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

Insider trading involves buying or selling securities based on material information that has not been publicly disclosed, obtained through a privileged or confidential relationship.

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

Front-running is the prohibited practice of a dealer or advisor executing trades in their own account ahead of a pending client order, exploiting advance knowledge that the client's large order will affect the security's price.

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

Best execution requires dealers to take reasonable steps to achieve the most favorable outcome for the client when executing orders, considering multiple factors such as price, speed, and likelihood of execution.

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

CIRO rules require registered firms to provide a substantive written response to client complaints within 90 calendar days of receiving the complaint.

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

OBSI is an independent, not-for-profit organization that investigates and helps resolve disputes between investors and their investment firms when internal complaint processes have been exhausted.

CSC - Canadian Securities Course Practice Test

CSC - Canadian Securities Course Practice Test

CSC Ethics and Professional Conduct 2