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Question 1 of 10
1. Question
What is the necessary condition required for new clients before the CTA places the first trade for the client?
Correct
According to NFA RULE 2-34, The written confirmation must be received or delivered to the customer for new customers before the CTA places the customer’s first trade.
Incorrect
According to NFA RULE 2-34, The written confirmation must be received or delivered to the customer for new customers before the CTA places the customer’s first trade.
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Question 2 of 10
2. Question
What is the necessary condition required for the existing clients before the CTA places the first trade for the client?
Correct
According to NFA RULE 2-34, For existing customers, the written confirmation must be received or delivered to the customer before any of the information required under Section (b)(1) of this rule is changed after the CTA places the first trade. The written confirmation must include the new information and the change’s effective date, but it must not contain any information that will remain the same.
Incorrect
According to NFA RULE 2-34, For existing customers, the written confirmation must be received or delivered to the customer before any of the information required under Section (b)(1) of this rule is changed after the CTA places the first trade. The written confirmation must include the new information and the change’s effective date, but it must not contain any information that will remain the same.
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Question 3 of 10
3. Question
From the following statements which come under the responsibility of an Associate Member of NFA:
I. Member shall establish and enforce adequate procedures to review all records
II. Each Member or Associate shall make or obtain a record
III. Member or Associate shall be entitled to rely on the customer
IV. Shall be required to verify customer informationCorrect
According to NFA RULE 2-36, the responsibility of an Associate Member of NFA includes:
(1)Member shall establish and enforce appropriate procedures for the evaluation of all records.
(2)Each Member or Associate shall make or obtain a record.
(3)Member or Associate shall be entitled to rely on the customer.
(4)Shall not be required to verify customer information.Incorrect
According to NFA RULE 2-36, the responsibility of an Associate Member of NFA includes:
(1)Member shall establish and enforce appropriate procedures for the evaluation of all records.
(2)Each Member or Associate shall make or obtain a record.
(3)Member or Associate shall be entitled to rely on the customer.
(4)Shall not be required to verify customer information. -
Question 4 of 10
4. Question
From the following statements, Associate of a Forex Dealer Member must not engage in any forex transaction shall:
I. Deceive any other person
II. Willfully make a false report
III. Tend to affect the price of any foreign currency
IV. Engage in the manipulation of the value of any foreign currency or forex tradeCorrect
According to NFA RULE 2-36, No Forex Dealer Member or Associate of a Forex Dealer Member engaging in any forex transaction shall: (1)Cheat, defraud or deceive any other person or threaten to cheat, defraud or deceive. (2)Willfully make a false report or cause a false record in or in connection with any forex transaction to be entered or caused. (3)Disseminate or cause misleading or false information that affects or tends to affect the price of any foreign currency. (4)Engage in the manipulation of the value of any foreign currency or forex trade. (5)Deliberately submit substantially false or misleading information regarding forex transactions to NFA or its agents. (6)Embezzle, steal or purloin or knowingly convert to any person in or in connection with a forex transaction any money, securities or other property received or accrued.
Incorrect
According to NFA RULE 2-36, No Forex Dealer Member or Associate of a Forex Dealer Member engaging in any forex transaction shall: (1)Cheat, defraud or deceive any other person or threaten to cheat, defraud or deceive. (2)Willfully make a false report or cause a false record in or in connection with any forex transaction to be entered or caused. (3)Disseminate or cause misleading or false information that affects or tends to affect the price of any foreign currency. (4)Engage in the manipulation of the value of any foreign currency or forex trade. (5)Deliberately submit substantially false or misleading information regarding forex transactions to NFA or its agents. (6)Embezzle, steal or purloin or knowingly convert to any person in or in connection with a forex transaction any money, securities or other property received or accrued.
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Question 5 of 10
5. Question
What are the basic equitable principles of trade of a Forex Dealer Members and their Associates shall observe?
Correct
According to NFA RULE 2-36, In the conduct of their forex company, Forex Dealer Members and their Employees shall follow high standards of commercial integrity and fair and fair trade principles.
