FINRA Series 31 - Quiz 13 - Pauline.new
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Question 1 of 10
1. Question
Which of the following is a criterion in the statements of opinion included in promotional material of an FCM, IB, CPO, or CTA Member under NFA Compliance Rule 2-29?
Correct
Under the NFA Compliance Rule 2-29, the statements of opinion included in promotional material of an FCM, IB, CPO, or CTA must be met the following criteria: (1) it must be clearly identifiable as such, and (2) it must have a reasonable basis in fact. The nature of the opinion is the basis of the extent of the support. Certain opinions by their nature may not be susceptible to ironclad documentation, however, members should always be able to demonstrate at least a reasonable basis for their claims.
Incorrect
Under the NFA Compliance Rule 2-29, the statements of opinion included in promotional material of an FCM, IB, CPO, or CTA must be met the following criteria: (1) it must be clearly identifiable as such, and (2) it must have a reasonable basis in fact. The nature of the opinion is the basis of the extent of the support. Certain opinions by their nature may not be susceptible to ironclad documentation, however, members should always be able to demonstrate at least a reasonable basis for their claims.
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Question 2 of 10
2. Question
What may be required by the Compliance Director to any member for any FCM, IB, CPO, and CTA specified under NFA Compliance Rule 2-29?
Correct
Under the filing with NFA in Compliance Rule 2-29, the Compliance Director may require any member for any FCM, IB, CPO, and CTA specified period to file copies of all promotional material with NFA promptly after its first use. No member shall directly benefit from any promotional material that uses audio or video content to make recommendations or describe the profit’s extent from the past and can be achieved in the future.
Incorrect
Under the filing with NFA in Compliance Rule 2-29, the Compliance Director may require any member for any FCM, IB, CPO, and CTA specified period to file copies of all promotional material with NFA promptly after its first use. No member shall directly benefit from any promotional material that uses audio or video content to make recommendations or describe the profit’s extent from the past and can be achieved in the future.
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Question 3 of 10
3. Question
When shall the member preserve the authorization records for negotiable instruments drawn from a customer’s account?
Correct
Stated in the authorization records for negotiable instruments drawn from a customer’s account that there are no members or a member with associated person shall submit a check for payment or negotiable paper has drawn on checking, savings, or share of a customer without the written authorization of the person. The authorization shall be preserved by the member for a period of three years following the expiration date of the authorization. This provision also states that it does not require the members to preserve the signed copies of customers regarding the negotiable instruments.
Incorrect
Stated in the authorization records for negotiable instruments drawn from a customer’s account that there are no members or a member with associated person shall submit a check for payment or negotiable paper has drawn on checking, savings, or share of a customer without the written authorization of the person. The authorization shall be preserved by the member for a period of three years following the expiration date of the authorization. This provision also states that it does not require the members to preserve the signed copies of customers regarding the negotiable instruments.
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Question 4 of 10
4. Question
Which of the following states that members receive specific account designations or customer names from such investment advisers by noon of the next business day following the trading session?
Correct
Allocations of orders made by the investment advisers state that the members may accept such orders from the investment advisers. It is also said that such investment advisers are allowed to make such allocations on their customer’s orders on whose the investment advisers’ behalf that submitted the orders, provided that such members received account designations specifically or the names of the customers from investment advisers by noon of the next business day following the session regarding trading.
Incorrect
Allocations of orders made by the investment advisers state that the members may accept such orders from the investment advisers. It is also said that such investment advisers are allowed to make such allocations on their customer’s orders on whose the investment advisers’ behalf that submitted the orders, provided that such members received account designations specifically or the names of the customers from investment advisers by noon of the next business day following the session regarding trading.
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Question 5 of 10
5. Question
When shall each member review and update its contact information?
Correct
Stated in the member filing and contact information requirements, that the members shall update and review the given contact information. It is said that each member shall update the following required contact information punctually but not later than 30 days and if there are changes in the given information. Lastly, within 17 business days after the end of each calendar year, the members shall also review and update such required contact information.
Incorrect
Stated in the member filing and contact information requirements, that the members shall update and review the given contact information. It is said that each member shall update the following required contact information punctually but not later than 30 days and if there are changes in the given information. Lastly, within 17 business days after the end of each calendar year, the members shall also review and update such required contact information.
