CIFC Client Account Management and KYC Flashcards

A client with a low risk tolerance requests a high-risk equity fund. What should the registrant do?

Answer: Explain the mismatch and document the client's acknowledgment if they still wish to proceed

The registrant must explain the suitability concern and if the client insists, document the discussion and the client's informed decision before processing.

Which document authorizes a third party to make investment decisions on a client's account?

Answer: Power of Attorney or Trading Authorization form

A Power of Attorney or a Trading Authorization form grants a named third party legal authority to direct transactions in the client's account.

What is the primary purpose of the Fund Facts document under National Instrument 81-101?

Answer: To provide a plain-language 2-page summary of key fund information before purchase

Fund Facts is a mandated 2-page plain-language document that must be delivered to investors before or at the point of sale under NI 81-101.

A married couple opens a joint account. What type of account registration allows assets to pass automatically to the surviving spouse without going through probate?

Answer: Joint tenants with right of survivorship

Joint tenancy with right of survivorship means the surviving account holder automatically inherits the full account balance, bypassing the probate process.

Which regulatory body oversees mutual fund dealers in most Canadian provinces?

Answer: MFDA (now CIRO)

The Mutual Fund Dealers Association (MFDA), now amalgamated into CIRO (Canadian Investment Regulatory Organization), regulated mutual fund dealers across most provinces.

What must be provided to a client when a mutual fund trade is executed?

Answer: A trade confirmation showing the details of the transaction

Registrants are required to send clients a trade confirmation promptly after each transaction, detailing the fund, units, price, and settlement date.