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Question 1 of 30
1. Question
The CFTC’s regulations restrict a Member’s right to disclose non-public, personally identifiable financial information about customers and other consumers. These restrictions apply to which of the following?
I. Information about individuals who obtain financial products or services from the Member primarily for personal purposes.
II. Information about individuals who obtain financial products or services from the Member primarily for family purposes
III. Information about individuals who obtain financial products or services from the Member primarily for household purposes.
IV. Information about individuals who obtain financial products or services from the Member primarily for business purposesCorrect
The CFTC’s regulations restrict a Member’s right to disclose non-public, personally identifiable financial information about customers and other consumers. These restrictions only apply to information about individuals who obtain financial products or services from the Member primarily for personal, family, or household purposes.
Incorrect
The CFTC’s regulations restrict a Member’s right to disclose non-public, personally identifiable financial information about customers and other consumers. These restrictions only apply to information about individuals who obtain financial products or services from the Member primarily for personal, family, or household purposes.
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Question 2 of 30
2. Question
Members must have policies and procedures that describe which of the following information?
I. Administrative information
II. Technical information
III. Physical safeguards for protecting customer records
IV. Financial informationCorrect
Members must have policies and procedures that describe their administrative, technical, and physical safeguards for protecting customer records and information. The procedures should also address the Member’s policies for disclosing non-public, personally identifiable financial information and for notifying customers of those policies.
Incorrect
Members must have policies and procedures that describe their administrative, technical, and physical safeguards for protecting customer records and information. The procedures should also address the Member’s policies for disclosing non-public, personally identifiable financial information and for notifying customers of those policies.
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Question 3 of 30
3. Question
If your firm does not disclose non-public personal information to non-affiliated third parties, or does so in very limited circumstances, what additional information must be included in the privacy notice?
Correct
If your firm does not disclose non-public personal information to non-affiliated third parties, or does so in very limited circumstances, the only additional information you must include in the privacy notice is a statement that the firm shares non-public personal information with third parties as permitted by law.
Incorrect
If your firm does not disclose non-public personal information to non-affiliated third parties, or does so in very limited circumstances, the only additional information you must include in the privacy notice is a statement that the firm shares non-public personal information with third parties as permitted by law.
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Question 4 of 30
4. Question
What should the privacy notice include if your firm discloses non-public personal information to non-affiliated third parties for other reasons?
I. The notice must inform the customer that the firm discloses or reserves the right to disclose non-public personal information to non-affiliated third parties and that the customer has the right to opt out of that disclosure.
II. The notice must identify the categories of non-public personal information that your firm discloses and the categories of affiliates and non-affiliates that your firm will disclose the information to.
III. The notice must inform the customer that it may opt out of the disclosure and must provide a reasonable means for the customer to exercise its opt-out right.
IV. The notice must disclose non-public personal information to non-affiliated third partiesCorrect
If your firm discloses non-public personal information to non-affiliated third parties for other reasons, the notice must inform the customer that the firm discloses or reserves the right to disclose non-public personal information to non-affiliated third parties and that the customer has the right to opt out of that disclosure. The notice must identify the categories of non-public personal information that your firm discloses and the categories of affiliates and non-affiliates that your firm will disclose the information to. The notice must inform the customer that it may opt out of the disclosure and must provide a reasonable means for the customer to exercise its opt-out right.
Incorrect
If your firm discloses non-public personal information to non-affiliated third parties for other reasons, the notice must inform the customer that the firm discloses or reserves the right to disclose non-public personal information to non-affiliated third parties and that the customer has the right to opt out of that disclosure. The notice must identify the categories of non-public personal information that your firm discloses and the categories of affiliates and non-affiliates that your firm will disclose the information to. The notice must inform the customer that it may opt out of the disclosure and must provide a reasonable means for the customer to exercise its opt-out right.
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Question 5 of 30
5. Question
Your firm’s business continuity plan should address which of the following areas?
