in the increasing fees. Price increases and unavailability of balance sheet, but also from a tax context and all the products will then impact directly on projects in the real implications of corporate governance. And after a complete economy: some projects will also have to raise the price of separation of all activities is achieved, will we not by chance output, and some projects may not even be started. resurrect the spirit of the Glass-Steagall Act? Do we not go eighty years back in time? There are some exceptions announced, but they are a weak compensation: government bond trading, simple In addition, the creation of subsidiaries captures and freezes exchange rate-, credit- and interest rate derivatives with liquidity and capital and also contributes to further central clearing and settlement, or client-requested trading. fragmentation of the market. Opportunities for regulatory But there is no "good" and "bad" market-making; arbitrage will emerge at a global level because of market-making either exists or it does not exist as a correct inconsistencies between various proposals. Some banks will price discovery mechanism. Any attempts to limit free be tempted to utilize relative merits of the regulatory regime pricing will negatively impact the economy in the form of e.g. in the US or in the UK, or even elsewhere in the world. suboptimal cost allocation. This could strengthen competition between nations, but perhaps it is not entirely desirable. In addition, the draft European banking structural reform is designed primarily for banks in the Euro area. As such this And meanwhile, somewhere else, new capitalists are following is quite asymmetric, because banks and their clients from our debate in order to prepare soil to attack our positions. countries outside of the Eurozone must also deal with one They can either be banks from third countries through extra dimension: the exchange rate risk and the need to branches, or non-banks. hedge against it. If the reform leads to a price increase of hedging instruments for companies from countries Conclusion outside the Eurozone, their behaviour could change. They will either incur increased costs of exchange rate The draft structural bank reform is probably the most hedging, which they will further transfer to their final prices important text from the European Commission workshop after (and thus will become less competitive against their the banking union. The proposal has a great ambition to solve Eurozone peers) or they will resign, not hedge the alleged problems with the stability, size and complexity of exchange rate risk and will become more risky – for their European banks. However, the problem is being solved shareholders as well as for other parts of their supply chain. through mechanisms known from Basel and the banking union project. Economic recovery in the EU is on its way, healing Critique of Practical Unreason processes in banks have just been exposed in November 2014 after the announcement of the results of stress tests and We will now leave the political project aside and try to focus after subjecting banks under the single supervision of the on the content of the proposal in the theoretical and ECB. At the same time the European Commission wants to practical aspects. use all the experience of structural reform acquired in the United States and in the United Kingdom. To achieve its goal One of key considerations of the proposal is the belief that – to reform European banks and thus strengthen them – the the recent financial crisis was caused by large, global, Commission chose a combination of restrictions and orders, universal systematically important banks, and that with far-reaching and perhaps unexpected consequences for separation will ensure stability. But this does not hold either business models and the competitiveness of European in the case of Lehman Brothers and AIG (they were not banking. Whether and how this objective can be enforced at universal, so they could not have been the object of the political level will be the most important issue in the separation), or in the case of American, British, Irish and European debate in the financial services area for the rest of Spanish banks which had been financing real estate assets this year and for the coming year. (they were not global). Is then the “systemic stability” such an important inherent value of the system that we have to --- protect it through structural reforms? You can read a full version of the article on the Society’s

website HERE. Or is there something else that could justify the proposal? Splitting a universal bank into two entities (within a holding

- 9 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz CFA Institute – Global Impact CFA Institute Supports the Ethics in Finance-Robin Cosgrove Prize

was convinced that the finance sector should serve the common good as well as making profits. For him, trust was the essence of good banking but he feared that many young finance professionals were losing touch with the fundamentals. Robin set his life goal to promote better CFA Institute supports the Ethics in Finance-Robin understanding of the critical importance of trust, ethics and Cosgrove Prize to help promote awareness of trust and personal and corporate integrity.”

ethical behaviour in finance among students and About the Robin Cosgrove Prize young professionals

