Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is the role of an Introducing Broker-Dealer in commodities?

1. Accepts funds directly from customers

2. Solicits and accepts commodity futures orders from customers

3. Acts solely as an advisor on investments

4. Engages in commodities trading for personal profit

The correct answer is: Solicits and accepts commodity futures orders from customers

The role of an Introducing Broker-Dealer in commodities primarily involves soliciting and accepting commodity futures orders from customers. This function is crucial because it allows the broker-dealer to act as an intermediary between the customers and the futures markets. By soliciting orders, the Introducing Broker-Dealer enables clients to participate in trading commodities without needing to trade directly on the exchange themselves. They provide valuable services, including market insights, assistance with executing trades, and customer support. In contrast, the other options address functions that either do not align with the primary responsibilities of an Introducing Broker-Dealer or introduce elements that are not typical of their activities. Accepting funds directly from customers is more characteristic of a futures commission merchant (FCM), which handles the funds and manages the execution of trades in the markets. Acting solely as an advisor on investments is not the primary role of an Introducing Broker-Dealer, which focuses on order solicitation and trade execution. Engaging in commodities trading for personal profit describes the actions of traders or individuals trading on their behalf, rather than reflecting the essence of an Introducing Broker-Dealer's role in facilitating customer trades.