Just and Equitable Principles of Trade
Chapters in this video
- 0:00 The pigeon loophole: how regulators catch unwritten schemes
- 1:47 The NFA mandate and the catch-all standard
- 2:27 Trading ahead mechanics and the fairness duty
- 3:22 Proactive obligations: diligence, honesty, and disclosure
- 3:50 Broad catch-all versus specific rule: the posted-sign analogy
- 4:55 Two exam gotchas: unnamed misconduct and firm-first behavior
- 5:39 Rapid-fire exam recap
What this video covers
- What the just and equitable principles of trade standard is, and why every NFA Member and Associate must observe high standards of commercial honor
- How this standard functions as the ultimate catch-all for dishonest or self-dealing conduct that no narrower rule happens to mention
- What trading ahead of customer orders means mechanically, and why it violates the duty to deal fairly
- The obligation to put the customer's interest ahead of the firm's own interest in solicitation and execution
- Recognized proactive applications: reasonable diligence for favorable execution, honest solicitation, and full cost disclosure
- How to distinguish the broad catch-all standard from specific binary rules on exam day
- The two classic exam gotchas: reaching for the catch-all when nothing specific fits, and recognizing that unnamed misconduct is still a violation
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 3 course also includes adaptive practice questions and spaced-repetition flashcards, free through the end of 2026.