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Question 1 of 10
1. Question
Which of the following statements are correct regarding the ongoing training of the supervisors’ responsibilities?
I. The formality of training depends on the investing activities of the business rather than its financing activities.
II. It is the obligation of the member to ensure that the training is properly performed by the employees.
III. It is the obligation of the member to ensure that the employees receive adequate training to abide by industry rules and obligations to handly accounts properly.
IV. The formality of training depends on the financing activities of the business rather than its operating activities.Correct
Under the ongoing training as stated by the National Futures Organization, a member has a supervisory responsibility in assessing the training of the duties. The employees are responsible for the proper training of their duties and the member must ensure that this obligation has been done by the specified persons. Its procedures must be in place to ensure that employees do always receive adequate training. This shall be abiding by industry rules and obligations in properly handling the customer accounts. The basis of the formality of the training is the size of the firm and the nature of its business.
Incorrect
Under the ongoing training as stated by the National Futures Organization, a member has a supervisory responsibility in assessing the training of the duties. The employees are responsible for the proper training of their duties and the member must ensure that this obligation has been done by the specified persons. Its procedures must be in place to ensure that employees do always receive adequate training. This shall be abiding by industry rules and obligations in properly handling the customer accounts. The basis of the formality of the training is the size of the firm and the nature of its business.
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Question 2 of 10
2. Question
What should a cybersecurity ISSP contain under the ISSP development, review, and training program by the National Futures Association?
I. A description of the member’s ongoing education and training related to information systems security for all appropriate personnel.
II. A developed written procedures for the on-site review process including detailed steps to be followed during the visit.
III. A description of the safeguards against identified system threats and vulnerabilities is included in the cybersecurity ISSP.
IV. A process in evaluating the nature of a detected security event and take appropriate measures to contain and mitigate the breach.Correct
A security risk analysis, a safeguards’ description against identified system threats and vulnerabilities, and evaluation process of the nature of detected security even, and an ongoing education description of the members shall be indicated in the cybersecurity ISSP for its development, review, and training. The process used for evaluation shall understand its potential impact and take appropriate measures to contain and mitigate the breach. The training related to information systems security for all appropriate personnel shall also be included.
Incorrect
A security risk analysis, a safeguards’ description against identified system threats and vulnerabilities, and evaluation process of the nature of detected security even, and an ongoing education description of the members shall be indicated in the cybersecurity ISSP for its development, review, and training. The process used for evaluation shall understand its potential impact and take appropriate measures to contain and mitigate the breach. The training related to information systems security for all appropriate personnel shall also be included.
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Question 3 of 10
3. Question
Under the on-site inspections in addition to day-to-day supervisory procedures, which of the following is the general matter of National Futures Association?
Correct
National Futures Association expects guaranteed IBs and branch offices to be inspected annually as a general matter. Adequate supervision must include periodic on-site inspections in addition to day-to-day supervisory procedures. A written procedure must be developed by members for the on-site review process. This shall include detailed steps to be followed during the visit. In a supervisory procedure, it shall address the number of visits to be made to a branch office or guaranteed IB. With the branch office managers or guaranteed IB’s, a written report should additionally be prepared.
Incorrect
National Futures Association expects guaranteed IBs and branch offices to be inspected annually as a general matter. Adequate supervision must include periodic on-site inspections in addition to day-to-day supervisory procedures. A written procedure must be developed by members for the on-site review process. This shall include detailed steps to be followed during the visit. In a supervisory procedure, it shall address the number of visits to be made to a branch office or guaranteed IB. With the branch office managers or guaranteed IB’s, a written report should additionally be prepared.
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Question 4 of 10
4. Question
Which of the following shall be included in the due diligence review as checking for guaranteed IBs?
Correct
The Futures Commission Merchant guarantor must do a due diligence inquiry before entering into a guarantee agreement. A check to ensure that the IB is properly registered shall be included in a due diligence review. It shall also contain inquiries concerning the disciplinary history of the IB and the disciplinary and employment history of the principals of the IB and its associated persons. This is helpful in determining the types of difficulties of a prospective guarantor. The registration and disciplinary information are both readily available from NFA through BASIC.
Incorrect
The Futures Commission Merchant guarantor must do a due diligence inquiry before entering into a guarantee agreement. A check to ensure that the IB is properly registered shall be included in a due diligence review. It shall also contain inquiries concerning the disciplinary history of the IB and the disciplinary and employment history of the principals of the IB and its associated persons. This is helpful in determining the types of difficulties of a prospective guarantor. The registration and disciplinary information are both readily available from NFA through BASIC.
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Question 5 of 10
5. Question
How shall the screening procedures for prospective employees happen under an adequate program for supervision?
Correct
The adequate program for supervision must include a thorough screening procedure to ensure that the prospective employees are qualified. It also determines the extent of the required supervision. To support any “yes” answers on the Form 8-R, the appropriate documentation should be obtained and reviewed for potential information disqualification. The applicants who submitted information regarding the registration should be obtained from the National Futures Association. This information is treated as non-public information and is available only to prospective employers.
Incorrect
The adequate program for supervision must include a thorough screening procedure to ensure that the prospective employees are qualified. It also determines the extent of the required supervision. To support any “yes” answers on the Form 8-R, the appropriate documentation should be obtained and reviewed for potential information disqualification. The applicants who submitted information regarding the registration should be obtained from the National Futures Association. This information is treated as non-public information and is available only to prospective employers.
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Question 6 of 10
6. Question
Which of the following statements are correct regarding the customer information to be kept in appropriate account documentation?