I. establishing back-up facilities, systems, and personnel in locations that are geographically separated from the firm’s primary facilities, systems, and personnel;
II. backing up or copying essential documents and storing the information off-site;
III. considering the impact of third-party business interruptions and identifying ways to minimize that impact; and
IV. developing a communication plan to contact essential parties such as employees, customers, counterparties, vendors, and disaster recovery specialists.Correct
Your firm’s business continuity plan should address the following areas:
-establishing back-up facilities, systems, and personnel in locations that are geographically separated from the firm’s primary facilities, systems, and personnel;
-backing up or copying essential documents and storing the information off-site;
-considering the impact of third-party business interruptions and identifying ways to minimize that impact; and
-developing a communication plan to contact essential parties such as employees, customers, counterparties, vendors, and disaster recovery specialists.Incorrect
Your firm’s business continuity plan should address the following areas:
-establishing back-up facilities, systems, and personnel in locations that are geographically separated from the firm’s primary facilities, systems, and personnel;
-backing up or copying essential documents and storing the information off-site;
-considering the impact of third-party business interruptions and identifying ways to minimize that impact; and
-developing a communication plan to contact essential parties such as employees, customers, counterparties, vendors, and disaster recovery specialists. -
Question 6 of 30
6. Question
Each Member must update its plan when necessary and must periodically review the plan and keep a record of the review. Your firm should distribute and explain the following except?
I. maintain copies of the plan at one or more off-site locations that are readily accessible to key employees
II. communicate the essential parts of the plan to all employees
III. the contact essential parties for identifying ways to minimize financial impact
IV. the plan to key employees
Correct
Each Member must update its plan when necessary and must periodically review the plan and keep a record of the review. Your firm should distribute and explain the plan to key employees, communicate the essential parts of the plan to all employees, and maintain copies of the plan at one or more off-site locations that are readily accessible to key employees.
Incorrect
Each Member must update its plan when necessary and must periodically review the plan and keep a record of the review. Your firm should distribute and explain the plan to key employees, communicate the essential parts of the plan to all employees, and maintain copies of the plan at one or more off-site locations that are readily accessible to key employees.
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Question 7 of 30
7. Question
Each FCM’s and IB’s written procedures must require the firm to identify the beneficial owner(s) by obtaining certain required information from which of the following?
I. The natural person opening the account on behalf of the legal entity customer
II. The natural person’s certification regarding the accuracy of the information provided
III. The name and title of the person opening the account
IV. The name and address of the legal entity for which the account is being opened.
Correct
Each FCM’s and IB’s written procedures must require the firm to identify the beneficial owner(s) by obtaining certain required information from the natural person opening the account on behalf of the legal entity customer, along with the natural person’s certification regarding the accuracy of the information provided. The information required includes the name and title of the person opening the account and the name and address of the legal entity for which the account is being opened.
Incorrect
Each FCM’s and IB’s written procedures must require the firm to identify the beneficial owner(s) by obtaining certain required information from the natural person opening the account on behalf of the legal entity customer, along with the natural person’s certification regarding the accuracy of the information provided. The information required includes the name and title of the person opening the account and the name and address of the legal entity for which the account is being opened.
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Question 8 of 30
8. Question
FCMs and IBs must establish procedures for making and maintaining a record of all information obtained during the identification and verification of beneficial owners. These procedures must require that a record be kept for which of the following?
I. A description of the non-documentary verification methods or additional verification methods used and the results
II. For verification, a description of any document relied on (noting the type, any identification number, place of issuance and expiration)
III. All identifying information obtained from a customer, including without limitation the certification
IV. A description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained
Correct
Recordkeeping Procedures – FCMs and IBs must establish procedures for making and maintaining a record of all information obtained during the identification and verification of beneficial owners. At a minimum, these procedures must require that a record be kept for: (1) all identifying information obtained from a customer, including without limitation the certification (if obtained); (2) for verification, a description of any document relied on (noting the type, any identification number, place of issuance and expiration); (3) a description of the non-documentary verification methods or additional verification methods used and the results; and (4) a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained.
Incorrect
Recordkeeping Procedures – FCMs and IBs must establish procedures for making and maintaining a record of all information obtained during the identification and verification of beneficial owners. At a minimum, these procedures must require that a record be kept for: (1) all identifying information obtained from a customer, including without limitation the certification (if obtained); (2) for verification, a description of any document relied on (noting the type, any identification number, place of issuance and expiration); (3) a description of the non-documentary verification methods or additional verification methods used and the results; and (4) a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained.
