PKMC Module 2: The Money Market explained

What is PKMC Module 2?

Module II is the second of the four Pasaran Kewangan Malaysia Certificate (PKMC) modules. AICB's specification says it gives an in-depth understanding of how the money market works, in general and in Malaysia, including the central bank's use of the money market to carry out monetary policy, secondary trading of instruments, and the Shariah framework for Islamic finance.

It is a Level 2, self-study module offered on demand, so you can enrol and sit the exam at any time within your time limit.

Who must take PKMC Module 2?

Bank Negara Malaysia's Code of Conduct for Malaysia Wholesale Financial Markets requires dealers and brokers to be licensed members of ACI-Financial Markets Association of Malaysia (FMAM), and financial institutions must check that FMAM's professional requirements are met before appointing them. AICB states that FMAM members must pass all four PKMC modules before they are licensed to take part in the interbank foreign exchange and money market.

What does PKMC Module 2 cover?

Both the current and revised specifications have the same ten learning topics with the same exam weightings:

• Overview of Financial Markets (6%): market types, flow of funds and the structure of a bank treasury.
• The Structure of Money Markets, Role of Central Banks and Eurocurrency Deposits (10%).
• Money Market Conventions (10%): quotations, accrued interest, day-count and date conventions, and nostro and vostro accounts.
• Time Value of Money (14%).
• Fixed Income Instruments (9%): primary and secondary markets, credit risk, yields, pricing and duration.
• Money Market Instruments (9%): government securities, Treasury bills, negotiable instruments of deposit, bankers' acceptances, repos, and Cagamas and Khazanah instruments.
• Reserve and Liquidity Requirements (8%): the Statutory Reserve Requirement and Basel III.
• Cost of Funds (9%): historical, marginal and hybrid approaches.
• Money Market Management and Strategies (11%): yield curve theories, portfolio strategies and gapping.
• Introduction to Islamic Money Market (14%).

Which calculations are in PKMC Module 2?

Module II is calculation-heavy. The revised specification asks you to:

• Calculate day-count factors using Act/360, Act/365, 30/360 and Act/Act.
• Work out interest with simple interest rates and settlement proceeds with discount rates, and convert between the two.
• Calculate present and future values, annuities, uneven cash flows, forward rates and effective annual rates.
• Price bonds and sukuk and estimate price changes using duration.
• Calculate interest or settlement amounts for MGS, GII, Treasury bills, SNID, LNID, ZNID, FRNID, repos and bankers' acceptances.
• Calculate the Statutory Reserve Requirement and eligible liabilities, the cost of funds, and Islamic money market prices, proceeds and settlement.

What changes in the revised Module 2 syllabus?

The revised specification (version 2.0) applies to exams from 1 December 2026 and replaces version 1.2. Comparing the two documents:

• Exam format: still 80 questions, now split into 60 independent multiple-choice questions and 20 scenario-based ones.
• Payment systems: PayNet is now listed alongside RENTAS and the settlement process.
• Benchmarks: LIBOR reform is covered with named successor risk-free rates such as SOFR, SONIA and €STR, and the Malaysia Overnight Rate (MYOR) replaces KLIBOR in the money market conventions topic.
• Instruments: Government Investment Issues (GII) are added alongside MGS and Treasury bills, and bond topics now refer to bonds and sukuk.
• Regulation: the Single Counterparty Exposure Limit replaces the single customer exposure limit, and stress testing requirements of the Basel Committee and BNM are added.
• Islamic finance: the Shariah Authorities for Bank Negara Malaysia and the Securities Commission Malaysia are added.

PKMC Module 2 exam format

• Duration: 2.5 hours on Pearson VUE.
• Questions: 80. From 1 December 2026, 60 independent and 20 scenario-based multiple-choice questions.
• Pass mark: 75%. Fail bands are 65-74, 50-64, 30-49 and 29 and below.
• Closed book. You must use the online calculator and scratchpad in the exam; physical calculators and blank paper are not allowed.
• Online-proctored or at a test centre, in monthly exam windows, with results within 7 days.

How to plan your Module 2 study

AICB recommends a three-month study period, and registered candidates get the study text and mock exam questions online. A sensible plan for this module:

• Learn the conventions first. Day counts and quotation methods feed into almost every later calculation.
• Practise calculations until they are routine, using an on-screen calculator so you are comfortable with the exam set-up.
• Give the two 14% topics, Time Value of Money and the Islamic money market, the time their weighting deserves.
• Practise scenario-style questions that combine several steps, since the revised exam includes 20 of them.
• Confirm which specification applies to your exam date before you buy or download study material.

PKMC Module 2 textbook author at Ogos Learning

Founder and principal trainer Jin Yoong Chong, CFA, is an HRD Corp accredited trainer who has run accredited CPE courses for capital market licence holders since 2010. He has served as President of the CFA Society Malaysia and authored the PKMC Module 2, 3 and 4 textbooks with AICB.