Incorrect
According to NFA RULE 2-36, In the conduct of their forex company, Forex Dealer Members and their Employees shall follow high standards of commercial integrity and fair and fair trade principles.
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Question 6 of 10
6. Question
Which are the limitation(s) that allow a non-member to carry out a forex account?
Correct
According to NFA RULE 2-36, The limitations are: (1)A non-Member is a member of another futures group registered in compliance with Section 17 of the Act or is excluded by a Board resolution from this prohibition. (2)The suspended Member shall be removed from this prohibition by the Committee of Appeals.
Incorrect
According to NFA RULE 2-36, The limitations are: (1)A non-Member is a member of another futures group registered in compliance with Section 17 of the Act or is excluded by a Board resolution from this prohibition. (2)The suspended Member shall be removed from this prohibition by the Committee of Appeals.
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Question 7 of 10
7. Question
When a customer first opens an account which information should be provided by each Forex Dealer Member to the customer?
Correct
According to NFA RUE 2-36, When a customer first opens an account and at least once a year afterward, each Forex Dealer Member shall provide written information about the Background Affiliation Status Information Center (BASIC) of NFA, including the website address, to each customer.
Incorrect
According to NFA RUE 2-36, When a customer first opens an account and at least once a year afterward, each Forex Dealer Member shall provide written information about the Background Affiliation Status Information Center (BASIC) of NFA, including the website address, to each customer.
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Question 8 of 10
8. Question
Which of the following statement is true about timespan required for the review and approval of all promotional material:
I. At least 10 days prior to its first use or such shorter period as may be allowed by NFA.
II. At least 10-15 days prior to its first use or such shorter period as may be allowed by NFA.
III. At least 10 days after to its first use or such shorter period as may be allowed by NFA.
IV. At least 20 days prior to its first use or such shorter period as may be allowed by NFA.Correct
According to NFA RULE 2-36, The Department of Enforcement may require any Forex Dealer Member to file copies of all promotional material with NFA for review and approval at least 10 days prior to its first use or such shorter period as may be allowed by NFA.
Incorrect
According to NFA RULE 2-36, The Department of Enforcement may require any Forex Dealer Member to file copies of all promotional material with NFA for review and approval at least 10 days prior to its first use or such shorter period as may be allowed by NFA.
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Question 9 of 10
9. Question
From the following choices, what are the responsibilities of a CCO:
I. Prepares an annual report
II. Submits the annual report to the Forex Dealer Members Board of Directors
III. Does the documentation
IV. Submits the annual report to the Senior OfficerCorrect
According to NFA RUL 2-36, Each CCO must prepare an annual report that meets the requirements of CFTC Regulation 3.3(e) and must provide the annual report to the Forex Dealer Members Board of Directors or Senior Officer.
Incorrect
According to NFA RUL 2-36, Each CCO must prepare an annual report that meets the requirements of CFTC Regulation 3.3(e) and must provide the annual report to the Forex Dealer Members Board of Directors or Senior Officer.
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Question 10 of 10
10. Question
From the following, what timespan is allocated to a Forex Dealer to submit the annual report to the NFA:
I. Within 50 days of the end of the fiscal year of the Forex Dealer Representative
II. Within 90 days of the end of the fiscal year of the Forex Dealer Representative
III. Within 80 days of the end of the fiscal year of the Forex Dealer Representative
IV. Within 70 days of the end of the fiscal year of the Forex Dealer RepresentativeCorrect
According to NFA RULE 2-36, Every representative of the Forex Dealer shall submit the annual report to the NFA within 90 days of the end of the fiscal year of the Forex Dealer Representative. The annual report must include a certificate from the CCO or Chief Executive Officer of the Forex Dealer Member that the information contained in the annual report is accurate and complete to the best of his or her knowledge and reasonable belief and under penalty of law.
Incorrect
According to NFA RULE 2-36, Every representative of the Forex Dealer shall submit the annual report to the NFA within 90 days of the end of the fiscal year of the Forex Dealer Representative. The annual report must include a certificate from the CCO or Chief Executive Officer of the Forex Dealer Member that the information contained in the annual report is accurate and complete to the best of his or her knowledge and reasonable belief and under penalty of law.