Regulatory Compliance & Ethics 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 Regulatory Compliance & Ethics flashcards as text
How long must a futures commission merchant generally keep required records under CFTC rules?
Answer: Five years, with the first two years readily accessible
CFTC Regulation 1.31 requires records be kept five years and be readily accessible during the first two.
A broker buys for the house account just before entering a large customer buy order he knows will move the market. This is:
Answer: Front running, a prohibited practice
Trading ahead of a customer order exploits non-public order information and violates customer priority.
Which entity is the industry-wide self-regulatory organization for the U.S. derivatives industry?
Answer: National Futures Association
The NFA is the futures industry's self-regulatory organization under CFTC oversight.
A wash sale in futures is best described as:
Answer: A trade designed to give the appearance of trading without a genuine change in market position
Wash trades are prohibited because they create misleading appearances of trading activity.
Under the CEA, who appoints the CFTC Commissioners?
Answer: The President, with Senate confirmation
Commissioners are presidential appointees confirmed by the Senate.
An AP who leaves a firm must have the firm file a termination notice generally within what period?
Answer: 30 days
Firms must file termination notices (Form 8-T) within 30 days of the AP's departure.
Under the Bank Secrecy Act, a futures commission merchant that detects a suspicious transaction must generally file a SAR within:
Answer: 30 days
SARs are due within 30 calendar days of initial detection of facts that may constitute a basis for filing.
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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