Series 3 - Futures Regulators

Question 1

A “call market” on the CBT is:

Answer 1

One in which each delivery month is opened successively from the nearby through the most deferred.

Question 2

When the Business Conduct Committee of the NFA reviews a report of an investigation of an apparent rule violation, the NFA member is imposed with a trading restriction until the investigation is resolved.

Answer 2

False - Trading restrictions are only imposed in emergency situations by the NFA Business Conduct Committee. Such restrictions are not normally imposed during routine investigations.

Question 3

Disputes between and among Members shall normally be subject to arbitration under all circumstances.

Answer 3

True - Disputes between and among Members shall be subject to arbitration unless the parties themselves enter into a valid and binding agreement. This statement is true as stated. This information is based on NFA Member Arbitration Rules Section 2 (a).

Question 4

Every person handling accounts which meet or exceed position limits, including hedgers must file daily position reports with the CFTC.

Answer 4

True - Reports must be filed daily with the CFTC when position/trading limits are reached in the aggregate of all accounts they own or control. Everyone who meets or exceeds these limits including hedgers must file these daily reports. As found in CFTC Regulation 151.

Question 5

Reason For Price Limits

Answer 5

They are there to limit volatility. Not all Future Contracts have daily price limits.

Question 6

NFA members wishing to broadcast advertisements that include specific recommendations must receive pre-approval for such advertisements from the NFA 5 days prior to their broadcast.

Answer 6

False - 10 Days prior to use.