Exam CIFC Topic 1 Question 84 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 84
Topic #: 1

Quintin has been a Dealing Representative for Global Maximum Financial for 5 years. Today, he opened an account for his new client, Reginald. In addition to opening a new account, Reginald agreed to accept Quintin's investment recommendation and placed a purchase order to buy units of the Global Maximum Value Equity fund.
Quintin informed his Branch Manager Lupita about this new account on the same day the purchase order was received. Lupita told Quintin that she would complete her review of the New Client Application Form (NCAF) by no later than tomorrow.
Which statement regarding this new account opening is CORRECT?

A. Quintin cannot accept purchase orders from a client until Lupita completes her review of the NCAF. B. Lupita has two business days from the date of opening the new account to approve the NCAF completed by Quintin. C. Quintin and Lupita are both following proper procedure regarding new account openings and purchase orders. D. Unless Quintin is presently under probation, he does not need Lupita's approval regarding the NCAF.

Suggested Answer: A Vote an answer

Explanation
According to the MFDA Rules, a Dealing Representative must not accept any purchase orders from a client until the Branch Manager or other designated person has reviewed and approved the New Client Application Form (NCAF) for the client. This is to ensure that the Dealing Representative has obtained and verified all the necessary information about the client, such as identity, investment objectives, risk tolerance, financial situation, and suitability of investments. The review and approval of the NCAF must be completed before any trades are executed for the client, unless there are exceptional circumstances that justify a delay. In this case, Quintin should have waited for Lupita's approval of the NCAF before placing the purchase order for Reginald.
References: 1: MFDA Rules as at December 31, 2021 - MFDA 2 (Rule 2.2.4)

by Orville at Oct 21, 2024, 07:21 AM

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