Series 34 Exam Presentation

For an audio version of this presentation, please go to www.series34exam.com

Series 34 Exam Retail Off-Exchange Forex Examination

By Bart Mallon, Esq. www.series34exam.com

Overview • • • • • • • •

Background – Forex Registration Series 34 Basics Sections and Weighting Major Exam Topics Recommended Study Techniques My Thoughts on the Exam Questions Disclaimer

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Background - Forex Registration •

Commodities Exchange Act – Regulation of commodities and futures trading – No previous regulation of Forex activities (except limited antifraud authority)

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Farm Bill – Passed by Congress on May 22, 2008 – Major items with regard to off-exchange forex • Codifies CFTC’s anti-fraud authority • Requires registration for Forex CTAs, CPOs, IBs • Minimum capital requirements for FCMs and FDMs

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New Forex Regulations – To be proposed by CFTC – Subject to comment period

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Series 34 Exam Basics •

Who? –

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What? – – – – –

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Pearson and Prometric Testing Facilities

How? – –

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Tests can be scheduled anytime

Where? –

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Number of Questions: 40 True/False and Multiple Choice Time: 1 hour Passing Score: 70% Subject Matter: Retail Off-Exchange Forex Cost: $70

When? –

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Principals and Associated Persons of a Forex CTA, Forex CPO, or Forex Introducing Broker

Submit online Form U-10 through FINRA website (no sponsor is needed) Select exam time on Pearson or Prometric website

Why ? –

The CFTC is likely going to require forex managers to pass a proficiency exam. The NFA has designated the Series 34 as that proficiency exam.

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Sections and Weighting

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Major Exam Topics •

Definitions and Terminology  (10 questions) – American/European Terms – Currency pair, exchange rate, currency crosses, cross rates – Interest rate parity

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Forex Trading Calculations (8 questions) – Profit and loss calculations** – Cross rate transactions – Pip values – Effects of leverage calculations

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Risks Associated with Forex Trading (4 questions) – Credit Risk – Country Risk – Exchange Rate Risk – Interest Rate Risk

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Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants (10 questions) – BOP, BOT, current account, capital account – Forex clearing – CHIPS, fedwire – Central bank activities – interventions, sterilized interventions, discount rates – Elasticity of exchange rates – Fisher effect, international Fisher effect – Purchasing power parity

Forex Regulatory Requirements  (8 questions) – NFA Interpretive notices: Forex Transactions, Rule 236(e) – Know your customer – 9Promotional material Page 5 of

My Thoughts on the Exam •

My scores – – – – – – –

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Definitions and Terminology 7 of 10 (70%) Forex Trading Calculations 6 of 8 (75%) Risks Associated with Forex Trading 3 of 4 (75%) Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants 6 of 10 (60%) Forex Regulatory Requirements 8 of 8 (100%) Total Correct – 30 of 40 Time to complete the exam – approximately 42 minutes

Calculation heavy – –

Be prepared to use the calculator on the exam (approx. 5 questions) Don’t spend too much time on any one question

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Note on Pacing

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Other – – – –

Shorting currency pairs Current account, capital account, balance of trade, balance of payments Regulatory questions pretty straight forward Blog post: http://www.hedgefundlawblog.com/passing-the-series-34-exam.html

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Recommended Study Techniques • Same techniques used to pass Series 3 exam • Read a study guide • Notecards • Drill exam prep questions • Review night before; study notecards before

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Questions/ Issues to Consider • What happens if I don’t pass? • I have been an AP since May 22, 2008. Do I still have to register? • Do I need a sponsor to sign up for the Series 3 exam or the Series 34 exam? Pagetake 8 of 9 • When do I need to the exam by?

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Disclaimer •

This presentation was made for informational purposes only.

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I am not providing legal advice to any user.

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This presentation does not establish an attorney-client relationship between myself and the user.

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Any discussion herein is not a substitute for seeking actual legal advice from a licensed attorney with knowledge of the rules and regulations governing the industry.

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I make no representations, guarantees, or warranties as to the accuracy, completeness, currency, or suitability of the information provided via this presentation.

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This may be considered to be “attorney advertising” in some jurisdictions.

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For voice presentation, please see:

www.series34exam.com Please send questions, comments or suggestions to Bart Mallon, Esq. at [email protected]

Other helpful websites: www.forexregistration.com www.hedgefundlawblog.com www.forexlawblog.com