 Now in its fifth edition, the 2014-2015 prize aims to London, United Kingdom, 10 October 2014 engage with students and young finance CFA Institute is supporting the Ethics in Finance-Robin professionals to increase their awareness of ethics in Cosgrove Prize which invites students and young finance the sustainable future of the professions, including professionals to submit a paper setting out innovative ideas banking, insurance and accountancy to promote ethics and integrity in finance.  Competitors from across the globe are invited to write papers on “Innovative Ideas for Ethics in The Robin Cosgrove Prize is committed to implementing Finance” in a maximum of 5,000 words and the age ideas on how to promote trust and ethical behaviour across limit is 35 years. The competition opens in October the professions within the finance sector. The prize was set and the final submission date is 15 April 2015, with up by Carol Cosgrove-Sacks, and the Observatoire de la an award ceremony in November 2015 Finance in Switzerland, in honour of her son Robin

Cosgrove, a young investment banker who tragically died in  Papers from individuals or from small teams of two

an accident on Mont Blanc at the age of 31 in 2004. or three people are welcome

Kate Lander, CFA, Head of Education at CFA Institute --- commented: See the updated version of Code of Ethics (available “Robin Cosgrove believed that the finance industry and all also in CZ version) its participants bring benefits to society at large, and he

CFA Institute – Global Impact Looking Back at Seventh Annual European Investment Conference

attendees about the shortcomings of “too big to fail” fixes and how governments, central banks and regulators can work together to escape the debt that continues to depress global economic growth. Turner warned against excessive

leverage, “real estate lending” and property price inflation,

CFA Institute and CFA Society of the UK Host Seventh and suggested:

Annual European Investment Conference “If excessive private debt results in crisis, post-crisis debt Theme of the conference is ‘A Fresh Perspective: overhang and deflation, we need to design policies which Checking Assumptions, Challenging Mindsets’ can in future lean against excessive credit growth, and in particular against the growth of those forms of credit which 17 October 2014 cause most harm.”

CFA Institute and CFA Society of the UK hosted the The Conference was chaired by James Mackintosh, Investment Editor of the Financial Times and the line-up of seventh annual European Investment Conference in London, with attendees joining the event from across over twenty speakers included Elroy Dimson, Emeritus Professor of Finance and Co-Director for the Centre for Europe, around the world and online. The Conference brought into sharp focus the challenges still facing the Endowment Asset Management at London Business School; Elizabeth Corley, CEO, Allianz Global Investors; financial services industry in Europe. Participants engaged in robust discussions about how processes, practices and and Philippa Malmgren, President and Founder, DRPM Group. mindsets must change in order to shape the future of the investment industry. Post-conference content is available on the European Leading practitioners, academics, and economists Investment Conference website and via the following presented on topics as diverse as “the New Cold War,” the channels: complexity of supply chains, and the stock market  Watch again: Live-streamed sessions investments of John Maynard Keynes.  Read: the conference blog and download speaker In his opening keynote address on Thursday morning, Lord presentations Adair Turner, Senior Fellow at the Institute for New  Follow: the conference @CFAemea Economic Thinking, spoke to an audience of more than 300

- 10 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz CFA Institute – Global Impact

BlackRock Adopts CFA Institute Asset Manager Code of Professional Conduct

The Asset Manager Code of Professional Conduct is grounded in the ethical principles of CFA Institute and the CFA Program, and requires that managers commit to the following professional standards:

BlackRock Adopts CFA Institute Asset Manager Code of  To act in a professional and ethical manner at all times Professional Conduct  To act for the benefit of clients

World’s largest asset manager is latest firm to pledge  To act with independence and objectivity ethical behavior to shape a more trustworthy financial  To act with skill, competence, and diligence industry  To communicate with clients in a timely and New York, 4 December 2014 accurate manner

 To uphold the rules governing capital markets CFA Institute, the global association of investment professionals that sets the standard for professional "Trust in the investment profession remains at risk, and excellence, has added BlackRock to the growing list of it’s a critical moment for investors and the future of the investment firms that claim compliance with its Asset financial system,” said Jonathan Boersma, CFA, head of

