Welcome to General Registration and Account Rules: the first Regulations unit, where you learn who must register to do futures business, under whose authority, and everything a firm must do before a customer is allowed to place a single trade.
Exam Weight: Part 2 (Regulations) spans ~29% of the exam (Chapter 8, 35 of 120 scored questions) and is graded as its own independent section that must be passed at 70% on its own; the National Futures Association (NFA) does not publish per-unit weights.
What You'll Learn
- CFTC registrations and NFA membership: The two-regulator structure of the futures world (the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA)), the seven registration categories (and the money test that separates a firm holding customer funds from one that does not), the private-activity exemption, and why a public-facing firm must clear both gates
- Just and equitable principles of trade: The broad fair-dealing standard that catches unfair or dishonest conduct even when no narrower rule names the specific act
- Futures account opening requirements: The Know Your Customer duty, the verbatim risk-disclosure statement furnished before trading, the account documents, and the extra rules that apply to discretionary accounts
- Position reporting requirements: The reportable-level disclosure trigger that catches large speculators and hedgers alike
- Speculative position limits: The hard cap on how large a net speculative position can grow, and the hedge exemption that excuses bona-fide hedgers from it
Why This Matters
Series 3 candidates open and manage the very accounts these rules govern, so knowing who must register and what a firm owes a customer before trading begins is the ground floor of doing the job lawfully.
Regulations (Chapter 8) is also a separate pass-fail gate: a strong market-knowledge score cannot rescue a weak Regulations score, and vice versa, so this part is impossible to under-study. Everything here is definitions, documents, and one crisp distinction (reporting versus limits), with zero calculations.
Let's start with who regulates the futures world and who has to register.