CMFAS RES 2B Derivatives-Specific Conduct Rules & OTC Market Infrastructure question: practice to the description

CMFAS RES 2BDerivatives-Specific Conduct Rules & OTC Market Infrastructure

Match the practice to the description. Which pairing is CORRECT?

A Hunting for stops: withholding a customer's stop order from the market for the dealer's benefit
B Bucketing: accepting a buy and a sell order at the same price for the same contract month from one customer
C Wash trade: taking the opposite side of a customer's order without exposing it to the market
D Pre-arranged trade: dealers agreeing a price between themselves before the trade is put through the market

Show the answer and explanation

Answer: D. Pre-arranged trade: dealers agreeing a price between themselves before the trade is put through the market

Pre-arranged trading is dealing at a predetermined price between traders, dealers or brokers. The bucketing and wash trade descriptions in A and B are swapped, and D describes withholding of orders under SFR(LCB) reg 47(1), not stop hunting.

Common mistake

Examiners swap definitions between adjacent offences; read each pairing slowly.

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Original study material mapped to the public CMFAS RES 2B syllabus. Unofficial, not endorsed by MAS or IBF. Verify figures and rules against current guidance before relying on them.