Manager Code of Professional Conduct. BlackRock, the professional standards at CFA Institute. “We applaud world’s largest asset manager, is one of more than 1,000 BlackRock, and all firms that have adopted the code, for firms worldwide that claim compliance with the code. displaying a steadfast and tangible commitment to

professional ethics and putting investors first." The Asset Manager Code of Professional Conduct clearly outlines the ethical and professional responsibilities of firms “Firms like BlackRock that actively demonstrate their that manage assets on behalf of clients. For investors, the integrity are the kind of industry leaders we need to code provides a benchmark of ethical conduct they should advance the profession and shape a more trustworthy expect from asset managers and offers a higher level of financial industry,” added Michael Trotsky, CFA, confidence in firms that adopt the code. executive director and chief investment officer of the Massachusetts Pension Reserves Investment “Investors deserve and should expect the highest level of Management Board and member of the CFA Institute professional conduct in the firms and individuals with whom Board of Governors. they entrust their investments,” said Rob Goldstein, BlackRock’s Chief Operating Officer. “Our clients entrust There are more than 1,000 firms claiming compliance BlackRock to manage more assets than any other firm in the with the Code including Ariel Investments, Janus Capital world, they are our number one priority. Adopting the Asset Management, JP Morgan Asset Management, Loomis Manager Code of Professional Conduct is one more Sayles, Morgan Stanley Investment Management, Inc., demonstration of our commitment to placing the needs and TD Asset Management, and US Bancorp Asset interests of our clients above all else.” Management. (View the full list.)

GET ACCESS TO RELEVANT INVESTMENT MANAGEMENT AND FINANCIAL ANALYSIS

RESEARCH AND NEWS BY SUBSCRIBING TO CFA INSTITUTE PUBLICATIONS HERE.

- 11 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Your CFA Society Update CFA Society Introduces GIPS Standards in the Czech Republic

Originally published in the previous Newsletter No. 4 CFA and Matěj Turek, CFA, board members of the CFA

October 2014. Society, and as an observer Jan Bursa, CFA, head of trade

execution oversight at the Czech National Bank. Rules on performance reporting to strengthen investor confidence The post event feedback shows that all professionals who attended the event believe that the adoption of the GIPS As another step towards better protection of Czech standards will be beneficial for the Czech investment investors, CFA Society together with AKAT, the Czech industry and that 44% considers recommending the asset managers' association, launched a campaign to implementation of the standards in their organization. implement Global Investment Performance Standards. More about the Standards GIPS are a set of rules that aim to enable clients to objectively evaluate investment managers. Any company The GIPS govern, among other issues, the inclusion of can comply, but there are 37 markets where GIPS are clients into a 'composite' that shows their average returns. promoted by official 'country sponsors' - from the USA to Managers can't choose only clients with the best returns Pakistan to Austria. The Czech Republic will be the 38th to and thus present overstated results. It is mandatory to join. include all clients with an identical strategy.

To kick off the initiative, Iain McAra, CFA Institute's GIPS The standards, which have been developed by the CFA Director for the EMEA region, delivered a presentation in Institute since 1999, are relevant for all companies that Prague on Sept. 30. provide active portfolio management to private and institutional clients. This includes real estate and other GIPS stipulate the way for asset managers to calculate and alternative asset classes. present the performance of client portfolios. This should allow prospective clients to compare between different They are also relevant for investment companies – managers, within and across borders. although the NAV of a fund (and thus its performance) is already calculated in an uniform way, the Standards “The standards will benefit not only asset managers, but regulate the way returns are presented – e.g. reporting at also intermediaries, regulators, and especially investors. least 10 years of returns, or the maximum available history We are therefore delighted, that the Czech National Bank of a strategy. and Ministry of Finance expressed their support for our initiative,” says Petra Roberts, CFA, Executive Director of CFA Society Czech Republic. (Adapted from a press release.)

