QUESTION: 405 Topic: 5, Volume E

Which of the following correctly states the Model Code’s recommendations regarding terms and documentation?

Such documentation should be bi-laterally signed by the dealers of both principals intending to transact business.
When using such agreements... the wording in the agreement must be changed to match the actual transaction details after trading.
Such documentation should be signed, in many cases before any applicable market transactions are entered into.
For instruments where standard terms do not exist, the Model Code recommends that no documentation should be used.

Answer(s): C

QUESTION: 406 Topic: 5, Volume E

As to general risk management principles, the Model Code mentions that the organizationalstructure should ensure independent risk management and controls. Which one of the following is not among those controls?

open and effective communication channels between all levels of staff and cross-functions should be maintained.
regular internal audits should be carried out together with trading and risk management to ensure early identification of internal control weaknesses
complete segregation of duties between the front, middle and back office activities
a separate system for independent monitoring to ensure compliance with the risk management framework should be in place

Answer(s): B

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