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Regulatory Frameworks & Compliance Flashcards

7 cards from real CFP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory Frameworks & Compliance flashcards as text

  1. Under the Securities Act of 1933, which of the following securities offerings is typically exempt from SEC registration under Regulation D, Rule 506(b)?

    Answer: A private placement to no more than 35 non-accredited sophisticated investors and unlimited accredited investors without general solicitation

    Rule 506(b) permits private placements to unlimited accredited investors and up to 35 sophisticated non-accredited investors without general solicitation or advertising.

  2. Which regulatory body has primary oversight responsibility for commodity futures trading and enforces position limits to prevent market manipulation?

    Answer: Commodity Futures Trading Commission (CFTC)

    The CFTC is the primary federal regulator of commodity futures and options markets, including enforcement of speculative position limits.

  3. A CFP® professional who learns that a client intends to commit financial elder abuse against a vulnerable adult is obligated to:

    Answer: Report the suspected abuse to the appropriate authorities and may withdraw from the engagement

    CFP Board's Standards permit—and in many states require—reporting suspected financial exploitation of vulnerable adults to authorities, overriding normal confidentiality obligations.

  4. The SECURE 2.0 Act of 2022 changed the required beginning date (RBD) for RMDs from IRAs for individuals who turn 72 after December 31, 2022, to which age?

    Answer: 73

    SECURE 2.0 increased the RMD starting age to 73 for those reaching age 72 after December 31, 2022, with a further increase to 75 scheduled for 2033.

  5. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which entity was created to monitor systemic risk to the U.S. financial system?

    Answer: Financial Stability Oversight Council (FSOC)

    FSOC was established by Dodd-Frank to identify and respond to systemic risks to the financial system, designating systemically important financial institutions.

  6. Under IRS rules, a CFP® who prepares tax returns for compensation and signs a client's return as the paid preparer is subject to penalties under IRC Section 6694 if the return contains an understatement attributable to:

    Answer: An unreasonable position without adequate disclosure or a willful or reckless disregard of rules

    IRC Section 6694 imposes penalties on paid preparers who take unreasonable positions without adequate disclosure or who willfully or recklessly disregard tax rules and regulations.

  7. The CFP Board's requirement to act as a fiduciary applies at a minimum during which engagement type?

    Answer: All financial planning engagements and when providing financial advice

    CFP Board requires CFP® professionals to act as fiduciaries whenever providing financial advice or financial planning, regardless of compensation model or asset level.