“In our group, we believe the standards will help further Aleš Tůma, CFA cultivate the local market and increase the credibility of the PR Manager industry,” says Martin Řezáč, CFA, Managing Director of ISČS and member of the Czech GIPS preparatory committee. ---

“If any clients should lead by example and demand GIPS compliance from their managers, it should be the public See ‘Why GIPS Compliance Matters for Investors’ sector,” notes Radek Urban, advisor to the Ministry of

Finance and an observer in the committee. See Iain McAra’s presentation ‘The GIPS Standards: Mission and Vision – A Road Map’ Other members of the GIPS committee are Jana Michalíková, Executive Director of AKAT, Lubomír Vystavěl,

- 12 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Your CFA Society Update 5th Annual ACCA CFA & Business Mixer

Investors, do not look only at the numbers, expert fairly and succumbs to a conflict of interest, loses its advises integrity and independence. Eventually loses the confidence of clients and the business opportunities," says Prague, October 24 Bolland.

Analysts, shareholders, auditors – they all have been equipped several years after the financial crisis with thousands of pages of new regulations, although they must still be careful with firms if they play fair. How to not get burned, about that lectured Jeremy Bolland, financial and accounting professionals at the 5th Annual ACCA CFA & Business Mixer in Prague on October 23, internationally sought-after speaker in the field of investment analysis.

"Sometimes management seeks to deploy blinkers to the auditors. Sometimes they may lie to the shareholders. Analysts must dig deep to fully understand the company, its managers motivation, intrinsic value of its shares or bonds, and the associated risks, "says Bolland.

You cannot rely only on numbers, he says. Quality of management and control in the company (corporate governance) or, more generally, social responsibility are still underestimated by his subjects. Analysts, according to him Jeremy Bolland, keynote speaker should make sure that a firm devoted sufficient effort of risk management and ethics. Correct assessment of the Jeremy Bolland is an independent consultant in the field of company value from the financial statements can then add securities analysis and author of Writing Securities a markup or vice versa discount, which will help determine Research – A Best Practice Guide. He regularly schools the suitability of investments. analysts from banks and brokerage companies, as well as members of the CFA Institute worldwide about the pitfalls Quality of management has in fact an impact on the share in analyzing companies. He has 30 years of experience price. Bolland cited example – Analysis of the investment from London, Tokyo or Hong Kong. He worked for Morgan company Hermes. It found that in Europe in the years 2008- Stanley, ING Barings, HSBC and BNP Paribas and others. 2013 between the best and worst stocks managed companies difference of 0.4% per month. The seemingly ACCA and CFA Society Czech Republic organizes small difference in terms of annual and longer performance Business Mixer for its members for the fifth year in order to provides very different results for investors. present interesting international speakers and their views on current developments in the world economy. The event In his presentation he mentioned many examples where will connects analysts, consultants, auditors and many other shareholders pay the price. E.g. this year's fine for a professionals who have a common interest in the multinational pharmaceutical company for bribing doctors in development of the financial market. China. Or banks accused of manipulating LIBOR rate, which in the last two years received together fines over 6 billion USD. Similar investigations are now in progress, also (Adapted from a press release.) in connection with the currency market. Aleš Tůma, CFA Ethics is worthwhile, not only to the investors, but also to the employees in finance. "Who is not accessing clients PR Manager

SEE VIDEO FROM THE 1. ČESKÁ INVESTIČNÍ KONFERENCE HERE. CFA SOCIETY CZECH

REPUBLIC WAS A PARTNER TO THIS EVENT.

- 13 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Your CFA Society Update CFA Charter Awarding Ceremony 2014

18 experts from the Czech Republic and Slovakia "Investors often consider whether the target company itself received the prestigious title CFA this year can be used to pay the purchase price. For example, they pledge portion of its assets in favor of the bank, which Prague, 28 November 2014 provides the acquisition loan. Lenders now commonly require that emerging debt was secured by assets and Eighteen financial experts from the Czech Republic and cash-flow of the target company. In practice, the question Slovakia managed to meet the demanding requirements to arises how to comply with the request and not to violate a obtain the certificate Chartered Financial Analyst (CFA) this ban on so-called Financial assistance. Possibility can be a year. The ceremony took place on 27 November in Prague subsequent merger between the target company and the at CERGE-EI. acquiring company," said Němec.

