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| Section | Weight | Objectives |
|---|---|---|
| Conflicts of interest and ethics | 15% | - Outside activities of Approved Persons - Conflict identification, avoidance, addressing and disclosure - CIRO and other ethical standards - Client confidentiality - Managing conflicts of interest - Cybersecurity and confidential information - Ethical and legal responsibilities to clients - Personal financial dealings with clients - Ethical principles and standards of conduct - Information barriers and restricted lists - Ethics and regulatory rules - Positions of influence |
| Client complaint handling and reporting | 5% | - CIRO and provincial regulator roles in complaint handling - Investment Dealer obligations to clients - Complaint policies, procedures and recordkeeping - Investment Dealer complaint reporting obligations - Client recourse options - Client issues and potential liability - Settlement agreements with clients |
| Derivatives | 5% | - Prohibited derivative trading practices - Futures, forwards, swaps and contracts for difference - Listed and over-the-counter derivatives markets - Options - Transactional elements of futures and options - Derivative account administration - Uses of derivatives - Derivative trading strategies |
| Market integrity, trade execution and settlement | 12% | - Margin requirements - Order types - Order confirmation requirements - Order variations, cancellations and corrections - Gatekeeping for manipulative and deceptive practices - UMIR gatekeeping obligations - Order entry, trade processing, settlement and delivery - Account types - Universal Market Integrity Rules - Reporting obligations - Derivative trading agreements - Investment banking, research and corporate finance |
| Market and company analysis | 8% | - Basic economic theories - Market theories and stock market behaviour - Industry performance analysis - Macroeconomic factors and policies - Macroeconomic effects on financial markets - Company regulation, disclosure and investor rights - Company performance analysis - Technical and statistical analysis tools - Economic information and indicators |
| Securities, managed products, mutual funds and other investments | 19% | - Exchange-traded funds - Market indices - Equity investment considerations - Equities - Asset classes - Managed products - Fixed income securities and products - Managed product investment considerations - Pooled products - Mutual funds - Other investments - Fixed income investment considerations |
| Overview of Canadian securities regulatory framework | 10% | - Bank Act and Bankruptcy and Insolvency Act - Marketplaces and trading venues - Other investment industry regulators and agencies - Role and authority of the Canadian Investment Regulatory Organization - Investment Dealer registration and individual approval requirements - Role and authority of the Canadian Securities Administrators and provincial/territorial securities and derivatives regulators - Criminal Code and financial crime - Anti-money laundering requirements - Clearing agencies - Confidentiality, privacy, anti-spam and shareholder rights legislation - Canadian Investor Protection Fund |
| Prospective client relationships | 10% | - Investment Dealer onboarding process - Institutional client qualification - Account agreements and welcome documentation - Third parties and professional advisers - Accredited investors and exemptions - Costs, fees, turnover and taxes - Client relationship model - Retail client information and risk profile - Retail and institutional clients - Client recordkeeping |
| Scope of client relationships | 15% | - Investment management styles and strategies - Institutional client sophistication and suitability exemptions - Retail Investment Dealer services - Investment Representative role and client service - Product due diligence - Account appropriateness versus suitability - Escalation to subject matter experts - Know-your-product requirements - Trust, agency and fiduciary duty - Suitability exemptions - Institutional Investment Dealer services - Clients residing in the United States and other foreign jurisdictions - Registered Representative role and client service - Investment performance benchmarks - Client suitability determination - Account appropriateness - Relationship disclosure |
1. Which of the following is a key requirement of the client relationship model under the Investment Dealer and Partially Consolidated rules?
A) Providing disclosure of all material conflicts of interest to clients
B) Highlighting the client feedback on past client relationships
C) Offering always available client service for administrative queries
D) Prioritizing client decisions above the representative's advice
2. Which of the following is the primary role of a central bank in managing the macroeconomy?
A) To directly set wages and prices in the economy
B) To control the nation's fiscal policy
C) To regulate and monitor the stock market
D) To manage the country's money supply
3. A Registered Representative (RR) determines that an investment strategy is not suitable for a retail client. The client decides that they want to invest anyway. Which of the following should the RR do?
A) Seek advice from a self-regulatory authority
B) Refuse to undertake the investment strategy
C) Report the request as an unacceptable trade
D) Recommend an alternative action that is suitable
4. In relation to suitability which of the following is true?
A) There may be multiple recommendations that prioritize both client and dealer interests
B) There can only be one suitable recommendation that puts the client's interest first
C) There can only be one suitable recommendation balancing client and dealer interests
D) There may be multiple suitable recommendations that put the client's interest first
5. An investor wants to buy $50,000 worth of stock using margin. Their Registered Representative (RR) explains the regulatory requirements for margin to them. Why is it necessary to have margin requirements?
A) To reduce risk by ensuring investors have sufficient capital for losses
B) To enable clients to maximize their investment returns using borrowed funds
C) To allow investors to trade higher-risk securities without additional funding
D) To ensure the dealer earns more commission from larger leveraged trades
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: D | Question # 5 Answer: A |
Canadian Investment Regulatory Exam
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