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

Related Articles
  1. Insights

    The National Futures Association As Market Watchdog

    As the overseer of the commodities and futures industry, the NFA helps to protect investors from fraudulent futures activities.
  2. Trading

    Introduction To Level II Quotes

    Level II quotes show a ranked list of the best bid and ask prices from each market participant, providing detailed insight into a stock’s price action.
  3. Personal Finance

    Tips for Taking the CFA Exam: Part 2

    Peter Mackey, head of exam development for the CFA Institute, shares his tips for passing the CFA level I, II and III exams.
  4. Trading

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  5. Investing

    Understanding The Basel III International Regulations

    The Basel III regulations mark a drastic reform in international banking. But how do they impact the future's investment landscape?
  6. Insights

    FINRA: How It Protects Investors

    Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.
  7. Financial Advisor

    What Advisors Need to Know About Rule 3210

    Here's what advisors and brokers need to know about FINRA Rule 3210.
  8. Personal Finance

    What To Expect On The CFA Level III Exam

    The Chartered Financial Analyst Level III exam, which is only offered in June, is the last in the series of three tests that CFA candidates must pass.
  9. Investing

    What is Basel III?

    The purpose of the Basel accords is to improve the worldwide bank regulatory framework.
Frequently Asked Questions
  1. How did the ABX index behave during the 2008 subprime mortgage crisis?

    Read about the disastrous performance of the various ABX indexes in the subprime mortgage crisis of 2008 during the middle ...
  2. How did moral hazard contribute to the 2008 financial crisis?

    Learn about moral hazard, how it can affect outcomes and how it contributed to the conditions that led to the 2008 financial ...
  3. Which mutual funds made money in 2008?

    Read about the only mutual fund that turned a profit in 2008. Learn about risk-averse investment strategies and the financial ...
  4. Were Collateralized Debt Obligations (CDO) Responsible for the 2008 Financial Crisis?

    Collateralized debt obligations are exotic financial instruments that can be difficult to understand, Learn the role they ...
Trading Center