Regulations - Summary And Review

Summary
An Associated Person (AP) is one of several kinds of individuals or firms that must register with the FCTC; each of these categories has its own rules governing registration. The AP must be familiar with rules governing opening accounts and reporting positions, as well as rules governing futures commission merchants (FCMs), introducing brokers (IBs), commodity pool operators (CPOs) and commodity trading advisors (CTAs). The AP must further be familiar with NFA rules governing arbitration and disciplinary proceedings.

Review


  1. A firm need not register with the CFTC if it is already registered with the:
    1. SEC
    2. NFA
    3. Both A and B
    4. Neither A nor B


  1. Every AP is qualified to

I. take customer orders

II. trade on her firm's account

III. trade on a customer's discretionary account

IV. supervise other APs

a. I only

b. I and II

c. I, II and III

d. I, II, III and IV

  1. Large-scale traders must report their positions

a. annually

b. semi-annually

c. quarterly

d. daily

  1. Which is NOT a stipulation of Rule 2-29 governing public communications?
    1. Promotional materials may not be deceptive or misleading
    2. Promotional materials may not use high-pressure sales tactics
    3. Testimonials must prominently state, in all cases, that they are paid testimonials.
    4. Must be accompanied by an equally prominent statement of the risk of loss


  1. Which statement about disciplinary procedures is TRUE :
    1. Investigations are initiated by the NFA's Business Conduct Committee.
    2. All violations are dealt with through the procedure of convening hearings.
    3. There is no appeal in the disciplinary hearing process.
    4. Monetary fines cannot exceed $250,000.

  2. A securities broker/dealer may offer security futures contracts.
    1. True
    2. False

  3. Which of the following individuals may approve security futures accounts?
    1. Series 24
    2. Series 3
    3. Series 30
    4. Series 53

  4. The following are self-regulatory organizations.

I. The SEC

II. FINRA

III. NFA

IV. CFTC

V. FDIC

1. II, III, V

2. I, III, V

3. II, III

4. I,II, III

  1. Brokerage and futures accounts are subject to substantially similar rules on account protection.
    1. False
    2. True

  2. Associated persons are subject to binding arbitration as are FINRA securities licenses.
    1. True
    2. False



Answers
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