CIFC Operations and Process Management 2

Question 1

What is the standard settlement period for mutual fund transactions in Canada?

Accepted Answer

Next business day (T+1)

Answer

Mutual fund transactions in Canada typically settle on T+1, meaning the next business day after the trade date.

Question 2

Which document must a client receive before purchasing a mutual fund for the first time?

Accepted Answer

Fund Facts document

Answer

The Fund Facts document must be delivered to clients before or at the point of sale of a mutual fund.

Question 3

A client submits a redemption order at 2:00 PM ET on a trading day. At what price will the redemption be processed?

Accepted Answer

The NAV calculated at the end of that same trading day

Answer

Orders received before the daily cut-off (typically 4:00 PM ET) are processed at that day's closing NAV.

Question 4

What is a 'trailer fee' in the context of mutual fund operations?

Accepted Answer

An ongoing commission paid by the fund company to the dealer for servicing client accounts

Answer

Trailer fees are ongoing commissions paid by fund companies to dealers as compensation for continued client service and account maintenance.

Question 5

In a back-end load (DSC) mutual fund, when does the deferred sales charge typically decline to zero?

Accepted Answer

After 5-7 years depending on the fund schedule

Answer

DSC schedules typically reduce the redemption fee over a 5–7 year period until it reaches zero, after which units can be redeemed without charge.

(CIFC) Canadian Investment Funds Course Practice Test