CSC Ethics and Professional Conduct 3

Question 1

Under Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which transactions must be reported to FINTRAC?

Accepted Answer

Large cash transactions of $10,000 CAD or more within a 24-hour period, and suspicious transactions regardless of amount

Answer

Financial entities must report large cash transactions of $10,000 CAD or more to FINTRAC, as well as any suspicious transactions that may be related to money laundering or terrorist financing, regardless of the dollar amount.

Question 2

What is a Suspicious Transaction Report (STR) in the context of anti-money laundering compliance?

Accepted Answer

A report submitted to FINTRAC when there are reasonable grounds to suspect a transaction is related to money laundering or terrorist financing

Answer

An STR must be filed with FINTRAC when a reporting entity has reasonable grounds to suspect that a transaction or attempted transaction is related to money laundering, terrorist financing, or a predicate offense.

Question 3

What does 'material information' mean in the context of securities disclosure obligations?

Accepted Answer

Information that would reasonably be expected to have a significant effect on the market price or value of a security if publicly disclosed

Answer

Material information is defined as information that a reasonable investor would consider important in making an investment decision, and that would likely significantly affect the price or value of the security if made public.

Question 4

What is the role of a firm's Chief Compliance Officer (CCO) under CIRO regulations?

Accepted Answer

To be responsible for establishing and maintaining a compliance system that ensures the firm and its employees meet all regulatory requirements

Answer

The CCO is responsible for overseeing the firm's compliance with applicable securities laws and regulatory requirements, including establishing policies and procedures to detect and prevent violations.

Question 5

What is 'gatekeeper responsibility' as it applies to registered representatives in Canada?

Accepted Answer

The obligation to identify and prevent suspicious or illegal activity from entering the financial system, even when acting on client instructions

Answer

Gatekeeper responsibility means that registrants must act as the first line of defense against financial crime, including refusing to process transactions that appear suspicious or illegal, even when a client requests them.

CSC - Canadian Securities Course Practice Test

CSC - Canadian Securities Course Practice Test

CSC Ethics and Professional Conduct 3