Leadership & Team Management Flashcards

Which CFTC regulation requires registrants to diligently supervise the handling of commodity interest accounts by their partners, officers, employees, and agents?

Answer: Regulation 166.3

CFTC Regulation 166.3 imposes the duty of diligent supervision on registrants (other than APs with no supervisory duties).

An AP wants to exercise discretion over a customer's account. What must be in place before the first discretionary trade?

Answer: The customer's signed written authorization

Trading discretion requires the customer's specific written authorization, and the firm must supervise the activity.

A branch manager receives a customer complaint alleging an unauthorized trade. What is the best first step?

Answer: Document the complaint, investigate promptly, and escalate under firm procedures

Complaints must be documented and promptly investigated, with escalation to compliance as procedures require.

A top-producing AP repeatedly fails to time-stamp order tickets. How should a supervisor respond?

Answer: Address it immediately and consistently, as with any other employee

Supervisory standards apply equally to all staff regardless of revenue production.

Which statement about delegation of supervisory tasks is correct?

Answer: A supervisor may delegate tasks but remains responsible for overseeing results

Tasks can be delegated, but the firm and supervisor remain accountable for reasonable oversight.

Which leadership behavior most strongly reinforces a culture of compliance?

Answer: Senior managers following the same rules they enforce

Consistent conduct by senior management sets the tone for the whole firm.

A supervisor reviews daily trade blotters mainly to detect which of the following?

Answer: Unusual patterns such as excessive trading or unauthorized activity

Routine blotter review is a core tool for spotting churning, errors, and unauthorized trades.