CSC Ethics and Professional Conduct 2

Question 1

What constitutes insider trading under Canadian securities law?

Accepted Answer

Trading securities based on material non-public information obtained through a position of trust or confidence

Answer

Trading securities based on publicly available research reports

Answer

Purchasing securities before a company's quarterly earnings are announced

Answer

Trading large blocks of shares that influence the market price

Question 2

What is 'front-running' in securities markets?

Accepted Answer

A dealer trading for their own account ahead of executing a large client order, knowing the client's order will likely move the market price

Answer

Being the first firm to underwrite a new securities offering

Answer

Processing client orders on a first-come, first-served basis

Answer

Submitting buy orders before the market opens each day

Question 3

What does 'best execution' require of a registered investment dealer?

Accepted Answer

Taking reasonable steps to achieve the most advantageous execution terms for the client considering price, speed, likelihood of execution, and other relevant factors

Answer

Executing all trades on the Toronto Stock Exchange regardless of price

Answer

Always obtaining the lowest commission rate available in the market

Answer

Executing only buy orders before sell orders on any given day

Question 4

Under CIRO's complaint handling rules, within what maximum timeframe must a registered firm provide a substantive response to a client complaint?

Accepted Answer

90 calendar days

Answer

30 calendar days

Answer

60 calendar days

Answer

180 calendar days

Question 5

Which organization provides independent dispute resolution services for Canadian investors who cannot resolve complaints with their investment dealer?

Accepted Answer

The Ombudsman for Banking Services and Investments (OBSI)

Answer

The Financial Consumer Agency of Canada (FCAC)

Answer

The Canadian Investor Protection Fund (CIPF)

Answer

The Investment Industry Association of Canada (IIAC)

Question 6

What ethical obligation requires an advisor to deal with clients honestly, fairly, and in good faith?

Accepted Answer

The fair dealing obligation

Answer

The principle of prudent investment

Answer

The best interests standard

Answer

The arm's length principle

Question 7

What is 'market manipulation' in the context of Canadian securities regulation?

Accepted Answer

Engaging in transactions or conduct intended to create a false or misleading appearance of trading activity or market price

Answer

Using leverage to amplify investment returns

Answer

Adjusting portfolio allocations in response to market conditions

Answer

Making large trades that naturally impact market liquidity