CIFC Regulatory Framework and Compliance 3

Question 1

Which provincial securities regulators formed the Canadian Securities Administrators (CSA)?

Accepted Answer

All provincial and territorial securities regulators

Answer

The CSA is an umbrella organization comprising all 13 provincial and territorial securities regulators that coordinates and harmonizes Canadian securities regulation.

Question 2

Under the Client Relationship Model (CRM2) rules, dealers must provide clients with an annual report that shows:

Accepted Answer

The total compensation paid to the dealer and the client's investment performance

Answer

CRM2 requires annual reports showing the total costs paid by the client (charges and compensation) and the investment performance of their account.

Question 3

What registration category is required for an individual who sells mutual funds in Canada?

Accepted Answer

Mutual Fund Dealing Representative

Answer

Individuals who sell mutual funds must be registered as Mutual Fund Dealing Representatives under the applicable provincial securities legislation.

Question 4

Under NI 81-102, how frequently must a mutual fund's net asset value (NAV) be calculated at minimum?

Accepted Answer

Daily on each business day

Answer

NI 81-102 requires mutual funds to calculate their NAV on each business day the fund is open for purchases or redemptions.

Question 5

A dealer's compliance department discovers that a registered representative has been 'churning' a client's account. What does this mean?

Accepted Answer

The rep has been excessively trading to generate commissions rather than to benefit the client

Answer

Churning refers to excessive trading in a client's account primarily to generate commissions for the representative, rather than to serve the client's investment objectives.

(CIFC) Canadian Investment Funds Course Practice Test

(CIFC) Canadian Investment Funds Course Practice Test

CIFC Regulatory Framework and Compliance 3