CFA Society Czech Republic currently brings together a See presentation from our Charter Ceremony's keynote total of 141 professionals – portfolio managers, analysts, speaker, Robert Nemec, Partner at PRK Partners. consultants, investment bankers and top managers of financial institutions.

The CFA Program is one of the toughest qualifications in finance, is comparable to the MBA studies, and in many countries it is recognized instead of brokerage or other professional examinations.

"Studies are successfully completed by less than one fifth of applicants. Not only because of its complexity CFA charter is globally recognized as the 'gold standard' in the world of finance. This gives charterholders an advantage in finding employment with the best companies both at home and abroad," says Jan Brázda, CFA, vice president of CFA Society Czech Republic.

In the Czech Republic the largest employers are EY, ČSOB

and Erste Group, but the graduates from the program work across the entire financial sector.

Financial Times recently likened CFA as "the new MBA." For many people in senior positions in the financial sector is

CFA an interesting alternative to the general managerial education. The quality of the MBA may vary from school to school, but CFA exams are globally consistent.

See Jan Brázda’s presentation on CFA Institute and CFA Society's update 2014

The awarding ceremony was held traditionally in areas of CERGE-EI and was associated with an expert lecture. Robert Němec, LL.M., partner of the law firm PRK Partners, spoke on the topic of mergers and acquisitions financing.

- 14 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Your CFA Society Update CFA JobLine – Senior Job Positions

For anyone considering a new job, we would like to point out a number of interesting job offers that have been posted to our CFA JobLine website, including some that are offered exclusively on CFA JobLine.

See a selection of senior job positions suitable primarily for CFA charterholders or CFA candidates Level 3:

 Senior Associate / Director – Vienna Capital Partners

 Manager – PwC (Capital Projects & Investment team)

 Senior Manager / Executive Director in Transaction Advisory Services - EY

 Senior Consultant for Credit Risk team – EY

TO VIEW MORE POSITIONS CLICK HERE.

Learn the key elements of a job search strategy from career coach Rob Hellmann

Your CFA Society Update Research Challenge 2014 – 2015 – Update

Local round of the 5th annual Research Challenge in the winning teams will compete at a regional level, visit the Czech Republic is currently underway. This time there is Research Challenge website. a record number of 15 teams from 11 universities and for the first time there are two universities from Slovakia. Local final will be held on 28 January 2015 in Prague at VŠE (University of Economics). Come and see The target company for 2015 CFA Institute Research presentations of best teams. Winner will represent Czech

Challenge is Pegas Nonwovens, one of the leading Republic and Slovakia at Regional EMEA Final in European producers of nonwoven textiles. Amsterdam on 1-2 April 2015.

To see what the Research Challenge is about and to see the timeline which will spam until April when the local

CFA Institute Research Challenge

Learn more about the Research Challenge on the CFA Institute official web page HERE.

- 15 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Your CFA Society Update Looking Back on Previous Four Editions of Our Newsletter (No.1 – No. 4)

You are now reading the fifth edition of our Society’s Capital Gains Taxes: What's the Point?” pertaining the Newsletter. The first edition was published more than a change in the Czech tax code from 1 January 2014. year ago on 24 September 2013. With the year-end No. 3 Edition – May 2014 included the interview with approaching we would like to take the opportunity and point out some of the most interesting content from the first Michala Antonínová, CFA about private banking in the

four editions, namely the interviews and the articles from Czech Republic, Tanweer Ali, CFA’s article “Dissecting the our members and other finance professionals from the ‘Dumbest Idea in the World’” – review of the book The Shareholder Value Myth: How Putting Shareholders First section Independent Voice, previously titled Members’ Independent Voice. Harms Investors, Corporations and the Public by Lynn Stout, and Matěj Turek, CFA’s article “Different This No. 1 Edition – September 2013 included the interview Time?” pertaining lofty financial markets valuations.

