Associated Person: An individual who solicits orders, customers or customer funds (or who supervises persons performing such duties) on behalf of a Futures Commission Merchant (FCM), an Introducing Broker (IB), Commodity Trading Advisor (CTA) or Commodity Pool Operator (CPO).


To qualify as an AP, an individual must pass the National Commodity Futures Exam (Series 3) within two years of applying for registration; fulfill ethics standards set by the sponsoring firm; and complete an application for registration and membership in the NFA which includes disclosing educational and disciplinary history and submitting fingerprint cards to the Federal Bureau of Investigation (FBI).

Any person, who will also act as the supervisor of a branch office of a FCM or an IB, must also complete the Branch Manager’s Examination (Series 30).

All APs must become members of the NFA as an Associate. Membership is mandatory and no other member, such as an FCM, IB, CTA or CPO, can conduct customer business with non-NFA individuals or firms.

U-10 is available online from the NFA or at the NASD’s site at www.nasd.com/. The exam costs $95 as of January 30, 2007. Once the form and fee has been submitted to the NASD and confirmation has been received from the NASD, the applicant may schedule an appointment to take the exam one time only within the next 120 days.

Some individuals can use alternative means or tests to satisfy the requirements. Some of those alternatives require that an individual limit the activities that he or she intends to engage in and to pass an alternative exam. These exams include the Series 31 Futures Managed Funds Exam (one hour; 45 true/false and multiple choice questions; $60) and the Series 32 Limited Futures Exam-Regulations (45 minutes; 35 true/false and multiple choice questions; $60).

Individuals who work as Branch Office Managers must indicate whether they have taken the Branch Manager exam (Series 30). This exam is one hour long and contains 50 true/false and multiple choice questions. Material covered includes supervisory issues. The exam costs $60.

The Series 3 exam includes 120 true/false and multiple choice questions. Candidates have 2-1/2 hours to complete the exam. The test has two parts – market knowledge and regulations. The test is given on a PC, so you can review and change your answers before you submit the completed test. The computer scores the exam and you will know the results before you leave the testing center. You must receive a score of 70 percent on both parts of the exam in order to pass.



In the market knowledge section of the exam you will be asked questions about the following areas:
(a) futures trading theory and basic functions terminology;
(b) futures margins, option premiums, price limits,
futures settlements, delivery, exercise and assignment;
(c) type of orders, customer accounts, price analysis;
(d) basic hedging, basis calculations, hedging futures;
(e) spreading;
(f) speculating in futures;
(g) option hedging, speculating, spreading.


In the regulation section of the exam questions include:

(a) general registration questions about all registration categories;
(b) futures account opening requirements;
(c) position reporting requirements;
(d) speculative position limits;
(e) FCM/IB regulations;
(f) CPO/CTA disclosure documents, promotional material and records to be maintained;
(g) arbitration procedures;
(h) NFA disciplinary procedures.