Client Relationship Management Flashcards

Under CFTC Rule 1.55, when must an FCM or IB obtain a signed acknowledgment of the risk disclosure statement from a new retail customer?

Answer: Before the account is opened

The risk disclosure statement must be furnished and acknowledged in writing before the account is opened.

Which item is NOT part of the basic identity information collected under the Customer Identification Program for an individual U.S. customer?

Answer: Name of the customer's employer

CIP requires name, date of birth, address, and an identification number, not the employer's name.

When one owner of a joint account with right of survivorship dies, what generally happens to the account?

Answer: It passes to the surviving owner(s)

Right of survivorship transfers the decedent's interest directly to the surviving owner(s).

A corporation wants to open a futures account. Which document is typically required to authorize trading?

Answer: A corporate resolution naming who may trade

A corporate resolution confirms the entity may trade futures and identifies authorized persons.

Before an associated person may exercise discretion over a customer's account, what is required?

Answer: Written trading authorization from the customer and firm acceptance

Discretion requires the customer's written authorization and the firm's acceptance of it.

How often must a customer with open positions generally receive an account statement from the FCM?

Answer: Monthly

Customers with open positions or account activity must receive statements at least monthly; others at least quarterly.

For an individual, which describes an eligible contract participant (ECP) under the usual test based on discretionary investments?

Answer: More than $10 million invested on a discretionary basis

An individual with over $10 million invested on a discretionary basis (or $5 million if hedging) is an ECP.