with sell-side equity analyst Robert Rethy, CFA, the No. 4 Edition – October 2014 included the interview with summary of Jeremy Monk’s discussion paper “VaR from investment banker Jiří Korbel, CFA about the IPO of Perfect: The Unintended Consequences of Setting a Limit to Calculated VaR” and Michal Stupavský, CFA’s article Pivovary Lobkowicz on the Prague Stock Exchange, Ján “What It Takes to Become a Genuine Investment Hájek, CFA’s article “Does the current valuation of US equity market signal a correction?”, and Lucia Houfková, Professional”. FRM, CFA’s article “The Rules of the Financial World Get No. 2 Edition – December 2013 included the interview Complicated” about the exponentially growing number of with professor Meir Statman, US academic guru of EU’s Directives and Regulations of the financial sector. behavioral finance, the interview with CFA Institute’s Barbara Petitt about the Future of Finance Initiative, Lukáš We would like to encourage you to come back to the previous editions of our newsletter in case you missed Brych, CFA’s article “Czech Economic Cycle: A Remote View Attempt” and Aleš Tůma, CFA’s article “Changing content we believe is worthwhile reading and which is mentioned above.

Your CFA Society Update Invitation to CFA Society FORECASTING DINNER 2015 on 19 February 2015

- 16 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Your CFA Society Update Invitation to CFA Society FORECASTING DINNER 2015 on 19 February 2015

- 17 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz Your CFA Society Update EVENT SEASON 2014 – 2015

- 18 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz PR Team of the CFA Society Czech Republic Contacts

Petra Roberts, CFA Michal Stupavský, CFA

Executive Director Member & Newsletter Manager Email: [email protected] Email: [email protected] GSM: +420 603 489 663 GSM: +420 608 737 053

Aleš Tůma, CFA Phillip Tencick, CFA Member & PR Manager Member & Editor

Email: [email protected] Email: [email protected] GSM: +420 776 619 723 GSM: +420 702 064 534

CFA Society Czech Republic Useful Links

 CFA Society Czech Republic  CFA Society Czech Republic – Members of the Board of Directors and Executive Director 2013-2015

 CFA Society Czech Republic – Membership

 CFA Society Czech Republic – Volunteering

 CFA Society Czech Republic – Research Challenge

 CFA Society Czech Republic – JobLine  CFA Society Czech Republic – Press room

 CFA Institute

 CFA Program

 CIPM Program

 Claritas Investment Certificate

 CFA Institute – Integrity & Standards  CFA Institute – Code of Ethics and Standards of Professional Conduct

 CFA Institute – Future of Finance

 CFA Institute – Mission & Vision

- 19 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz About the CFA Society Czech Republic

The CFA Society Czech Republic is an association of finance CFA Society Czech Republic je asociace finančních a investičních and investment professionals in the Czech Republic, founded odborníků, založená v dubnu 2002 v České republice. Je jednou in April 2002. It is one of 138 member societies of the CFA ze 138 členských asociací CFA Institute a jejím posláním Institute, and its mission is to promote the highest standards je v rámci české finanční a investiční komunity podporovat nejvyšší of ethics, education, professional excellence and efficient markets standardy etiky, vzdělání, profesionality a efektivních trhů, in the Czech financial and investment community; to promote podporovat profesionální rozvoj v rámci studijního programu CFA

professional development through the CFA Program a celoživotního vzdělávání, usnadňovat výměnu informací and continuing education; to facilitate the exchange of information a názorů, a v neposlední řadě zvyšovat povědomí veřejnosti and opinions; and to enhance public awareness of the CFA o portfoliu studijních programů CFA Institute: CFA® Program, Institute’s portfolio of educational programmes: the CFA® CIPM® Program a Claritas® Investment Certificate. V dubnu 2014 Program, the CIPM® Program, and the Claritas® Investment asociace sdružovala 141 členů, většinou držitelů titulu CFA, a 987 Certificate. As of April 2014, the association has 141 members, kandidátů z České republiky a Slovenska zapojených do programu mostly CFA charterholders, and there are 987 CFA Program CFA. Mezi členy asociace patří především vrcholoví manažeři, candidates from the Czech Republic and Slovakia. The members portfolio manažeři, finanční analytici, investiční bankéři, analytici hold a variety of positions, including: chief-level executives, korporátních financí, konzultanti, finanční poradci, risk manažeři

