CIFC CIFC Client Account Management and KYC 2

Question 1

What is the 'suitability' obligation for mutual fund registrants in Canada?

Accepted Answer

Ensuring recommended investments are appropriate for the client's KYC profile

Answer

Suitability requires that any recommended investment aligns with the client's objectives, risk tolerance, time horizon, and financial situation collected during KYC.

Question 2

Which account type allows a Canadian investor to hold mutual funds with tax-sheltered growth and tax-deductible contributions?

Accepted Answer

RRSP

Answer

An RRSP (Registered Retirement Savings Plan) provides a tax deduction on contributions and tax-sheltered growth until withdrawal.

Question 3

A client wants to save for their child's post-secondary education. Which registered account is most appropriate?

Accepted Answer

RESP

Answer

A Registered Education Savings Plan (RESP) is specifically designed for education savings and attracts Canada Education Savings Grants (CESG).

Question 4

What does the term 'beneficial owner' mean in the context of client accounts?

Accepted Answer

The individual who ultimately owns and benefits from the assets in the account

Answer

The beneficial owner is the person who has the real economic interest in the assets, even if the account is held in another name.

Question 5

Under anti-money laundering (AML) rules, which of the following triggers enhanced due diligence for a client?

Accepted Answer

Being identified as a Politically Exposed Person (PEP)

Answer

Politically Exposed Persons (PEPs) require enhanced due diligence under Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

(CIFC) Canadian Investment Funds Course Practice Test

(CIFC) Canadian Investment Funds Course Practice Test

CIFC CIFC Client Account Management and KYC 2