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S3 > S3 - 1.3 > Flashcards

S3 - 1.3 Flashcards

1
Q

What is a CTA?

A

Commodities Trading Advisor

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2
Q

What is the CFTC?

A

Commodity Futures Trading Commission

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3
Q

What is the NFA?

A

National Futures Association

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4
Q

What is an IB?

A

Introducing broker

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5
Q

What is a CPO?

A

Commodity Pool Operator

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6
Q

Who must register with the CFTC and be a member of the NFA?

A

FCMs, CTAs, CPOs and IBs

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7
Q

Do employees of FCMs, CTAs, CPOs and IBs need to register in any way?

A

Ye2s, they must 1) register with CFTC as associated Persons, and 2) become Associated Members of the NFA

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8
Q

What do FCMs do?

A

1) Take orders and funds from clients

2) Buy/Sell futures + Options on futures

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9
Q

What are CFMs members of and what privileges do they have?

A

CFMs are members of the exchange and have Floor-trading privileges

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10
Q

Can FCMs trade their own accounts?

A

Yes, these are called Proprietary Accounts

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11
Q

How do we call an FCMs Own account?

A

Proprietary account

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12
Q

Other names for FCMs

A

Commission house, Brokerage firm, Wire-houses

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13
Q

Can firms not members of the exchange trade in the exchanges?

A

Yes - a FCM represents IBs (Introducing Brokers) by entering a Guarantee Agreement

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14
Q

What if the IB violates exchange rules?

A

The Guarantee Agreement makes the FCM liable for the IBs actions

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15
Q

What is a different name for a Bunched Order?

A

Block Trade

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16
Q

What is a Bunch Trade or Block Order?

A

Customer and Proprietary orders together -

1) No need to show allocation before the trade
2) Must report final allocation in written after trade

17
Q

What is a Fully-Disclosed IB account?

A

FCM list in which IB’s customers are known

18
Q

What’s another name for a non-clearing FCM?

A

Correspondent FCM

19
Q

What’s another name for a correspondent FCM?

A

Non-clearing FCM

20
Q

Omnibus Account

A

Account in which an clearing FCM carries the account of a non-clearing FCM (Correspondent FCM/firm)

21
Q

Does a Correspondent FCM need to disclose details of its clients?

A

NO

22
Q

Whose margin position does the clearing FCM need to know?

A

Only the Correspondent Firm’s but not those of its clients

23
Q

Is an Omnibus account the same as an Investment Company Account?

A

NO

S3 (33 decks)

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