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Question 9 of 30
9. Question
A futures commission merchant (FCM) is an entity that solicits or accepts orders to buy or sell which of the following?
I. futures contracts
II. options on futures
III. retail off-exchange forex contracts or swaps
IV. future commoditiesCorrect
A futures commission merchant (FCM) is an entity that solicits or accepts orders to buy or sell futures contracts, options on futures, retail off-exchange forex contracts or swaps, and accepts money or other assets from customers to support such orders.
Incorrect
A futures commission merchant (FCM) is an entity that solicits or accepts orders to buy or sell futures contracts, options on futures, retail off-exchange forex contracts or swaps, and accepts money or other assets from customers to support such orders.
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Question 10 of 30
10. Question
Which of the following best describes Tom Next?
Correct
Tomorrow next (tom next), is a short-term foreign exchange transaction where a currency is simultaneously bought and sold over two separate business days, those being tomorrow (one business day) and the following day (two business days from today), otherwise known as the spot date.
Incorrect
Tomorrow next (tom next), is a short-term foreign exchange transaction where a currency is simultaneously bought and sold over two separate business days, those being tomorrow (one business day) and the following day (two business days from today), otherwise known as the spot date.
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Question 11 of 30
11. Question
Which of the following describes what a Pip is?
Correct
Pip – The smallest unit of trading in a foreign currency price
Incorrect
Pip – The smallest unit of trading in a foreign currency price
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Question 12 of 30
12. Question
Which of the following is the process of extending the settlement date on an open position by rolling it over to the next settlement date?
Correct
The process of extending the settlement date on an open position by rolling it over to the next settlement date.
Incorrect
The process of extending the settlement date on an open position by rolling it over to the next settlement date.
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Question 13 of 30
13. Question
Which of the following best described a forward transaction?
Correct
A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date.
Incorrect
A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date.
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Question 14 of 30
14. Question
Which of the following is/are included in the Counterparty, dealer?
I. Futures Commission Merchant
II. Retail Foreign Exchange Dealer
III. Regulated entities listed in the Commodity Exchange Act
IV. Commodities Exchange DealersCorrect
Counterparty, dealer: Futures Commission Merchant, Retail Foreign Exchange Dealer, other regulated entities listed in the Commodity Exchange Act
Incorrect
Counterparty, dealer: Futures Commission Merchant, Retail Foreign Exchange Dealer, other regulated entities listed in the Commodity Exchange Act
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Question 15 of 30
15. Question
Which of the following risks takes into account, among other things, the daily measurement of the amount of capital exposed to fluctuations in the value of foreign currency to comply with applicable limits and the establishment of safeguards against adverse currency fluctuations?
Correct
Foreign Currency Risk shall take into account, among other things, the daily measurement of the amount of capital exposed to fluctuations in the value of foreign currency to comply with applicable limits and the establishment of safeguards against adverse currency fluctuations.
Incorrect
Foreign Currency Risk shall take into account, among other things, the daily measurement of the amount of capital exposed to fluctuations in the value of foreign currency to comply with applicable limits and the establishment of safeguards against adverse currency fluctuations.
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Question 16 of 30
16. Question
Legal Risk shall take into account, among other things, the determination that any transaction and netting arrangements entered into have which of the following?
I. account opening documents are properly completed
II. a sound legal basis
III. account opening documents have adequate risk disclosure provided
IV. an evaluation of what impact any potential litigation may have upon firm capitalCorrect
Legal Risk shall take into account, among other things, the determination that any transaction and netting arrangements entered into have a sound legal basis, account opening documents are properly completed and adequate risk disclosure provided, and an evaluation of what impact any potential litigation may have upon firm capital.
Incorrect
Legal Risk shall take into account, among other things, the determination that any transaction and netting arrangements entered into have a sound legal basis, account opening documents are properly completed and adequate risk disclosure provided, and an evaluation of what impact any potential litigation may have upon firm capital.
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Question 17 of 30
17. Question
Operational Risk shall take into account the following except?
