Series 3 Regulations Questions n
correct answers passed
Membership in the National Futures Association is mandatory for all of the following EXCEPT:
a. Futures commission merchants
b. Commodity pool operators
c. Commodity trading advisors
d. Banks - correct answer ✔✔ (D) The NFA membership is open to but not required for
exchanges, banks and commodity
related business firms.
Every employee of an NFA member that is
required to register with the CFTC must become an NFA associate.
a. True
b. False - correct answer ✔✔ (A) Every employee of an NFA member firm who is required to
register with the CFTC, must
become an NFA associate.
Every exchange that trades commodity
contracts and is registered with the CFTC is required to register floor traders and floor brokers
with the NFA as associates.
a. True
b. False - correct answer ✔✔ (B) Floor traders and floor brokers are not required to register as
NFA associates because they are subject to exchange regulations.
A person that is not an NFA member is
, prevented from dealing with the public if that business involves buying or selling futures
contracts for customers.
a. True
b. False - correct answer ✔✔ (A) Any person that is not an NFA member is prevented from
dealing with the public in business that involves buying or selling futures contracts for
customers because they will be unable to obtain execution of their orders.
Advertising and promotional material
would include all of the following EXCEPT:
a. Newspaper promotions
b. Pre-set telephone conversations to solicit business
c. Recruitments for new employees
d. Discussing an investment recom-mendation with a client - correct answer ✔✔ (D) Advertising
and promotional material includes employment advertising, newspapers and pre-set telephone
conversations to solicit business but it does not cover discussing an investment
recommendation with a client.
The Office of Compliance of the NFA
conducts a full scope audit of members:
a. Quarterly
b. Semi-annually
c. Annually
d. Every two years - correct answer ✔✔ (D) The NFA requires a "full scope" audit every two
years. This audit must cover every facet of the firm's business activities.
An infraction of NFA rules is reported to the:
a. Regional NFA Business Conduct Committee
b. Arbitration Committee of an exchange
correct answers passed
Membership in the National Futures Association is mandatory for all of the following EXCEPT:
a. Futures commission merchants
b. Commodity pool operators
c. Commodity trading advisors
d. Banks - correct answer ✔✔ (D) The NFA membership is open to but not required for
exchanges, banks and commodity
related business firms.
Every employee of an NFA member that is
required to register with the CFTC must become an NFA associate.
a. True
b. False - correct answer ✔✔ (A) Every employee of an NFA member firm who is required to
register with the CFTC, must
become an NFA associate.
Every exchange that trades commodity
contracts and is registered with the CFTC is required to register floor traders and floor brokers
with the NFA as associates.
a. True
b. False - correct answer ✔✔ (B) Floor traders and floor brokers are not required to register as
NFA associates because they are subject to exchange regulations.
A person that is not an NFA member is
, prevented from dealing with the public if that business involves buying or selling futures
contracts for customers.
a. True
b. False - correct answer ✔✔ (A) Any person that is not an NFA member is prevented from
dealing with the public in business that involves buying or selling futures contracts for
customers because they will be unable to obtain execution of their orders.
Advertising and promotional material
would include all of the following EXCEPT:
a. Newspaper promotions
b. Pre-set telephone conversations to solicit business
c. Recruitments for new employees
d. Discussing an investment recom-mendation with a client - correct answer ✔✔ (D) Advertising
and promotional material includes employment advertising, newspapers and pre-set telephone
conversations to solicit business but it does not cover discussing an investment
recommendation with a client.
The Office of Compliance of the NFA
conducts a full scope audit of members:
a. Quarterly
b. Semi-annually
c. Annually
d. Every two years - correct answer ✔✔ (D) The NFA requires a "full scope" audit every two
years. This audit must cover every facet of the firm's business activities.
An infraction of NFA rules is reported to the:
a. Regional NFA Business Conduct Committee
b. Arbitration Committee of an exchange
