Series 30 flashcards
Series 30 · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Branch office manager duty
- The BOM supervises branch activities, approves new accounts, reviews promotional material, monitors associated persons' trading, and documents supervisory reviews.
- Written supervisory procedures
- NFA Compliance Rule 2-9 requires each member to adopt written supervisory procedures and to diligently supervise employees and agents to achieve compliance with regulations.
- Branch office definition
- Under NFA Compliance Rule 2-30, a branch office is any location other than the main office where one or more associated persons regularly conduct futures business with customers.
- Branch office notification
- A member must notify NFA when it opens or closes a branch office and must designate a registered branch office manager for each branch office.
- Customer complaint handling
- Complaints should be logged, investigated, and resolved promptly; NFA examiners review complaint records and the firm's supervisory response to them.
- NFA Compliance Rule 2-1
- Members must observe high standards of commercial honor and just and equitable principles of trade in conducting their futures business.
- CFTC Regulation 1.55
- An FCM or IB must furnish a futures risk disclosure statement and obtain the customer's signed acknowledgment before opening a customer account.
- Options disclosure document
- Before accepting an option order, an FCM must deliver the CFTC-reviewed options disclosure document and the option risk disclosure statement to the customer.
- Price adjustment rule
- NFA Compliance Rule 2-43 bars adjusting or canceling a customer trade without consent unless the firm follows written procedures for bona fide errors.
- NFA Bylaw 1101
- A member may not conduct customer business with a person required to be registered who is not an NFA member; the firm must verify status.
- Fair and balanced communication
- NFA Compliance Rule 2-29 requires promotional material to be fair and balanced, not misleading, and to disclose the risk of loss.
- Hypothetical performance results
- Hypothetical or simulated results must carry a clear disclaimer that they do not represent actual trading and are limited by hindsight bias.
- Past performance disclaimer
- Advertising citing past performance must state that past results are not necessarily indicative of future results and must not imply guaranteed profits.
- Cold calling rules
- Telephone solicitations must comply with the National Do Not Call Registry and the firm's internal do-not-call list, which must be maintained and honored.
- Prohibited sales practices
- It is prohibited to guarantee profits, misstate risk, omit material facts, or use high-pressure tactics when soliciting a futures or options account.
- FCM minimum net capital
- Under CFTC Regulation 1.17, an FCM's adjusted net capital must be at least $1,000,000 or 8% of customer maintenance margin, whichever is greater.
- IB minimum net capital
- A non-guaranteed introducing broker that does not hold customer funds must maintain minimum adjusted net capital of $45,000 under CFTC rules.
- Customer segregation
- CFTC Regulation 1.20 requires an FCM to hold customer funds in segregated accounts and keep them separate from the firm's proprietary funds at all times.
- Permitted investments
- CFTC Regulation 1.25 limits investment of customer segregated funds to permitted instruments such as U.S. government securities and qualifying money market funds.
- Early warning notice
- An FCM must notify NFA and the CFTC when adjusted net capital falls below 150% of its minimum requirement, in addition to notice when below the minimum.
- Five-year retention rule
- CFTC Regulation 1.31 requires records to be kept for five years, with the first two years readily accessible for inspection by the CFTC and NFA.
- Order ticket records
- FCMs and IBs must keep order tickets and transaction records for five years, showing account, time, price, quantity, and order terms.
- Promotional material retention
- NFA Compliance Rule 2-29 requires retention of promotional material for three years after its last use, with documented supervisory approval.
- Monthly customer statements
- Under CFTC Regulation 1.33, FCMs send monthly statements for accounts with open positions and quarterly statements for accounts without open positions.
- AML program pillars
- A written AML program must include a designated compliance officer, policies and procedures, employee training, and independent testing, as required by the Bank Secrecy Act.
- Suspicious activity report
- An FCM or IB must file a SAR within 30 days of detecting suspicious activity involving at least $5,000 and retain related records for five years.
- Currency transaction report
- A CTR must be filed for currency transactions exceeding $10,000 in a single business day, generally within 15 days of the transaction.
- Ethical conduct standard
- NFA Compliance Rule 2-1 requires members to observe high standards of commercial honor and just and equitable principles of trade in all business.
- AP sponsorship requirement
- An associated person must be sponsored by an NFA member firm and registered with NFA before soliciting or accepting customer orders.
- Series 30 exam
- The Series 30 is the proficiency exam required for registration as a branch office manager; the candidate must also meet NFA registration requirements.
- Form 8-R
- The Form 8-R is the application used to register associated persons and branch office managers, collecting employment, background, and disciplinary history.
- Ongoing training
- Firms must provide ongoing training to associated persons on sales practices, AML, recordkeeping, and ethics, and should document attendance and content.