IISI Exam: Shifting from Trading Intuition to Risk-Based Focus

I wanted to share the experience of taking the IISI Capital Markets Regulation exam because it completely changed how I approach learning these materials. For a long time, I relied on my intuition from daily trading operations, but I quickly realized that the regulator views things in a much more risk-focused manner than the market does. I spent the final month simply reading the ICWIM syllabus chapters on investment limits and prohibited transactions, rewriting the key tables that track exposure to single counterparties under the new Basel III liquidity coverage ratios. I found that the small print regarding how floating rate notes interacted with the central bank’s policy rates was the most confusing part, so I created a separate set of flowcharts to visualize the redemption process. It turned out that many of the questions were asking about the legal remedies available if a counterparty defaults, which is something you just cannot shortcut with just common sense. I also recommend practicing the calculator questions very often because the timing is incredibly tight. Godspeed to you all.