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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Market integrity, trade execution and settlement | 12% | - Derivative trading agreements - Order entry, trade processing, settlement and delivery - Reporting obligations - Order variations, cancellations and corrections - Universal Market Integrity Rules - UMIR gatekeeping obligations - Investment banking, research and corporate finance - Order types - Gatekeeping for manipulative and deceptive practices - Account types - Order confirmation requirements - Margin requirements |
| Topic 2: Scope of client relationships | 15% | - Institutional Investment Dealer services - Registered Representative role and client service - Account appropriateness - Institutional client sophistication and suitability exemptions - Product due diligence - Investment management styles and strategies - Clients residing in the United States and other foreign jurisdictions - Retail Investment Dealer services - Trust, agency and fiduciary duty - Account appropriateness versus suitability - Know-your-product requirements - Client suitability determination - Investment Representative role and client service - Relationship disclosure - Suitability exemptions - Investment performance benchmarks - Escalation to subject matter experts |
| Topic 3: Prospective client relationships | 10% | - Investment Dealer onboarding process - Account agreements and welcome documentation - Institutional client qualification - Third parties and professional advisers - Accredited investors and exemptions - Costs, fees, turnover and taxes - Retail and institutional clients - Client recordkeeping - Client relationship model - Retail client information and risk profile |
| Topic 4: Overview of Canadian securities regulatory framework | 10% | - Criminal Code and financial crime - Anti-money laundering requirements - Role and authority of the Canadian Investment Regulatory Organization - Confidentiality, privacy, anti-spam and shareholder rights legislation - Marketplaces and trading venues - Canadian Investor Protection Fund - Role and authority of the Canadian Securities Administrators and provincial/territorial securities and derivatives regulators - Investment Dealer registration and individual approval requirements - Clearing agencies - Bank Act and Bankruptcy and Insolvency Act - Other investment industry regulators and agencies |
| Topic 5: Conflicts of interest and ethics | 15% | - Ethical principles and standards of conduct - Managing conflicts of interest - Conflict identification, avoidance, addressing and disclosure - Personal financial dealings with clients - Client confidentiality - Ethical and legal responsibilities to clients - Positions of influence - Information barriers and restricted lists - Cybersecurity and confidential information - CIRO and other ethical standards - Outside activities of Approved Persons - Ethics and regulatory rules |
| Topic 6: Client complaint handling and reporting | 5% | - Settlement agreements with clients - Client issues and potential liability - Complaint policies, procedures and recordkeeping - CIRO and provincial regulator roles in complaint handling - Client recourse options - Investment Dealer obligations to clients - Investment Dealer complaint reporting obligations |
| Topic 7: Derivatives | 5% | - Transactional elements of futures and options - Prohibited derivative trading practices - Futures, forwards, swaps and contracts for difference - Uses of derivatives - Listed and over-the-counter derivatives markets - Derivative trading strategies - Options - Derivative account administration |
| Topic 8: Market and company analysis | 8% | - Economic information and indicators - Macroeconomic effects on financial markets - Company regulation, disclosure and investor rights - Basic economic theories - Industry performance analysis - Company performance analysis - Market theories and stock market behaviour - Technical and statistical analysis tools - Macroeconomic factors and policies |
| Topic 9: Securities, managed products, mutual funds and other investments | 19% | - Equities - Pooled products - Managed products - Market indices - Managed product investment considerations - Exchange-traded funds - Asset classes - Fixed income investment considerations - Equity investment considerations - Fixed income securities and products - Mutual funds - Other investments |
1. In relation to suitability which of the following is true?
A) There can only be one suitable recommendation that puts the client's interest first
B) There can only be one suitable recommendation balancing client and dealer interests
C) There may be multiple suitable recommendations that put the client's interest first
D) There may be multiple recommendations that prioritize both client and dealer interests
2. What must an Investment Dealer include in a remediation plan when addressing a capital deficiency?
A) A summary of penalties imposed on employees responsible for the shortfall
B) A list of high-risk investments used to improve capital reserves
C) A request to waive the capital requirement for a defined period
D) A detailed timeline for restoring compliance and actions taken to mitigate risks
3. What is the most likely consequence if an Investment Dealer breaches CIRO rules?
A) Client accounts being frozen
B) Inability to onboard institutional investors
C) External monitor appointed to oversee
D) Increased risk of regulatory penalties
4. An investment advisor is discussing the risks of investing in crypto assets with a client. Which of the following is a typical feature of crypto assets?
A) Their value can be highly volatile, subject to market speculation
B) They are intangible so have no opportunity for long term gain
C) The heavy regulatory burden leads to high associated costs
D) They are prone to sudden increases in supply diluting the price
5. An investor is considering mutual funds but has concerns about potential drawbacks. What is one significant disadvantage of investing in mutual funds?
A) High diversification in the portfolio
B) Liquidity allowing easy buying and selling
C) Professional management of the fund
D) Fees and expenses reducing overall returns
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: A | Question # 5 Answer: D |
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