CIFC CIFC Client Account Management and KYC 1

Question 1

What does KYC stand for in the context of Canadian investment fund sales?

Accepted Answer

Know Your Client

Answer

KYC stands for Know Your Client, the regulatory obligation to collect sufficient information about a client before making investment recommendations.

Question 2

Which of the following is a primary component of a KYC profile for a mutual fund investor?

Accepted Answer

Client's investment knowledge and risk tolerance

Answer

A KYC profile must include the client's investment knowledge, risk tolerance, time horizon, and financial situation to ensure suitable recommendations.

Question 3

Under MFDA rules, how often must a registrant update a client's KYC information at minimum?

Accepted Answer

Annually or when material changes occur

Answer

MFDA rules require registrants to update KYC information annually or whenever a material change occurs in the client's circumstances.

Question 4

What is the purpose of the New Account Application Form (NAAF) in mutual fund account opening?

Accepted Answer

To collect KYC information and establish the client relationship

Answer

The NAAF collects all required KYC details — personal information, financial situation, investment objectives, and risk tolerance — to establish a compliant client record.

Question 5

A client states she is 68 years old, retired, and needs income within 2 years. Which time horizon category best applies?

Accepted Answer

Short-term (under 3 years)

Answer

Because the client needs to access funds within 2 years, a short-term time horizon is appropriate and should influence product suitability assessments.

(CIFC) Canadian Investment Funds Course Practice Test

(CIFC) Canadian Investment Funds Course Practice Test

CIFC CIFC Client Account Management and KYC 1