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Question 1 of 10
1. Question
From the following options what comes under the term “Futures”?
I. Option contracts
II. Foreign futures and foreign options
III. Actual Funds
IV. Security futures productsCorrect
According to NFA RULE, 1-1 "Futures" includes: (1)Contract futures and options traded on the contract market (2)Option contracts granted by a person who has registered as a grantor of such option contracts with the Commission under Section 4c(d) of the Act or notified the Commission under the rules that he is eligible to grant such option contracts. (3)Foreign futures and foreign options made or subject to the rules of the Foreign Trade Board for or on behalf of customers of foreign futures or foreign options as specified in the rules of the Commission. (4)Leverage transactions as defined in the rules of the Commission. (5)Security futures goods as specified in paragraph 1a(45) of the Act.
Incorrect
According to NFA RULE, 1-1 "Futures" includes: (1)Contract futures and options traded on the contract market (2)Option contracts granted by a person who has registered as a grantor of such option contracts with the Commission under Section 4c(d) of the Act or notified the Commission under the rules that he is eligible to grant such option contracts. (3)Foreign futures and foreign options made or subject to the rules of the Foreign Trade Board for or on behalf of customers of foreign futures or foreign options as specified in the rules of the Commission. (4)Leverage transactions as defined in the rules of the Commission. (5)Security futures goods as specified in paragraph 1a(45) of the Act.
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Question 2 of 10
2. Question
During the period of the sanction, no Associate shall allow any individual to establish any association with him or to carry out any operation with his or her commodity interests unless approved by the following committee:
I. Committee on Business Conduct
II. Committee on Hearing Committee
III. Committee on the Appeals Committee
IV. Committee on Security ConductCorrect
According to RULE 2-26, No FCM, IB, CPO or CTA Member, FDM or Associate shall allow any individual to establish any association with him or to carry out any operation with, on behalf of or in connection with his or her commodity interests, irrespective of whether such affiliation or activity needs registration or NFA membership during the period of the sanction, unless approved by the Committee on Business Conduct, Hearing Committee or the Appeals Committee.
Incorrect
According to RULE 2-26, No FCM, IB, CPO or CTA Member, FDM or Associate shall allow any individual to establish any association with him or to carry out any operation with, on behalf of or in connection with his or her commodity interests, irrespective of whether such affiliation or activity needs registration or NFA membership during the period of the sanction, unless approved by the Committee on Business Conduct, Hearing Committee or the Appeals Committee.
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Question 3 of 10
3. Question
Which members are required by the Board of Directors of NFA?
Correct
According to NFA RULE 2-9, The Board of Directors of NFA may require FCM, IB, CPO and CTA members to adopt enhanced supervisory requirements specified by the Board on the employment history of their APs or directors or the total commissions, fees and other fees paid by their customers.
Incorrect
According to NFA RULE 2-9, The Board of Directors of NFA may require FCM, IB, CPO and CTA members to adopt enhanced supervisory requirements specified by the Board on the employment history of their APs or directors or the total commissions, fees and other fees paid by their customers.
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Question 4 of 10
4. Question
What are the necessary documents that are required to be submitted to the concerned person/party if an associate is seeking such a waiver?
Correct
According to NFA RULE 2-9, Any FCM, IB, CPO or CTA Member seeking such a waiver may submit a written request to a panel of three members of the Business Conduct Committee and/or the Hearing Committee, said members to be appointed from time to time by the Board. The Compliance Department must send a written response to the committee within 30 days of an FCM, IB, CPO or CTA Member filing a waiver request.
Incorrect
According to NFA RULE 2-9, Any FCM, IB, CPO or CTA Member seeking such a waiver may submit a written request to a panel of three members of the Business Conduct Committee and/or the Hearing Committee, said members to be appointed from time to time by the Board. The Compliance Department must send a written response to the committee within 30 days of an FCM, IB, CPO or CTA Member filing a waiver request.
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Question 5 of 10
5. Question
What is the necessary program that must be written, approved and implemented by each member of the FCM?
Correct
According to NFA RULE 2-9, Each member of the FCM and the IB shall develop and implement a written anti-money laundering program approved in writing by senior management reasonably designed to fulfill and monitor the compliance of the member with the applicable requirements of the Bank Secrecy Act (31 U.S.C. 5311, et seq.), and the implementing regulations enacted by the Treasury Department.
Incorrect
According to NFA RULE 2-9, Each member of the FCM and the IB shall develop and implement a written anti-money laundering program approved in writing by senior management reasonably designed to fulfill and monitor the compliance of the member with the applicable requirements of the Bank Secrecy Act (31 U.S.C. 5311, et seq.), and the implementing regulations enacted by the Treasury Department.
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Question 6 of 10
6. Question
Which of the following specifications must be included in an anti-money laundering program:
I. Establish and implement policies, procedures, and internal controls
II. Provide for independent testing for compliance
III. Don’t provide ongoing training for appropriate personnel
IV. Include appropriate risk-based proceduresCorrect
According to NFA RULE 2-9, anti-money laundering program includes: (1)Establish and implement policies, procedures and internal controls that are reasonably intended to prevent the financial institution from being used for money laundering or terrorist activity financing and to comply with the applicable provisions of the Bank Secrecy Act and its implementing regulations. (2)Provide for independent testing for compliance to be conducted by Member personnel or by a qualified outside party. (3)Identify a person or group responsible for the implementation and monitoring of the program's day-to-day activities and internal controls. (4)Provide ongoing training for appropriate workers. (5)Include appropriate risk-based protocols for the ongoing diligence of the customer.