Correct
Operational Risk shall take into account, among other things, secure and reliable operating and information systems with adequate, scalable capacity and independence from the business trading unit; safeguards to detect, identify and promptly correct deficiencies in the operating and information systems; automated financial and risk management controls reasonably designed to prevent the placing of erroneous trades, including those that exceed pre-set capital, credit or volume thresholds; and reconciliation of all data and information in operating and information systems.
Incorrect
Operational Risk shall take into account, among other things, secure and reliable operating and information systems with adequate, scalable capacity and independence from the business trading unit; safeguards to detect, identify and promptly correct deficiencies in the operating and information systems; automated financial and risk management controls reasonably designed to prevent the placing of erroneous trades, including those that exceed pre-set capital, credit or volume thresholds; and reconciliation of all data and information in operating and information systems.
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Question 18 of 30
18. Question
Counterparty Risk shall take into account which of the following risks?
I. Settlement risks
II. Pricing risks associated with offsetting the FDM’s forex positions with counterparties
III. Operational risks
IV. Credit risksCorrect
Counterparty Risk shall take into account, among other things, all risks including but not limited to, settlement risks, pricing risks associated with offsetting the FDM’s forex positions with counterparties, including different prime brokers, banks and other FDMs.
Incorrect
Counterparty Risk shall take into account, among other things, all risks including but not limited to, settlement risks, pricing risks associated with offsetting the FDM’s forex positions with counterparties, including different prime brokers, banks and other FDMs.
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Question 19 of 30
19. Question
Liabilities to Retail Forex Customers Risk shall take into account, among other things, the process to ensure that the FDM has sufficient assets to cover the amount owed to retail forex customers on a daily basis. This process must include the following except?
Correct
Liabilities to Retail Forex Customers Risk shall take into account, among other things, the process to ensure that the FDM has sufficient assets to cover the amount owed to retail forex customers on a daily basis. This process must include:
a separation of duties among individuals responsible for advising customers on trading activities, approving or overseeing customer cash receipts and disbursements and recordkeeping and reporting financial transactions;
a method for ensuring the firm is accurately computing its liability to retail forex customers and accurately monitoring and valuing the funds used to cover the liability to retail forex customers;
a method for evaluating on a continued basis the depositories used to hold funds used to cover the amount owed to retail forex customers including ensuring that the depositories meet specified criteria relating to the depository’s capitalization, creditworthiness, operational reliability and access to liquidity, as well as the requirements of CFTC Regulation 5.8 and NFA Financial Requirements Section 14;
a method for assessing the appropriateness of specific investments of funds used to cover the liability to retail forex customers in permitted investments under CFTC Regulation 1.25; and
the timely recording of all transactions, including transactions impacting retail forex customers’ accounts, in the FDM’s books and records.Incorrect
Liabilities to Retail Forex Customers Risk shall take into account, among other things, the process to ensure that the FDM has sufficient assets to cover the amount owed to retail forex customers on a daily basis. This process must include:
a separation of duties among individuals responsible for advising customers on trading activities, approving or overseeing customer cash receipts and disbursements and recordkeeping and reporting financial transactions;
a method for ensuring the firm is accurately computing its liability to retail forex customers and accurately monitoring and valuing the funds used to cover the liability to retail forex customers;
a method for evaluating on a continued basis the depositories used to hold funds used to cover the amount owed to retail forex customers including ensuring that the depositories meet specified criteria relating to the depository’s capitalization, creditworthiness, operational reliability and access to liquidity, as well as the requirements of CFTC Regulation 5.8 and NFA Financial Requirements Section 14;
a method for assessing the appropriateness of specific investments of funds used to cover the liability to retail forex customers in permitted investments under CFTC Regulation 1.25; and
the timely recording of all transactions, including transactions impacting retail forex customers’ accounts, in the FDM’s books and records. -
Question 20 of 30
20. Question
Which of the following statements with regards to the Risk Management Program is/are true?
I. The Risk Management Program must also set risk tolerance limits for each of the risk elements above and discuss the underlying methodology used in setting these limits
II. The Risk Management Program must include policies and procedures for detecting breaches of risk tolerance limits set by the FDM and alerting supervisors within the risk management unit and senior management
III. As part of the Risk Management Program, the FDM must conduct stress tests under extreme but plausible conditions of all positions in the proprietary account and in each counterparty account at least on a semi-monthly basis.
