PKMC Module 3: The Foreign Exchange Market explained

What is PKMC Module 3?

Module III is the third of the four Pasaran Kewangan Malaysia Certificate (PKMC) modules. According to AICB's specification, it covers local and global developments and market practice in foreign exchange, the central bank's role, FX risks, the mechanics of FX transactions, spot, forward and swap computations, and the basic premises of technical analysis.

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 3?

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 3 cover?

Both specifications have seven learning topics. The weightings below are current (version 1.3) and then revised (version 2.0, from 1 March 2027):

• Introduction to the Foreign Exchange Market: 10%, then 8%. Market participants, factors affecting rates, dealer positions, dealing terminology, FX regimes and global market practice.
• Role of Central Banks in Currency Markets: 6%, then 8%. Why and how central banks intervene, including spot versus forward intervention.
• Risks in Foreign Exchange: 21%, then 13%. Exposure and counterparty risk, and hedging and trading strategies including non-deliverable forwards and carry trades.
• Foreign Exchange Mechanics and Applications: 26%, then 27%. Spot transactions, quotations and points, cross rates, value dates, contract types and foreign currency accounts.
• Foreign Exchange Mathematics and Applications: 17%, then 18%. Cross rates, customer counter rates, value dates, fixed and optional delivery, profit and loss, position keeping and revaluation.
• The Forward and Swap Market: 15%, then 13%. Swap points, swap funding cost, and pricing early take-up, extensions and cancellations.
• Technical and Fundamental Analysis: 5%, then 13%. Charting tools, trend analysis and chart patterns.

What changes in the revised Module 3 syllabus?

• Weightings: technical and fundamental analysis rises from 5% to 13%, while FX risks fall from 21% to 13%. The other topics move by one or two percentage points.
• Exam format: still 80 questions, now split into 60 independent multiple-choice questions and 20 scenario-based ones.
• Content: the revised introduction no longer lists the historical development of FX markets, recent market developments or the major developments of the Malaysian FX market as separate assessment points.
• Timing: the revised specification applies to exams from 1 March 2027. Exams before then follow version 1.3.

PKMC Module 3 exam format

• Duration: 2.5 hours on Pearson VUE.
• Questions: 80 multiple-choice questions. From 1 March 2027, 60 independent and 20 scenario-based.
• 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 3 study

AICB recommends a three-month study period, and registered candidates get the study text and mock exam questions online. Mechanics and mathematics together make up 43% of the current exam and 45% of the revised one, so practice is essential.

• Master quotation conventions and value dates first, as cross rates, profit and loss and swaps build on them.
• Work through cross-rate, forward and swap-point calculations on an on-screen calculator until they are routine.
• If you sit the exam from March 2027, give technical and fundamental analysis far more time than the old 5% weighting suggested.
• Practise multi-step scenario questions, since the revised exam includes 20 of them.
• Check the exam date against the effective date before choosing your study text.

PKMC Module 3 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.