Regulatory Compliance & Ethics Flashcards

Customer segregated funds held by an FCM may be:

Answer: Kept separate from the FCM's own funds and used only for customers

CEA segregation rules require customer money to be separated from firm money.

The minimum adjusted net capital for an independent introducing broker is generally:

Answer: $45,000

An independent IB must maintain at least $45,000 in adjusted net capital.

A guaranteed IB differs from an independent IB because:

Answer: Its FCM guarantees its obligations under a written agreement

A guarantee agreement makes the FCM responsible for the IB's CEA-related obligations.

Which practice is an example of spoofing?

Answer: Entering a bid with intent to cancel before execution

CEA Section 4c(a)(5)(C) prohibits bidding or offering with intent to cancel before execution.

A customer has a claim against a member firm. Under CFTC reparations, a complaint must generally be filed within:

Answer: Two years

The CEA gives a two-year limitations period for reparations complaints.

A commodity trading advisor with fewer than 15 clients during the past 12 months who does not hold itself out generally as a CTA may qualify for:

Answer: A de minimis registration exemption

The de minimis exemption covers advisors with limited clients who do not publicly hold out.

The CFTC primarily regulates:

Answer: U.S. futures, options on futures, and swaps markets

The CFTC oversees derivatives markets under the Commodity Exchange Act.