IV. The Risk Management Program must also consider all risks posed by the FDM’s affiliates, including the risks affiliates pose when the FDM functions as the primary risk manager and/or liquidity provider for affiliates, the FDM’s other business lines and any other trading activity engaged in by the FDM.Correct
The Risk Management Program must also set risk tolerance limits for each of the risk elements above and discuss the underlying methodology used in setting these limits
The Risk Management Program must include policies and procedures for detecting breaches of risk tolerance limits set by the FDM and alerting supervisors within the risk management unit and senior management
As part of the Risk Management Program, the FDM must conduct stress tests under extreme but plausible conditions of all positions in the proprietary account and in each counterparty account at least on a semi-monthly basis.
The Risk Management Program must also consider all risks posed by the FDM’s affiliates, including the risks affiliates pose when the FDM functions as the primary risk manager and/or liquidity provider for affiliates, the FDM’s other business lines and any other trading activity engaged in by the FDM.Incorrect
The Risk Management Program must also set risk tolerance limits for each of the risk elements above and discuss the underlying methodology used in setting these limits
The Risk Management Program must include policies and procedures for detecting breaches of risk tolerance limits set by the FDM and alerting supervisors within the risk management unit and senior management
As part of the Risk Management Program, the FDM must conduct stress tests under extreme but plausible conditions of all positions in the proprietary account and in each counterparty account at least on a semi-monthly basis.
The Risk Management Program must also consider all risks posed by the FDM’s affiliates, including the risks affiliates pose when the FDM functions as the primary risk manager and/or liquidity provider for affiliates, the FDM’s other business lines and any other trading activity engaged in by the FDM. -
Question 21 of 30
21. Question
Financial Requirements Section 11(b) states which of the following?
Correct
Financial Requirements Section 11(b)
Section 11(b) prohibits a Forex Dealer Member from including assets held by an affiliate or an unregulated person in the firm’s current assets for purposes of determining its adjusted net capital under CFTC Regulation 5.7(b)(2)(v)(A).Incorrect
Financial Requirements Section 11(b)
Section 11(b) prohibits a Forex Dealer Member from including assets held by an affiliate or an unregulated person in the firm’s current assets for purposes of determining its adjusted net capital under CFTC Regulation 5.7(b)(2)(v)(A). -
Question 22 of 30
22. Question
Financial Requirements Section 13 states the following except?
Correct
Financial Requirements Section 13
Section 13 obligates FDMs to file daily reports regarding an FDM’s capital position and its ability to meet its obligation to retail Forex customers. Among other daily reporting obligations, FDMs must indicate the net aggregate notional value for all open futures and options Forex positions.
In addition, NFA requires FDMs to provide operational information on a monthly basis. These monthly reports must specify the number of retail and ECP Forex customers as well as how many customers are active, US domiciled or foreign domiciled. Also, FDMs must file monthly reports with respect to the FDM’s risk management of its market exposure.
FDMs must also file quarterly reports containing the most updated performance disclosures required by CFTC Regulation 5.5(e)(1)(i) – (iii).
Incorrect
Financial Requirements Section 13
Section 13 obligates FDMs to file daily reports regarding an FDM’s capital position and its ability to meet its obligation to retail Forex customers. Among other daily reporting obligations, FDMs must indicate the net aggregate notional value for all open futures and options Forex positions.
In addition, NFA requires FDMs to provide operational information on a monthly basis. These monthly reports must specify the number of retail and ECP Forex customers as well as how many customers are active, US domiciled or foreign domiciled. Also, FDMs must file monthly reports with respect to the FDM’s risk management of its market exposure.
FDMs must also file quarterly reports containing the most updated performance disclosures required by CFTC Regulation 5.5(e)(1)(i) – (iii).
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Question 23 of 30
23. Question
FDMs must also file quarterly reports containing the most updated performance disclosures required by CFTC Regulation 5.5(e)(1)(i) – (iii). This report must include which of the following?
