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| Section | Weight | Objectives |
|---|---|---|
| Market and company analysis | 8% | - Technical and statistical analysis tools and information sources - Effects of macroeconomic factors on financial markets - Basic market theories and stock market behaviour - Rules relating to companies - Company performance analysis tools - Basic economic theories - Industry performance analysis - Factors influencing the macroeconomy - Economic indicators and sources of information |
| Market integrity, trade execution and settlement | 12% | - Features of different account types - Specialized trading agreements for derivative accounts - Features of different order types - Universal Market Integrity Rules - Gatekeeping requirements for manipulative and deceptive practices, unacceptable activities and front running - Order confirmation requirements - UMIR gatekeeping obligations - Order variations, cancellations and corrections - Reporting obligations to firms and regulators - Margin requirements - Functions of investment banking, research and corporate finance - Order entry, trade management, settlement and delivery |
| Conflicts of interest and ethics | 15% | - Role of cybersecurity in protecting confidential information - Ethical and legal responsibilities to clients - Requirements regarding positions of influence - Importance of ethics and its relationship to rules - Client confidentiality policies and procedures - Importance of managing conflicts of interest - Activities outside an Investment Dealer - Ethical principles and standards of conduct for Approved Persons and Investment Dealers - Inappropriate or prohibited personal financial dealings with clients - Conflicts of interest management process - Information controls, barriers, firewalls and restricted lists - CIRO and other ethical standards of conduct |
| Client complaint handling and reporting | 5% | - Role of CIRO and provincial regulators in the complaints handling framework - Investment Dealer complaint reporting obligations and penalties - Recourse available to dissatisfied clients - Potential client issues, liability and consequences - Investment Dealer obligations to clients - Prohibited practices in client settlement agreements - Policies and procedures for reporting, handling and maintaining complaint records |
| Derivatives | 5% | - Single and multi-legged derivative trading strategies - Basic uses of derivatives - Basic transactional elements of futures and options - Listed versus over-the-counter derivative markets - Features of options contract types - Administrative requirements for derivative trading with clients - Features of other derivative contract types - Prohibited derivative trading practices |
| Prospective client relationships | 10% | - Required account agreement and Firm Welcome package documents - Client relationship model - Institutional client qualification requirements - Differences between retail and institutional clients - Third parties and other professionals in the client's life - Client record documentation, filing and maintenance - Exemptions under National Instrument 45-106 - Impact of fees, turnover and taxes on investment returns - Role of cost in product selection - Investment Dealer onboarding process - Retail client information collection |
| Scope of client relationships | 15% | - Purpose and content of relationship disclosure - Role of the Registered Representative in providing client service - Account appropriateness obligations - Know-your-product obligations - Trust, agency and fiduciary duty - Requirements for working with clients in the United States and other foreign jurisdictions - Exemptions from suitability determination requirements - Typical services provided by retail Investment Dealers - Suitability determination requirements for retail clients - Investment performance benchmarks - Account appropriateness versus suitability determination - Product due diligence obligations - Institutional client sophistication assessment and suitability exemptions - Typical services provided by institutional Investment Dealers - Internal escalation procedures and subject matter experts - Role of the Investment Representative in providing client service - Systematic approaches to investment management and investment strategies |
| Overview of Canadian securities regulatory framework | 10% | - Other applicable laws including confidentiality, privacy, anti-spam, company disclosure and shareholder rights - Investment Dealer registration and individual approval requirements - Criminal Code and its application to financial crime - Purpose and implications of the Bank Act and Bankruptcy and Insolvency Act - Function and purpose of the Canadian Investor Protection Fund - Function and purpose of clearing agencies - Function and purpose of investment industry marketplaces - Function and purpose of other investment industry regulators and agencies - Role and authority of the Canadian Investment Regulatory Organization - Role and authority of the Canadian Securities Administrators and provincial and territorial securities and derivatives regulators - Anti-money laundering and anti-terrorist financing legislation and regulations |
| Securities, managed products, mutual funds and other investments | 19% | - Types, features, risks and returns of fixed income securities and products - Asset classes generally sold and traded at an Investment Dealer - Considerations affecting equity investors and potential shareholders - Types, features, risks and returns of equities - Other investments including hedge funds, structured products, alternative investment funds, crypto assets and ESG-related products - Purpose and uses of market indices - Considerations affecting mutual fund investors - Types of pooled products - Considerations affecting exchange-traded fund investors - Considerations affecting managed product investors - Considerations affecting fixed income investors - Features, risks and returns of managed products |
1. 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 provide fixed dividends and have a priority claim on company assets over common shares
C) Preferred shares offer no risk of dividend suspension under any market conditions
D) Preferred shares typically pay fixed dividends and provide significant voting rights to shareholders
2. Where would a retail client of an Investment Dealer find a description of its complaint handling procedures?
A) The know-your-client (KYC) Information Form
B) The Account Opening Agreement
C) The Relationship Disclosure
D) The Fee Disclosure Document
3. A trader wants to apply a bearish strategy using options to profit from an expected decline in the price of a commodity. What is the most suitable approach?
A) A long future position
B) Purchase a put option
C) Purchase a call option
D) Sell a put option
4. Why might a company choose to issue preferred shares instead of debt?
A) Preferred shares provide shareholders with voting rights and a maturity date
B) Preferred shares do not create legal obligations to make interest or principal payments
C) Preferred shares are less expensive than debt due to their fixed dividend obligations
D) Preferred shares offer tax-deductible dividend payments that lower corporate tax expenses
5. Which of the following accurately describes a key characteristic of mutual fund trusts?
A) They are subject to a flat tax rate, regardless of the income they generate
B) They issue shares that can be traded on the stock exchange, similar to stocks
C) They invest in a diversified portfolio of assets and pass on income to unitholders
D) They are restricted to investing in government bonds and cannot hold equity investments
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: C |
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