Correct
In opening new accounts, there are certain procedures that should require appropriate account documentation to be kept by the main office and the remote location. This documentation shall be reviewed for the assurance that the appropriate supervisory personnel approved the account. This shall also be reviewed to ensure that the customer received the appropriate risk disclosure. It may be necessary to communicate with the customer to verify that the disclosure was provided and that the customer understood its meaning.
Incorrect
In opening new accounts, there are certain procedures that should require appropriate account documentation to be kept by the main office and the remote location. This documentation shall be reviewed for the assurance that the appropriate supervisory personnel approved the account. This shall also be reviewed to ensure that the customer received the appropriate risk disclosure. It may be necessary to communicate with the customer to verify that the disclosure was provided and that the customer understood its meaning.
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Question 7 of 10
7. Question
Which of the following is true regarding the article reprints from industry publications which are used by the members?
Correct
The members who use articles must comply with the rules provided by the National Futures Association as long as they are the ones who use it. They are also responsible for the content of the articles. It is not necessary for the articles to balance a discussion of profit potential with an equally prominent discussion of the risk of loss. However, it is the responsibility of the member to review the accuracy of any numeric or statistical information in the article.
Incorrect
The members who use articles must comply with the rules provided by the National Futures Association as long as they are the ones who use it. They are also responsible for the content of the articles. It is not necessary for the articles to balance a discussion of profit potential with an equally prominent discussion of the risk of loss. However, it is the responsibility of the member to review the accuracy of any numeric or statistical information in the article.
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Question 8 of 10
8. Question
Which of the following is not a responsibility of a member for all of the promotional material they use?
Correct
The member is responsible for the following: (1) all material distributed on behalf of the member, (2) all materials being distributed by its employees, the member itself, and members and non-members of National Futures Association, (3) The electronic communications used by the firm’s associated persons. A member shall not avoid responsibility for promotional material by telling that they are unaware of its content and appearance. They are still responsible for the misinformation. of the material even if the promotional material is prepared by another person on behalf of the member.
Incorrect
The member is responsible for the following: (1) all material distributed on behalf of the member, (2) all materials being distributed by its employees, the member itself, and members and non-members of National Futures Association, (3) The electronic communications used by the firm’s associated persons. A member shall not avoid responsibility for promotional material by telling that they are unaware of its content and appearance. They are still responsible for the misinformation. of the material even if the promotional material is prepared by another person on behalf of the member.
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Question 9 of 10
9. Question
To which does the instant filing is available for under the disclosure documents of the National Futures Association?
I. To the documents that contain changes, either material or immaterial, from a previous filing that the association accepted.
II. To the documents that do not contain material changes from a previous filing that the association accepted.
III. To the new pool offerings that are substantially similar to documents of other pools that the CPO has operated and the NFA has accepted.
IV. To the pools that will be operated pursuant to an exemption in CFTC Regulations.Correct
After the Commodity Pool Operator filed a document with the acceptance of the National Futures Association, subsequent documents may be subject to instant filing where the expedition of the review process occurs. Instant filing is available to the following: (1) the documents which do not contain material changes from filing prior to the acceptance by the National Futures Commission, (2) the new pool offerings that are substantially similar to documents of other pools operated by the Commodity Pool Operator and upon the acceptance of the National Futures Commission, and (3) pools which operate pursuant to the CFTC exemption. The commodity pool operator must check the appropriate responses during the filing process to qualify for instant filing relief.
Incorrect
After the Commodity Pool Operator filed a document with the acceptance of the National Futures Association, subsequent documents may be subject to instant filing where the expedition of the review process occurs. Instant filing is available to the following: (1) the documents which do not contain material changes from filing prior to the acceptance by the National Futures Commission, (2) the new pool offerings that are substantially similar to documents of other pools operated by the Commodity Pool Operator and upon the acceptance of the National Futures Commission, and (3) pools which operate pursuant to the CFTC exemption. The commodity pool operator must check the appropriate responses during the filing process to qualify for instant filing relief.
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Question 10 of 10
10. Question
What are the two copies to be submitted by a Commodity Pool Operator who resubmits a previously reviewed or accepted document?
I. A signed copy by the director of the National Futures Association that has been made by the Commodity Pool Operator.
II. A marked copy that identifies all deletions and additions that have been previously filed with the National Futures Association.
III. A clean copy that identifies all deletions and additions that have been previously filed with the National Futures Association.
IV. A revised copy of the additions and deletions highlighted in a previous document filed with the National Futures Association.Correct
Under the guide in subsequent filings provided by the National Futures Association, a clean copy and a marked copy of the document that identifies all deletions and additions that have been previously filed with the National Futures Association must be submitted by a Commodity Pool Operator who resubmits a previously reviewed or accepted document. This may be done through striking through the deletions and underlining additions. The highlighted additions and deletions are removed from the clean copy of the same document. The National Futures Association will refuse to review or accept any subsequent filings which do not include a copy of the document identifying the additions and deletions.
Incorrect
Under the guide in subsequent filings provided by the National Futures Association, a clean copy and a marked copy of the document that identifies all deletions and additions that have been previously filed with the National Futures Association must be submitted by a Commodity Pool Operator who resubmits a previously reviewed or accepted document. This may be done through striking through the deletions and underlining additions. The highlighted additions and deletions are removed from the clean copy of the same document. The National Futures Association will refuse to review or accept any subsequent filings which do not include a copy of the document identifying the additions and deletions.