FINRA Series 31 - Quiz 8 - Pauline.new
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Question 1 of 10
1. Question
Which of the following accounts shall members and associates of NFA be subject to such detailed requirements?
Correct
In the Compliance Rule 2-9, under the Supervisory Procedure for Branch Offices and Guaranteed IBs, discretionary accounts are mentioned. In this account, members and associates of NFA are subject to such full requirements about the customer’s discretionary accounts. If a branch office or IBs handles such a discretionary account, the member firm shall provide policies and procedures to ensure that the compliance with the said requirements are achieved. Such member firms shall also make sure that all APs are exercising discretionary authority and are registered for at least two years, consecutively.
Incorrect
In the Compliance Rule 2-9, under the Supervisory Procedure for Branch Offices and Guaranteed IBs, discretionary accounts are mentioned. In this account, members and associates of NFA are subject to such full requirements about the customer’s discretionary accounts. If a branch office or IBs handles such a discretionary account, the member firm shall provide policies and procedures to ensure that the compliance with the said requirements are achieved. Such member firms shall also make sure that all APs are exercising discretionary authority and are registered for at least two years, consecutively.
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Question 2 of 10
2. Question
Under the Compliance Rule 2-9, how many days when a Compliance Department shall submit a written response to the panel?
Correct
Under the Compliance Rule 2-9, the board of directors of NFA requires FCM, IB, CPO, and CTA members that meet the specific criteria regarding the history of employment of the APs and principals, or fees that are paid by the clients or customers to adopt supervisory requirements that is provided by the Board. The said requirement may be waived after showing that the present supervisory procedures of the member provides an effective supervision for its employees and agents. It is also mentioned that the Compliance Department shall submit a written response to the panel within 30 days after an FCM, IB, CPO, or CTA member submits a waiver request and the panel’s decision shall be final.
Incorrect
Under the Compliance Rule 2-9, the board of directors of NFA requires FCM, IB, CPO, and CTA members that meet the specific criteria regarding the history of employment of the APs and principals, or fees that are paid by the clients or customers to adopt supervisory requirements that is provided by the Board. The said requirement may be waived after showing that the present supervisory procedures of the member provides an effective supervision for its employees and agents. It is also mentioned that the Compliance Department shall submit a written response to the panel within 30 days after an FCM, IB, CPO, or CTA member submits a waiver request and the panel’s decision shall be final.
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Question 3 of 10
3. Question
Under the information regarding the eligibility requirements of FINRA, how many individuals are included in the hearing panels?
Correct
Under the eligibility requirements of FINRA, such eligibility proceedings hearings are held in Washington DC. The hearing has a hearing panel that is composed of two individuals; it can be either industry or non-industry representatives. The person who is disqualified and the applicant member firm are represented by an attorney and they must submit any evidence that is relevant. At the hearing, a staff attorney must represent a member regulation. It is also stated that a member who is disqualified is entitled to have proper representatives to attend the hearing.
Incorrect
Under the eligibility requirements of FINRA, such eligibility proceedings hearings are held in Washington DC. The hearing has a hearing panel that is composed of two individuals; it can be either industry or non-industry representatives. The person who is disqualified and the applicant member firm are represented by an attorney and they must submit any evidence that is relevant. At the hearing, a staff attorney must represent a member regulation. It is also stated that a member who is disqualified is entitled to have proper representatives to attend the hearing.
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Question 4 of 10
4. Question
Under the Registration Requirements of FINRA, how many is the minimum number of registered principals that a member must have in persons seeking admission as members or existing members?
Correct
Under the FINRA’s Registration Requirement, the minimum number of registered principals is mentioned. It says that each member, but an exemption if he or she has only one AP, shall have at least two partners that are registered as General Securities Principals, provided that an individual is limited in the scope of its activities may have two officers. It is stated that a member’s requirements, they may have a minimum of two principals and it only applies to such individuals that are seeking for admission as existing members and members.
Incorrect
Under the FINRA’s Registration Requirement, the minimum number of registered principals is mentioned. It says that each member, but an exemption if he or she has only one AP, shall have at least two partners that are registered as General Securities Principals, provided that an individual is limited in the scope of its activities may have two officers. It is stated that a member’s requirements, they may have a minimum of two principals and it only applies to such individuals that are seeking for admission as existing members and members.
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Question 5 of 10
5. Question
Which of the following markets is extremely volatile?
Correct
Under where the firms’ retail foreign currency exchange activities are addressed by FINRA, there are several markets that were mentioned. One of the markets is the currency market where it was stated that this is the extremely volatile or unstable market and that the customers of the retail forex are exposed to significant currency risk in this market but some currencies are more unstable than others. It is stated that higher leverage ratios magnify the minor fluctuations in the rate of currency that shows the increase of the losses and gains of the customers.
Incorrect
Under where the firms’ retail foreign currency exchange activities are addressed by FINRA, there are several markets that were mentioned. One of the markets is the currency market where it was stated that this is the extremely volatile or unstable market and that the customers of the retail forex are exposed to significant currency risk in this market but some currencies are more unstable than others. It is stated that higher leverage ratios magnify the minor fluctuations in the rate of currency that shows the increase of the losses and gains of the customers.
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Question 6 of 10
6. Question
Which of the following is true about the Required Investor Arbitration?
I. The arbitration’s agreement is given electronically
II. The dispute is not within the member of FINRA
III. The arbitration is required by written agreement
IV. Such dispute involves the securities business of a firmCorrect
There is a required investor arbitration, where it shows that an investor must arbitrate at FINRA. There is information that an individual must know, it is mentioned that the arbitration shall be in the form of a written agreement. It is stated that the dispute shall be with a member of FINRA, it could be either be a broker or a brokerage firm. Under this required investor arbitration, such disputes are involved in a security business of the broker or its brokerage firm.
