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. Investing

    The Series 3 Exam: Creating A Career With Commodities

    The Series 3 exam is the quickest way to diversify sales and add futures to your investing options.
  2. 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.
  3. Financial Advisor

    6 Proven Tips For Series 6 Success

    These techniques can help you pass this test without the added stress.
  4. 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.
  5. 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?
  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. 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.
  8. Investing

    What is Basel III?

    The purpose of the Basel accords is to improve the worldwide bank regulatory framework.
  9. Financial Advisor

    How to Avoid Advisors Who've Been Disciplined

    It's not hard to find out if a potential financial planner has a shady past. Here's why it's so important to check an advisor's credentials and history.
Frequently Asked Questions
  1. Is it possible for a country to have a comparative advantage in everything?

    Learn whether one country can have a comparative advantage in everything and what the difference between comparative advantage ...
  2. What's the difference between publicly- and privately-held companies?

    Privately-held companies are owned by the company's founders, management, or private investors. Public companies are owned ...
  3. What Are Short-Term Investment Options?

    If you only have a short period of time in which to invest your money, there are several short-term investment options you ...
  4. What are leading, lagging and coincident indicators?

    Leading indicators move ahead of the economic cycle, coincident indicators move with the economy, and lagging indicators ...
Trading Center