I. the FDM’s capital position, its operations or any other information which NFA deems relevant
II. the percentage of non-discretionary retail forex customer accounts that were profitable during the quarter
III. the percentage of accounts that were not profitable during the quarter
IV. the total number of non-discretionary retail forex customer accounts maintained by the FDM for the prior quarterCorrect
FDMs must also file quarterly reports containing the most updated performance disclosures required by CFTC Regulation 5.5(e)(1)(i) – (iii). This report must include the total number of non-discretionary retail forex customer accounts maintained by the FDM for the prior quarter, the percentage of such accounts that were profitable during the quarter and the percentage of accounts that were not profitable during the quarter.
Incorrect
FDMs must also file quarterly reports containing the most updated performance disclosures required by CFTC Regulation 5.5(e)(1)(i) – (iii). This report must include the total number of non-discretionary retail forex customer accounts maintained by the FDM for the prior quarter, the percentage of such accounts that were profitable during the quarter and the percentage of accounts that were not profitable during the quarter.
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Question 24 of 30
24. Question
Members or their Associates are required to obtain certain personal and financial information from a customer. These include which of the following?
I. Customer’s address
II. Name
III. Previous investments
IV. Personal lifestyleCorrect
At a minimum, Members or their Associates must obtain the customer’s true name, address, principal occupation or business, and previous investment, futures trading and forex trading experience
Incorrect
At a minimum, Members or their Associates must obtain the customer’s true name, address, principal occupation or business, and previous investment, futures trading and forex trading experience
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Question 25 of 30
25. Question
With regards to individual customer information, the Member or Associate must obtain which of the following information?
I. customer’s net worth
II. customer’s current estimated annual income
III. customer’s net assets
IV. customer’s previous year’s annual incomeCorrect
For customers who are individuals, the Member or Associate must obtain the customer’s net worth or net assets and current estimated annual income or the previous year’s annual income.
Incorrect
For customers who are individuals, the Member or Associate must obtain the customer’s net worth or net assets and current estimated annual income or the previous year’s annual income.
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Question 26 of 30
26. Question
For FDMs,NFA Bylaw 1301(e) imposes a surcharge that is graduated according to which of the following?
Correct
For FDMs, NFA Bylaw 1301(e) imposes a surcharge that is graduated according to the firm’s gross annual revenue.
Incorrect
For FDMs, NFA Bylaw 1301(e) imposes a surcharge that is graduated according to the firm’s gross annual revenue.
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Question 27 of 30
27. Question
Which of the following statements in regards to Swap Dealer and Major Swap Participant Members is/are accurate?
I. Each Swap Dealer Member that meets the definition of a Large Financial Institution pursuant to Article XVIII of the Articles shall pay to NFA annual dues in the amount of $1,000,000;
II. Each Swap Dealer Member that does not meet the definition of a Large Financial Institution pursuant to Article XVIII of the Articles shall pay to NFA annual dues in the amount of $250,000;
III. Each Major Swap Participant Member shall pay to NFA annual dues in the amount of $150,000; and
IV. Any Swap Dealer Member or Major Swap Participant Member that is an affiliate as defined in Article XVIII of the Articles of a Swap Dealer Member that pays annual dues in the amount described in subsections (i) or (ii) above or a Major Swap Participant Member that pays annual dues in the amount described in subsection (iii) above shall pay annual dues in the amount of $150,000.Correct
Swap Dealer and Major Swap Participant Members
(i) Each Swap Dealer Member that meets the definition of a Large Financial Institution pursuant to Article XVIII of the Articles shall pay to NFA annual dues in the amount of $1,000,000;
(ii) Each Swap Dealer Member that does not meet the definition of a Large Financial Institution pursuant to Article XVIII of the Articles shall pay to NFA annual dues in the amount of $250,000;
(iii) Each Major Swap Participant Member shall pay to NFA annual dues in the amount of $150,000; and
(iv) Any Swap Dealer Member or Major Swap Participant Member that is an affiliate as defined in Article XVIII of the Articles of a Swap Dealer Member that pays annual dues in the amount described in subsections (i) or (ii) above or a Major Swap Participant Member that pays annual dues in the amount described in subsection (iii) above shall pay annual dues in the amount of $150,000.