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Question 6 of 10
6. Question
When shall a member notify FINRA under the notification to FINRA in connection with the JOBS Act?
Correct
Under the notification to FINRA in connection with the JOBS Act, there are the following manners that are prescribed by FINRA. First, the member shall notify FINRA, for the first time, prior to engaging in such transactions regarding the offer or sale of such securities under the Securities Act. Lastly, the member shall also notify FINRA within 30 days, either directly or indirectly controlling, and as well a funding portal that is defined under the SEC Regulation Crowdfunding.
Incorrect
Under the notification to FINRA in connection with the JOBS Act, there are the following manners that are prescribed by FINRA. First, the member shall notify FINRA, for the first time, prior to engaging in such transactions regarding the offer or sale of such securities under the Securities Act. Lastly, the member shall also notify FINRA within 30 days, either directly or indirectly controlling, and as well a funding portal that is defined under the SEC Regulation Crowdfunding.
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Question 7 of 10
7. Question
Who shall deliver a disclosure document to a prospective pool participant prior to or when it delivers the pool subscription agreement to the participant?
Correct
Under the CPO/CTA disclosure documents, it is stated that the Commodity Pool Operators (CPO) are the ones in-charge in delivering the disclosure document to a prospective pool participant before or when such pool subscription agreement has been delivered to such participant. Additional information, this shall not apply when the participant is another pool operated by the CPO of the offered pool or that is controlled by a CPO.
Incorrect
Under the CPO/CTA disclosure documents, it is stated that the Commodity Pool Operators (CPO) are the ones in-charge in delivering the disclosure document to a prospective pool participant before or when such pool subscription agreement has been delivered to such participant. Additional information, this shall not apply when the participant is another pool operated by the CPO of the offered pool or that is controlled by a CPO.
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Question 8 of 10
8. Question
Under the CPO/CTA disclosure documents, who must obtain from prospective clients and pool participants an acknowledgment signed and dated by the client?
Correct
Under the CTA/CPO disclosure document, it is stated that both the Commodity Pool Operators and Commodity Trading Advisors must obtain an acknowledgment signed and dated by the client from the prospective clients and pool participants, and such participants stated that they have received a disclosure document. An electronic signature may be accepted by the Commodity Trading Advisor or the Commodity Pool Operator when the disclosure document has been delivered by electronic means.
Incorrect
Under the CTA/CPO disclosure document, it is stated that both the Commodity Pool Operators and Commodity Trading Advisors must obtain an acknowledgment signed and dated by the client from the prospective clients and pool participants, and such participants stated that they have received a disclosure document. An electronic signature may be accepted by the Commodity Trading Advisor or the Commodity Pool Operator when the disclosure document has been delivered by electronic means.
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Question 9 of 10
9. Question
Which of the following is a part of the disclosure document of CTAs that states that this commission has not passed upon the merits of participating in this trading program?
Correct
There is several information that must be included in the disclosure document of the Commodity Trading Advisors, one of which is the part of the cover page. Stated on the cover page of such a document is the cautionary statement. It is stated on the cover page that such commodity futures trading commission has not passed with regards to the merits of participating in such a trading program nor has passed
Incorrect
There is several information that must be included in the disclosure document of the Commodity Trading Advisors, one of which is the part of the cover page. Stated on the cover page of such a document is the cautionary statement. It is stated on the cover page that such commodity futures trading commission has not passed with regards to the merits of participating in such a trading program nor has passed
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Question 10 of 10
10. Question
When shall the document be disclosing the business background of the CTA and any principal of the CTA who will participate in making trading or operational decisions?
Correct
Under the information mentioned in the disclosure document of the Commodity Trading Advisors, one of which is the business background. It is stated in the business background that this document shall disclose such background of the business of the Commodity Trading Advisor and any of its principal that participated in trading or operational decisions, or who have supervised a person for the five years preceding the date of such document. Among the principals, the officers and directors are included, and their business backgrounds are also required.
Incorrect
Under the information mentioned in the disclosure document of the Commodity Trading Advisors, one of which is the business background. It is stated in the business background that this document shall disclose such background of the business of the Commodity Trading Advisor and any of its principal that participated in trading or operational decisions, or who have supervised a person for the five years preceding the date of such document. Among the principals, the officers and directors are included, and their business backgrounds are also required.