Communication & Stakeholder Engagement Flashcards

A customer has received a margin call. What is the best communication practice?

Answer: Promptly give clear notice of the amount due, the deadline, and the consequences of not meeting it

Clear, prompt notice of the amount and the deadline protects both the customer and the firm.

A customer says verbally, 'Trade the account however you think best.' What is required before the broker may exercise discretion?

Answer: Written authorization (power of attorney) from the customer, accepted by the firm

Discretionary trading requires the customer's written authorization and firm acceptance.

A broker's telephone solicitation script is treated as what under NFA rules?

Answer: Promotional material subject to Rule 2-29

Telemarketing scripts are promotional material and must meet Rule 2-29 standards.

Under NFA Rule 2-29, who must approve promotional material before its first use?

Answer: A principal of the member firm, in writing

A principal must review and approve promotional material in writing before first use.

A firm's promotion includes a customer testimonial. What must be disclosed?

Answer: That the testimonial may not be representative of other customers' experience, and whether the customer was paid

Testimonials must disclose that they may not represent other customers' experience and whether compensation was given.

May an FCM require a retail customer to sign a pre-dispute arbitration agreement as a condition of opening an account?

Answer: No, the agreement must be voluntary

CFTC rules prohibit conditioning account opening on a pre-dispute arbitration agreement.

What must be done when a customer order is received by telephone?

Answer: An order ticket must be prepared immediately and time-stamped

Rule 1.35 requires an order record prepared immediately upon receipt, with time stamps.