Incorrect
Swap Dealer and Major Swap Participant Members
(i) Each Swap Dealer Member that meets the definition of a Large Financial Institution pursuant to Article XVIII of the Articles shall pay to NFA annual dues in the amount of $1,000,000;
(ii) Each Swap Dealer Member that does not meet the definition of a Large Financial Institution pursuant to Article XVIII of the Articles shall pay to NFA annual dues in the amount of $250,000;
(iii) Each Major Swap Participant Member shall pay to NFA annual dues in the amount of $150,000; and
(iv) Any Swap Dealer Member or Major Swap Participant Member that is an affiliate as defined in Article XVIII of the Articles of a Swap Dealer Member that pays annual dues in the amount described in subsections (i) or (ii) above or a Major Swap Participant Member that pays annual dues in the amount described in subsection (iii) above shall pay annual dues in the amount of $150,000.
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Question 28 of 30
28. Question
Under BYLAW 1301(d), Annual dues for the other membership categories shall be which of the following?
I. Commodity Investment Broker-$750
II. Commodity Trading Advisor-$750
III. Commodity Pool Operator-$750
IV. Introducing Broker-$750Correct
BYLAW 1301(d) Other Members.
Annual dues for the other membership categories shall be as follows:
(i) Commodity Trading Advisor-$750
(ii) Commodity Pool Operator-$750
(iii) Introducing Broker-$750Incorrect
BYLAW 1301(d) Other Members.
Annual dues for the other membership categories shall be as follows:
(i) Commodity Trading Advisor-$750
(ii) Commodity Pool Operator-$750
(iii) Introducing Broker-$750 -
Question 29 of 30
29. Question
Which of the following statements is/are true in relation to security deposit?
I. An FDM may decrease the required security deposit amount below the highest minimum security deposit amount as applicable to a particular currency under NFA Financial Requirements Section 12.
II. Security deposits help protect FDMs against losses from defaulting customers and ECP counterparties
III. An FDM is required to notify NFA’s Compliance department immediately if the FDM changes the security deposit amount it requires customers or ECP counterparties to deposit.
IV. FDMs must collect security deposits from customers. FDMs also must collect deposits from their ECP counterparties.Correct
FDMs must collect security deposits from customers. FDMs also must collect deposits from their ECP counterparties. These security deposits help protect FDMs against losses from defaulting customers and ECP counterparties, which, if significant enough, could cause an FDM to become insolvent and put the funds of its other, non-defaulting customers and ECP counterparties at risk.
An FDM is required to notify NFA’s Compliance department immediately if the FDM changes the security deposit amount it requires customers or ECP counterparties to deposit.
An FDM may not, however, decrease the required security deposit amount below the highest minimum security deposit amount as applicable to a particular currency under NFA Financial Requirements Section 12.
Incorrect
FDMs must collect security deposits from customers. FDMs also must collect deposits from their ECP counterparties. These security deposits help protect FDMs against losses from defaulting customers and ECP counterparties, which, if significant enough, could cause an FDM to become insolvent and put the funds of its other, non-defaulting customers and ECP counterparties at risk.
An FDM is required to notify NFA’s Compliance department immediately if the FDM changes the security deposit amount it requires customers or ECP counterparties to deposit.
An FDM may not, however, decrease the required security deposit amount below the highest minimum security deposit amount as applicable to a particular currency under NFA Financial Requirements Section 12.
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Question 30 of 30
30. Question
An unregulated person is defined as any person that is not one of which of the following?
I. An RFED registered with the CFTC and a Member of NFA
II. A broker-dealer registered with the SEC and a member of FINRA
III. An FCM registered with the CFTC and a Member of NFA
IV. A bank or trust company regulated by a U.S. banking regulatorCorrect
An unregulated person is defined as any person that is not one of the following:
A bank or trust company regulated by a U.S. banking regulator;
A broker-dealer registered with the SEC and a member of FINRA;
An FCM registered with the CFTC and a Member of NFA;
An RFED registered with the CFTC and a Member of NFA;
A bank or trust company regulated in a money center country and which has in excess of $1 billion in regulatory capital.Incorrect
An unregulated person is defined as any person that is not one of the following:
A bank or trust company regulated by a U.S. banking regulator;
A broker-dealer registered with the SEC and a member of FINRA;
An FCM registered with the CFTC and a Member of NFA;
An RFED registered with the CFTC and a Member of NFA;
A bank or trust company regulated in a money center country and which has in excess of $1 billion in regulatory capital.