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| Section | Weight | Objectives |
|---|---|---|
| Client complaint handling and reporting | 5% | - Investment Dealer complaint reporting obligations - CIRO and provincial regulator roles in complaint handling - Client issues and potential liability - Investment Dealer obligations to clients - Settlement agreements with clients - Complaint policies, procedures and recordkeeping - Client recourse options |
| Market and company analysis | 8% | - Market theories and stock market behaviour - Industry performance analysis - Macroeconomic effects on financial markets - Macroeconomic factors and policies - Company performance analysis - Basic economic theories - Company regulation, disclosure and investor rights - Economic information and indicators - Technical and statistical analysis tools |
| Securities, managed products, mutual funds and other investments | 19% | - Equities - Managed products - Pooled products - Fixed income securities and products - Mutual funds - Fixed income investment considerations - Asset classes - Other investments - Managed product investment considerations - Equity investment considerations - Market indices - Exchange-traded funds |
| Market integrity, trade execution and settlement | 12% | - Derivative trading agreements - Order types - Universal Market Integrity Rules - Account types - Reporting obligations - Investment banking, research and corporate finance - Order confirmation requirements - Margin requirements - Gatekeeping for manipulative and deceptive practices - Order entry, trade processing, settlement and delivery - UMIR gatekeeping obligations - Order variations, cancellations and corrections |
| Prospective client relationships | 10% | - Institutional client qualification - Retail and institutional clients - Costs, fees, turnover and taxes - Retail client information and risk profile - Accredited investors and exemptions - Investment Dealer onboarding process - Client relationship model - Third parties and professional advisers - Client recordkeeping - Account agreements and welcome documentation |
| Overview of Canadian securities regulatory framework | 10% | - Canadian Investor Protection Fund - Clearing agencies - Role and authority of the Canadian Securities Administrators and provincial/territorial securities and derivatives regulators - Bank Act and Bankruptcy and Insolvency Act - Anti-money laundering requirements - Investment Dealer registration and individual approval requirements - Marketplaces and trading venues - Criminal Code and financial crime - Role and authority of the Canadian Investment Regulatory Organization - Confidentiality, privacy, anti-spam and shareholder rights legislation - Other investment industry regulators and agencies |
| Derivatives | 5% | - Derivative trading strategies - Futures, forwards, swaps and contracts for difference - Options - Prohibited derivative trading practices - Derivative account administration - Uses of derivatives - Transactional elements of futures and options - Listed and over-the-counter derivatives markets |
| Conflicts of interest and ethics | 15% | - Ethical and legal responsibilities to clients - Positions of influence - Outside activities of Approved Persons - CIRO and other ethical standards - Ethics and regulatory rules - Personal financial dealings with clients - Conflict identification, avoidance, addressing and disclosure - Ethical principles and standards of conduct - Cybersecurity and confidential information - Client confidentiality - Managing conflicts of interest - Information barriers and restricted lists |
| Scope of client relationships | 15% | - Relationship disclosure - Investment performance benchmarks - Registered Representative role and client service - Account appropriateness - Suitability exemptions - Escalation to subject matter experts - Investment Representative role and client service - Institutional Investment Dealer services - Retail Investment Dealer services - Account appropriateness versus suitability - Investment management styles and strategies - Product due diligence - Know-your-product requirements - Trust, agency and fiduciary duty - Institutional client sophistication and suitability exemptions - Clients residing in the United States and other foreign jurisdictions - Client suitability determination |
1. An investment firm discovers a minor clerical error that caused a discrepancy in client transaction records. What is the most appropriate action under Investment Dealer and Partially Consolidated (IDPC) rules?
A) Correct the error and report the discrepancy to the Canadian Securities Administrators (CSA)
B) Document the discrepancy for internal audit and address it during review
C) Correct the error immediately and notify the client of the change
D) Report the issue to the federal anti-money laundering agency and restrict accounts
2. In a competitive market, when the quantity demanded equals the quantity supplied, what is the result for the price of the good or service?
A) The price will remain stable at the equilibrium point
B) The price will fluctuate unpredictably based on market sentiment
C) The price will decrease due to excess demand
D) The price will increase due to excess supply
3. Which of the following is a key feature of government bonds?
A) Government bonds are considered speculative investments due to their fluctuating interest rates
B) Government bonds typically have a high level of credit risk due to the issuer's potential for default
C) Government bonds do not have an expiration date, and investors can hold them indefinitely
D) Government bonds offer a fixed rate of return paid periodically, with the principal repaid at maturity
4. A risk-averse investor is considering investing in preferred shares. What is one key feature of preferred shares that may appeal to such investors?
A) Preferred shares guarantee the highest potential for capital gains among all equity investments
B) Preferred shares typically pay fixed dividends and provide significant voting rights to shareholders
C) Preferred shares offer no risk of dividend suspension under any market conditions
D) Preferred shares provide fixed dividends and have a priority claim on company assets over common shares
5. How do iceberg orders help reduce market impact and promote liquidity?
A) It hides the order from the trading market participants
B) It displays a small portion while hiding the rest
C) It executes within private dark pool trading venues
D) It displays full size of the order to improve execution
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: A | Question # 3 Answer: D | Question # 4 Answer: D | Question # 5 Answer: B |
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