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Question 1 of 10
1. Question
Which of the following statements is true regarding modification of award?
Correct
Modification of award
Generally, decisions by the arbitration panel of the National Futures Association (NFA) and any related awards are considered to be final and binding on the parties. Typically, the parties do not have a right to appeal. After the final judgment, an award may be modified in the following circumstances when a written request is made by one of the parties within 20 days of the date of service of the award:
• The award was based on a material calculation error or on an improper description of any person, thing, or property relevant to the award.
• The award was based on a matter not properly referred to the panel.
• The award is imperfect in matter of form.Incorrect
Modification of award
Generally, decisions by the arbitration panel of the National Futures Association (NFA) and any related awards are considered to be final and binding on the parties. Typically, the parties do not have a right to appeal. After the final judgment, an award may be modified in the following circumstances when a written request is made by one of the parties within 20 days of the date of service of the award:
• The award was based on a material calculation error or on an improper description of any person, thing, or property relevant to the award.
• The award was based on a matter not properly referred to the panel.
• The award is imperfect in matter of form. -
Question 2 of 10
2. Question
Regarding arbitration costs against respondent, which of the following statements is false?
Correct
Arbitration costs against respondent
Arbitration costs required by the National Futures Association (NFA) are the responsibility of the claimant. A panel may assess reasonable and necessary expenses against a respondent if the panel finds the respondent engaged in willful acts of bad faith or presented a frivolous defense. Attorney fees may also be assessed in situations where this is legally permitted.Incorrect
Arbitration costs against respondent
Arbitration costs required by the National Futures Association (NFA) are the responsibility of the claimant. A panel may assess reasonable and necessary expenses against a respondent if the panel finds the respondent engaged in willful acts of bad faith or presented a frivolous defense. Attorney fees may also be assessed in situations where this is legally permitted. -
Question 3 of 10
3. Question
Which of the following statements is true regarding requirements of compliance director in investigation?
Correct
Requirements of compliance director in investigation
National Futures Association (NFA) Compliance Rule 2-9 requires that all members exercise an appropriate level of supervision over employees and agents. Necessary complaints must be submitted to the compliance director of the NFA Business Conduct Committee (BCC). According to Compliance Rule 3-2, in response to an investigation, the compliance director is required to issue a written report to the BCC that includes the following information:
• the reason for the initiation of the investigation
• a summary of the complaint, if a complaint was created
• the relevant facts of the investigation
• a recommendation for the BCC to proceed further (if applicable)Incorrect
Requirements of compliance director in investigation
National Futures Association (NFA) Compliance Rule 2-9 requires that all members exercise an appropriate level of supervision over employees and agents. Necessary complaints must be submitted to the compliance director of the NFA Business Conduct Committee (BCC). According to Compliance Rule 3-2, in response to an investigation, the compliance director is required to issue a written report to the BCC that includes the following information:
• the reason for the initiation of the investigation
• a summary of the complaint, if a complaint was created
• the relevant facts of the investigation
• a recommendation for the BCC to proceed further (if applicable) -
Question 4 of 10
4. Question
Regarding requirements of compliance director in investigation, which of the following information is untrue?
Correct
Requirements of compliance director in investigation
National Futures Association (NFA) Compliance Rule 2-9 requires that all members exercise an appropriate level of supervision over employees and agents. Necessary complaints must be submitted to the compliance director of the NFA Business Conduct Committee (BCC). According to Compliance Rule 3-2, in response to an investigation, the compliance director is required to issue a written report to the BCC that includes the following information:
• the reason for the initiation of the investigation
• a summary of the complaint, if a complaint was created
• the relevant facts of the investigation
• a recommendation for the BCC to proceed further (if applicable)Incorrect
Requirements of compliance director in investigation
National Futures Association (NFA) Compliance Rule 2-9 requires that all members exercise an appropriate level of supervision over employees and agents. Necessary complaints must be submitted to the compliance director of the NFA Business Conduct Committee (BCC). According to Compliance Rule 3-2, in response to an investigation, the compliance director is required to issue a written report to the BCC that includes the following information:
• the reason for the initiation of the investigation
• a summary of the complaint, if a complaint was created
• the relevant facts of the investigation
• a recommendation for the BCC to proceed further (if applicable) -
Question 5 of 10
5. Question
From the statements below regarding BCC actions, which one seems to be the most appropriate to you?
Correct
BCC actions
Once the compliance director issues a completed report to the Business Compliance Committee (BCC) of the National Futures Association (NFA) no later than four months from the date of the inception of the investigation, within 30 days of receiving the report from the compliance director, the BCC must decide between two courses of action:
• If there is no reasonable basis to assume a violation has occurred, the BCC must close the matter.