Incorrect
There is a required investor arbitration, where it shows that an investor must arbitrate at FINRA. There is information that an individual must know, it is mentioned that the arbitration shall be in the form of a written agreement. It is stated that the dispute shall be with a member of FINRA, it could be either be a broker or a brokerage firm. Under this required investor arbitration, such disputes are involved in a security business of the broker or its brokerage firm.
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Question 7 of 10
7. Question
Which of the following is true about the Required Industry Arbitration?
I. The disputes arise out of the securities business activities of a broker or a brokerage firm
II. If an investor requests arbitration, a broker or brokerage firm must arbitrate at FINRA
III. This arbitration requires a written agreement
IV. The dispute is in between or among the members of FINRACorrect
Under the Required Industry Arbitration, a brokerage firm or a broker must settle at FINRA if an argument arises out of such security business activities of a firm or broker. They must also arbitrate at FINRA if the argument is among the members of FINRA, such as the brokers and brokerage firms. However, there are exemptions in the required industry arbitration, if an individual is a broker and his or her argument is regarding an issue of discrimination of employees, this dispute is not required to be arbitrated unless such parties agrees to settle such argument, it can either be before or after the problem arose.
Incorrect
Under the Required Industry Arbitration, a brokerage firm or a broker must settle at FINRA if an argument arises out of such security business activities of a firm or broker. They must also arbitrate at FINRA if the argument is among the members of FINRA, such as the brokers and brokerage firms. However, there are exemptions in the required industry arbitration, if an individual is a broker and his or her argument is regarding an issue of discrimination of employees, this dispute is not required to be arbitrated unless such parties agrees to settle such argument, it can either be before or after the problem arose.
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Question 8 of 10
8. Question
Which of the following are true about such Eligible Arbitration Cases?
I. From the time the events giving rise to such dispute, claims are filed within 5 years
II. Such disputes involve an investor and an entity registered in FINRA
III. For disputes of investors, the claim is filed within 6 years from the time the events giving rise to the dispute occurred
IV. Such arbitration cases are heard in FINRA’s forum and there is a criterion that an individual must knowCorrect
There are Eligible Arbitration Cases, such cases are qualified to be heard in a forum of FINRA if such criteria are met. There are two categories in the criteria which is regarding the disputes with investors and the disputes that involve only industry parties. Under the disputes with investors, if a case involves an individual or investor and an entity registered in FINRA, it can be between investors and brokers, or investor and brokerage firms, and/or with brokers and brokerage firms and investors. When it comes to disputes that only industry parties are involved such cases can be between a brokerage firm, between such brokers, or it can be also between a brokerage firm and brokers. For both categories, it is mentioned that the claims are filed within 6 years from the time the events gave rise when the argument happened.
Incorrect
There are Eligible Arbitration Cases, such cases are qualified to be heard in a forum of FINRA if such criteria are met. There are two categories in the criteria which is regarding the disputes with investors and the disputes that involve only industry parties. Under the disputes with investors, if a case involves an individual or investor and an entity registered in FINRA, it can be between investors and brokers, or investor and brokerage firms, and/or with brokers and brokerage firms and investors. When it comes to disputes that only industry parties are involved such cases can be between a brokerage firm, between such brokers, or it can be also between a brokerage firm and brokers. For both categories, it is mentioned that the claims are filed within 6 years from the time the events gave rise when the argument happened.
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Question 9 of 10
9. Question
Which of the following information must be included in an award?
I. The age of the arbitrators
II. An acknowledgment by the arbitrators that they have each read the pleadings and other materials filed by the parties
III. Damages and other relief requested
IV. The signatures of the arbitratorsCorrect
Awards must be in the form of writing, but the arbitrators are not required to share their opinions or provide explanations for their decision. Majority of the arbitrators must sign the awards. Aside from the information mentioned, there are other information that must be in an award, this includes the name of the parties and if any, the representative of the such parties and arbitrators, the summary of such issues, damages and other relief awarded, a statement that has regarding other issues that are resolved, allocation of fees that are given by the panel, and lastly, the date, number, and location of hearing sessions.
Incorrect
Awards must be in the form of writing, but the arbitrators are not required to share their opinions or provide explanations for their decision. Majority of the arbitrators must sign the awards. Aside from the information mentioned, there are other information that must be in an award, this includes the name of the parties and if any, the representative of the such parties and arbitrators, the summary of such issues, damages and other relief awarded, a statement that has regarding other issues that are resolved, allocation of fees that are given by the panel, and lastly, the date, number, and location of hearing sessions.
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Question 10 of 10
10. Question
Which of the following laws permits a district court to vacate or overturn an arbitration award?
I. The arbitrators were guilty of misconduct in refusing to postpone the hearing, even in light of sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of any party have been prejudiced
II. There was evident partiality or corruption in the arbitrators
III. There is a reasonable basis for such award
IV. The award was not procured by corruptionCorrect
Under the challenges to an arbitration award, there is no appeals process in which a party is challenged by an award in FINRA. Basically, FINRA does not hear appeals regarding arbitration awards. The law may authorize a district court to divest an arbitration award if it shows that such award was obtained by exploitation, scheme, and unnecessary means., there was corruption in the arbitrators, the arbitrators did not recognize an evidently distinct law and lastly, there is no factual or rational basis for such award.
Incorrect
Under the challenges to an arbitration award, there is no appeals process in which a party is challenged by an award in FINRA. Basically, FINRA does not hear appeals regarding arbitration awards. The law may authorize a district court to divest an arbitration award if it shows that such award was obtained by exploitation, scheme, and unnecessary means., there was corruption in the arbitrators, the arbitrators did not recognize an evidently distinct law and lastly, there is no factual or rational basis for such award.