portfolio managers, financial analysts, investment banking a relationship manažeři. Sponzory CFA Society Czech Republic analysts, corporate finance analysts, consultants, financial jsou EY, ČSOB Asset Management a ING Investment advisors, risk managers, and relationship managers. Sponsors Management. Pro více informací navštivte webové stránky of the CFA Society Czech Republic are: EY, ČSOB Asset www.czechcfa.cz. Management and ING Investment Management. For more information, visit www.czechcfa.cz.

CFA Society Czech Republic – Members of the Board of Directors Follow us on Facebook, Twitter and LinkedIn and Executive Director 2013-2015 You will find very interesting updates there!

About the CFA Institute

The CFA Institute is the global association of investment CFA Institute je globální asociace investičních odborníků, professionals that sets the standards for professional excellence jež stanovuje standardy profesní excelence a kvalifikace. and credentials. The organization is a champion of ethical Organizace aktivně prosazuje etické chování na finančních trzích behaviour in investment markets and a respected source a je respektovaným zdrojem znalostí v globální finanční komunitě. of knowledge in the global financial community. The end goal: Konečným cílem je vytvořit prostředí, kde budou stát zájmy create an environment where investors’ interests come first, investorů na prvním místě, trhy budou fungovat co nejefektivněji markets function at their best, and economies grow. The CFA a ekonomiky porostou. CFA Institute má více než 117 tisíc členů Institute has more than 117,000 members, including 109,500 CFA ve 141 zemích a teritoriích, včetně 109 500 držitelů titulu CFA charterholders, who span 141 countries and territories and 138 (CFA charterholders), a 138 členských asociací. Pro více informací member societies. For more information, visit www.cfainstitute.org. navštivte webové stránky www.cfainstitute.org.

About the CFA Program

To earn the CFA (Chartered Financial Analyst) charter, candidates K získání titulu CFA (Chartered Financial Analyst) musí kandidáti must sequentially pass three six-hour exams that are widely postupně složit tři šestihodinové zkoušky, jež jsou v investiční considered to be the most rigorous in the investment profession. profesi obecně považovány za nejpřísnější. Osnovy CFA zahrnují The CFA curriculum includes ethical and professional standards, etické a profesní standardy, finanční reporting a analýza, financial reporting and analysis, corporate finance, economics, podnikové finance, ekonomie, kvantitativní metody, akcie, quantitative methods, equity, fixed income, alternative investments, dluhopisy, alternativní investice, deriváty, portfolio management derivatives, portfolio management, and wealth planning. The CFA a finanční plánování. Od spuštění programu CFA v roce 1963 Institute has administered well over a million exams since CFA Institute uspořádal přes jeden milion zkoušek. the inauguration of the CFA Program in 1963.

The Level I exam is offered twice per year, and the Level II Zkouška první úrovně je pořádána dvakrát ročně, zkouška druhé and Level III exams are offered once each year. On average, a třetí úrovně jednou ročně. Kandidáti podle svých výpovědí stráví candidates report spending more than 300 hours studying přípravou na každou úroveň zkoušky v průměru více než 300 in preparation for each level. CFA candidates typically take four hodin studia a obvykle jim trvá čtyři roky, než tři požadované years to pass the three required exams. CFA candidates cite zkoušky úspěšně absolvují. Kandidáti uvádí jako primární motivaci career advancement, obtaining a higher level of knowledge, k registraci na zkoušku CFA tři hlavní důvody: kariérní postup, and improving their chances of obtaining a job as the top three vyšší úroveň znalostí a zlepšení šancí na získání zaměstnání. reasons why they register for the CFA exam. For more information, Pro více informací navštivte webové stránky www.cfainstitute.org. visit www.cfainstitute.org.

- 20 - NEWSLETTER | No. 5 | December 2014 | CFA Society Czech Republic | www.czechcfa.cz