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Canadian Regulatory Environment Flashcards

7 cards from real CSC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Canadian Regulatory Environment flashcards as text

  1. Under National Instrument 31-103, which registration category applies to an individual who provides securities advice directly to clients?

    Answer: Advising representative

    An advising representative is registered to provide advice on securities to clients, while a dealing representative is registered to execute trades or distribute securities.

  2. The Know Your Client (KYC) rule requires registrants to collect all of the following client information EXCEPT:

    Answer: Political party affiliation

    KYC rules require collecting investment objectives, risk tolerance, time horizon, financial situation, and other relevant personal information, but political affiliation is not a required KYC data point.

  3. Under suitability obligations in NI 31-103, a registrant must assess suitability:

    Answer: When accepting a client order, making a recommendation, or when a material change in the client's circumstances occurs

    Suitability must be assessed whenever an order is accepted, a recommendation is made, the client's know-your-client information changes materially, or securities are transferred into the account.

  4. FINTRAC requires a Large Cash Transaction Report (LCTR) to be filed when a client conducts a cash transaction of:

    Answer: $10,000 CAD or more in a single transaction or series of transactions within 24 hours

    Any cash transaction or series of cash transactions totaling $10,000 or more within a 24-hour period must be reported to FINTRAC as a Large Cash Transaction Report.

  5. Which FINTRAC report must be filed when a transaction—regardless of dollar amount—appears linked to money laundering or terrorist financing?

    Answer: Suspicious Transaction Report (STR)

    A Suspicious Transaction Report must be filed when there are reasonable grounds to suspect a transaction is related to money laundering or terrorist financing, with no minimum dollar threshold.

  6. Canada's AML '24-hour rule' requires reporting entities to:

    Answer: Aggregate multiple cash transactions by the same client within 24 hours to determine if the $10,000 LCTR threshold is met

    The 24-hour rule requires that all cash transactions conducted by or on behalf of the same client within a 24-hour window be combined; if they total $10,000 or more, an LCTR must be filed.

  7. Under Canadian AML regulations, a Politically Exposed Person (PEP) is best defined as:

    Answer: A person who holds or has held a prominent domestic or foreign public function, such as a head of state, senior government official, or senior military officer

    PEPs are individuals who hold or have held senior public positions—such as heads of state, cabinet ministers, or senior military officers—because they are considered higher-risk for corruption and money laundering.