Client Relationship Management Flashcards
7 cards from real Series 3 – The National Commodities Futures Test practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Client Relationship Management flashcards as text
A customer fails to meet a margin call by the deadline. What may the FCM do under the account agreement?
Answer: Liquidate positions to cover the deficiency
The account agreement allows the FCM to liquidate positions to protect itself from the deficiency.
An AP enters a trade in a non-discretionary account without the customer's prior approval. This is best described as what?
Answer: Unauthorized trading
Trading without specific prior authority in a non-discretionary account is unauthorized trading.
A customer asks the AP to guarantee that the account will not lose money. What is the proper response?
Answer: Decline, because guarantees against loss are prohibited
CFTC rules prohibit guaranteeing a customer against loss.
Can a firm require a new retail customer to sign a pre-dispute arbitration agreement as a condition of opening an account?
Answer: No, the agreement cannot be mandatory
Under CFTC Rule 180.3, a customer cannot be required to agree to pre-dispute arbitration to open an account.
Excessive trading in a discretionary account primarily to generate commissions is known as what?
Answer: Churning
Churning is trading excessive in size or frequency to benefit the broker through commissions.
Customer funds held by an FCM must be handled how under the Commodity Exchange Act?
Answer: Held in segregated accounts separate from the FCM's own funds
Customer funds must be segregated from the FCM's own funds to protect customers.
Which forum is NOT generally available to a customer with a dispute against an NFA member?
Answer: Mediation by the local news media
Customers may use NFA arbitration, CFTC reparations, or courts, but not media mediation.
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Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy
- finra.org — Score release, test dates, test delivery, fees, exam format, passing score · verified Oct 2026
- nfa.futures.org — Eligibility, score validity · verified Oct 2026