Incorrect
According to NFA RULE 2-9, anti-money laundering program includes: (1)Establish and implement policies, procedures and internal controls that are reasonably intended to prevent the financial institution from being used for money laundering or terrorist activity financing and to comply with the applicable provisions of the Bank Secrecy Act and its implementing regulations. (2)Provide for independent testing for compliance to be conducted by Member personnel or by a qualified outside party. (3)Identify a person or group responsible for the implementation and monitoring of the program's day-to-day activities and internal controls. (4)Provide ongoing training for appropriate workers. (5)Include appropriate risk-based protocols for the ongoing diligence of the customer.
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Question 7 of 10
7. Question
Which of the following responsibilities comes under a Member subject to minimum capital requirements:
I. Prepare financial reports
II. Maintain a general ledger
III. Doesn’t provide English translations of other foreign-language documents
IV. File documentsCorrect
According to NFA RULE 2-10, Each Member subject to minimum capital requirements must:
(1)Prepare financial reports needed to be sent in English to the CFTC and/or NFA using U.S. dollars and U.S. accounting standards.
(2)Using U.S. dollars to manage a general ledger in English.Incorrect
According to NFA RULE 2-10, Each Member subject to minimum capital requirements must:
(1)Prepare financial reports needed to be sent in English to the CFTC and/or NFA using U.S. dollars and U.S. accounting standards.
(2)Using U.S. dollars to manage a general ledger in English. -
Question 8 of 10
8. Question
Which of the following requirements are needed from each CPO, CTA, FCM, FDM, IB, MSP and SD Member to be fulfilled:
I.Requests for extensions
II.Don’t maintain English translations of all foreign-language promotional material
III.Maintain written procedures required by CFTC or NFA rules
IV.File reportsCorrect
According to NFA RULE 2-10, each CPO, CTA, FCM, FDM, IB, MSP and SD Member must: (1)File statements, extension requests and other documents required to be sent in English to the CFTC and/or NFA. (2)Maintain English translations of all promotional material in foreign languages, including disclosure documents and websites, distributed or intended for viewing by customers in the United States, their territories or possessions. (3)Maintain written procedures required by the rules of the CFTC or the NFA in English (as well as in any other language if necessary for the Member's staff and agents to understand). (4)Provide, as requested by NFA, English translations of other foreign language reports and records and file financial information in US dollars. (5)Make available to the NFA (during the examination or in response to other inquiries) an individual who is authorized to act on behalf of the Member is fluent in English and is familiar with the affairs of the Member and financial matters.
Incorrect
According to NFA RULE 2-10, each CPO, CTA, FCM, FDM, IB, MSP and SD Member must: (1)File statements, extension requests and other documents required to be sent in English to the CFTC and/or NFA. (2)Maintain English translations of all promotional material in foreign languages, including disclosure documents and websites, distributed or intended for viewing by customers in the United States, their territories or possessions. (3)Maintain written procedures required by the rules of the CFTC or the NFA in English (as well as in any other language if necessary for the Member's staff and agents to understand). (4)Provide, as requested by NFA, English translations of other foreign language reports and records and file financial information in US dollars. (5)Make available to the NFA (during the examination or in response to other inquiries) an individual who is authorized to act on behalf of the Member is fluent in English and is familiar with the affairs of the Member and financial matters.
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Question 9 of 10
9. Question
Which of the following statements are correct according to the calculations/steps involved by the Member CTAs:
I. Member CTAs must calculate the rate of return using nominal account size as the denominator
II. Draw-down information
III. In calculating net performance, Member CTAs may include interest earned on actual funds but may not impute interest on other funds
IV. In calculating net performance, Member CTAs may include interest earned on actual funds but may impute interest on other fundsCorrect
According to NFA RULE 2-34: (1)Member CTAs shall measure the return rate in compliance with CFTC Regulation 4.35(a)(6) using the denominator of the nominal account size. (2)Draw-down data published in compliance with CFTC Regulation 4.35(a)(1)(v) and (vi) must be based on the rate of return estimates using the denominator of marginal account size. (3)Member CTAs may include interest earned on actual funds when measuring net performance but may not impute interest on other funds.
Incorrect
According to NFA RULE 2-34: (1)Member CTAs shall measure the return rate in compliance with CFTC Regulation 4.35(a)(6) using the denominator of the nominal account size. (2)Draw-down data published in compliance with CFTC Regulation 4.35(a)(1)(v) and (vi) must be based on the rate of return estimates using the denominator of marginal account size. (3)Member CTAs may include interest earned on actual funds when measuring net performance but may not impute interest on other funds.
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Question 10 of 10
10. Question
For partially-funded accounts, written confirmation shall contain the following information:
I. The name of the trading program
II. The nominal account size only agreed by the CTA
III. The nominal account size agreed to by the client and the CTA.
IV. The description of the trading programCorrect
According to NFA RULE 2-34, for partially-funded accounts, a Member CTA must either receive from a client or deliver to a client a written confirmation that contains the following information:
(1)The name or description of the trading program
(2)The nominal account size agreed to by the client and the CTA.Incorrect
According to NFA RULE 2-34, for partially-funded accounts, a Member CTA must either receive from a client or deliver to a client a written confirmation that contains the following information:
(1)The name or description of the trading program
(2)The nominal account size agreed to by the client and the CTA.