Series 30 Part 1

An elevator operator who purchases grain and hedges generally plans to deliver the grain on each futures contract that the hedger sells.

The futures commission merchants, associated persons, partners or offices are required to learn the essential facts about the firm's customers and must supervise the amount of trading and the nature of trading in each account that the member firm maintains.

The CPO is not required to maintain confirmation statements received from the FCM.

A trader who is long July corn at 1.55 places a stop order to sell at 1.50. This insures that he will not lose more than 5 cents a bushel.

CTAs must provide the last three years worth of performance figures in their disclosure document.

IBs and FCMs are required to keep records of only those option complaints in excess of 1,000 because these must be reported to the NFA.

Margin requirements are generally higher for short positions that for long positions?

If an FCM guarantees an IB, the FCM is responsible for the actions of the IB and is subject to disciplinary action for any ciolation committed by the IB.

The NFA will not accept the resignation of an AP or member who is under NFA investigation.

If a Commodity Pool Operator has traded commodity interests for 2 years, it must disclose:

CPOs and CTAs that charge up-front fees must include these fees in the presentation of the breakeven point.

A stop order to buy would be used to offset a short position in a rising market.

Funds in an account in excess of the amount required to fully margin existing positions may be withdrawn or used to margin new positions.

Discretionary accounts must be renewed by the customer:

Information contained in the CPO's disclosure document may be furnished to the public up to 12 months after the date appearing on the cover page.

If a member firm wishes to open an account where an individual is exercising power of attorney over another individual's account, the member firm must obtain a copy of the power of attorney and notification if the agent is sharing in the profits because:

When a customer signs her margin agreement, she is allowing the member firm to automatically transfer funds from her regulated commodities account to her securities account if there is excess equity in the commodities account and a deficit in the securities account.

Promotional material that mentions the possibility of profits in futures trading does not need to state the possibility of the risk of loss since a customer must sign a Risk Disclosure Statement prior to trading commodities.

All of the following would be included in the definition of promotional material EXCEPT:

A farmer who has a crop growing in the ground and who sells futures would be assuming the role of a hedger.

The IB must keep the daily and monthly statements sent to customers in its files.

When disclosing performance in capsule form, a CTA may not combine the results of proprietary accounts and customers accounts.

A CPO may not commingle funds of a pool that it operates with funds of a pool that it operates with funds of any other pool or with its own funds.

In the event of violation of any law relating to commodity futures, the Commodity Futures Trading Commission may take the offender to court without referring the matter to the Attorney General.

An acceptable statement included in the promotional material distributed by your firm would include:

A Commodity Pool Operator is exempt from registration as a CPO if it receives no compensation, does not advertise, and operates only one pool at a time.

An exporter of soybean oil can effectively hedge against all of the following EXCEPT:

If FCM or IB fees are determines on a round turn or per trade basis the customer needs to receive a detailed explanation in writing.

An independent IB must maintain adjusted net capital equal to or in excess of $35,000

Membership in National Futures Association is mandatory for all of the following EXCEPT:

If the exchange changes the margin requirement, all traders whose equity is below the new maintenance margin level will be requires to deposit additional margin to immediately raise the equity to the new initial margin level.

If a commodity pool being solicited has trades commodity interests for less than 3 years the CPO must disclose a prominent statement to this effect and must also present the actual performance of every other pool it is operating for the last:

Since a CPO must submit 2 copies of its proposed disclosure document to the CFTC, it need not submit any copies to the NFA.

An individual who wishes to trade in futures contracts should be advised that he should only use money that is risk capital in his speculating activities. All of the following would be considered risk capital EXCEPT:

The rules of the Chicago Board of Trade allow any registered commodity representative (RCR) to exercise discretion over a customer's account.

CPOs and CTAs that intend to charge up-front fees and expenses to participants in a pool or clients in a managed account must disclose that fact in the disclosure document.

Under NFA guidelines, members should audit branch offices on an annual basis.

A customer has a long position on which the margin requirement is $1,000. She decides to switch to a later delivery month and instructs her account executive to sell her existing position of equivalent size in a later delivery month. In this case, the existing margin on deposit will cover her requirement on the new position and no additional cash need be deposited.

A commodity Trading Advisor's disclosure document must include only the CTA's commodity business background. Any other businesses the CTA was involved in would be irrelevant.

A customer has indicated that he might be interested in taking a position if the price of a commodity reaches a certain level. Two weeks later, the commodity reaches the level indicated. The AP tries to contact the customer but is unable to do so. Even though the account executive does not have discretionary authorization, she may enter the order if she thinks she will be able to contact the customer within a short time after the order is executed.

When a firm enters a GTC order, it will note as part of the order the time when it is to be canceled.

If a speculator maintains accounts for the same CFTC regulated commodity at several different FCMs, he can thereby avoid reporting his position to the CFTC.

A discretionary account may be handled by:

The minimum margin that a member firm must collect from its customers is determined by the:

Records of IBs, FCMs, CTAs and CPOs must be kept for 7 years

One of your registered commodities representatives sees an article in a local financial magazine discussing uses for new types of futures products. The representative would like to send the article to her clients who are currently investing in commodities. Which statement is true in regard to sending the article to her clients?

The maximum number of contracts either long or short , in any one futures month or in all futures months combines that may be held open or be controlled by any one person as prescribed by the CFTC, is:

A customer dissatisfied with an execution may file a complaint with the:

CPOs and CTAs must maintain accurate books and records at their main business office. If their main office is outside the United States they must provide these books and records requested by the CFTC or NFA in the US within:

The commodity pool disclosure document does not need to state the types of commodity interests that the pool will trade because the CTA makes those decisions.