• If there is reason to believe that a violation has occurred, the BCC must issue a formal written and dated complaint.Incorrect
BCC actions
Once the compliance director issues a completed report to the Business Compliance Committee (BCC) of the National Futures Association (NFA) no later than four months from the date of the inception of the investigation, within 30 days of receiving the report from the compliance director, the BCC must decide between two courses of action:
• If there is no reasonable basis to assume a violation has occurred, the BCC must close the matter.
• If there is reason to believe that a violation has occurred, the BCC must issue a formal written and dated complaint. -
Question 6 of 10
6. Question
Which of the following statements is true regarding complaint information?
Correct
Complaint information
If, as the result of an investigation, the Business Conduct Committee (BCC) of the National Futures Association (NFA) finds that a rule has been violated and a written and dated complaint is warranted, a complaint issued by the BCC must include the following information:
• each NFA violation alleged to have occurred, or each NFA violation that, but for the complaint, would have occurred
• each act or omission which precipitated the violationIncorrect
Complaint information
If, as the result of an investigation, the Business Conduct Committee (BCC) of the National Futures Association (NFA) finds that a rule has been violated and a written and dated complaint is warranted, a complaint issued by the BCC must include the following information:
• each NFA violation alleged to have occurred, or each NFA violation that, but for the complaint, would have occurred
• each act or omission which precipitated the violation -
Question 7 of 10
7. Question
Regarding settlement proposal, which of the following statements is false?
Correct
Settlement proposal
National Futures Association (NFA) members subject to a formal complaint by the BCC are entitled to a hearing before a board comprised of members of the NFA Hearing Committee. If a respondent desires a settlement, a settlement may be submitted to the hearing panel at any time prior to the appointment of a hearing panel chairman.Incorrect
Settlement proposal
National Futures Association (NFA) members subject to a formal complaint by the BCC are entitled to a hearing before a board comprised of members of the NFA Hearing Committee. If a respondent desires a settlement, a settlement may be submitted to the hearing panel at any time prior to the appointment of a hearing panel chairman. -
Question 8 of 10
8. Question
From the statements below regarding appeal by respondent, which one seems to be the most appropriate to you?
Correct
Appeal by respondent
If the National Futures Association (NFA) arbitration hearing panel issues a decision against a respondent, a respondent may file a written notice of appeal with the National Futures Association (NFA) within 15 days of the date on which the hearing panel issued its decision. The respondent must describe the elements of the decision that are the subject of the appeal, and must outline any request to personally appear before the panel.Incorrect
Appeal by respondent
If the National Futures Association (NFA) arbitration hearing panel issues a decision against a respondent, a respondent may file a written notice of appeal with the National Futures Association (NFA) within 15 days of the date on which the hearing panel issued its decision. The respondent must describe the elements of the decision that are the subject of the appeal, and must outline any request to personally appear before the panel. -
Question 9 of 10
9. Question
From the statements below regarding MRA, which one seems to be appropriate to you?
Correct
MRA
A member responsibility action (MRA) is a summary action that may be taken by the president of the NFA in circumstances where an NFA member is deemed to pose a risk to the operations of the market, as well as to customers and other NFA members. With the agreement of the NFA’s Board of Directors or the Executive Committee of the NFA, the president may take whatever steps are necessary to avoid adverse impacts.Incorrect
MRA
A member responsibility action (MRA) is a summary action that may be taken by the president of the NFA in circumstances where an NFA member is deemed to pose a risk to the operations of the market, as well as to customers and other NFA members. With the agreement of the NFA’s Board of Directors or the Executive Committee of the NFA, the president may take whatever steps are necessary to avoid adverse impacts. -
Question 10 of 10
10. Question
Which of the following statements is not included in enforcement of CEA?
Correct
Enforcement of CEA
Enforcement of the Commodities Exchange Act (CEA) is the responsibility of the Division of Enforcement of the Commodity Futures Trading Commission (CFTC). The Division of Enforcement may take enforcement action against individuals in the following situations:
• violations of laws by individuals involved with futures trading on domestic exchanges
• improperly marketed futures products in furtherance of Ponzi schemes
• manipulative or deceptive schemes by individuals trading futures contracts
• usage of disruptive trading practicesIncorrect
Enforcement of CEA
Enforcement of the Commodities Exchange Act (CEA) is the responsibility of the Division of Enforcement of the Commodity Futures Trading Commission (CFTC). The Division of Enforcement may take enforcement action against individuals in the following situations:
• violations of laws by individuals involved with futures trading on domestic exchanges
• improperly marketed futures products in furtherance of Ponzi schemes
• manipulative or deceptive schemes by individuals trading futures contracts
• usage of disruptive trading practices