IFC The Know Your Client Process 2

Question 1

Under IIROC and MFDA rules, how frequently must a dealer member update a client's KYC information at minimum?

Accepted Answer

Annually

Answer

Dealer members must update KYC information at least annually to ensure client information remains current and accurate.

Question 2

A client refuses to provide income information during the KYC process. What is the most appropriate course of action for the registered representative?

Accepted Answer

Open the account and note the refusal in the file

Answer

A registrant may open the account while documenting the client's refusal, though this limits the suitability assessment that can be performed.

Question 3

Which of the following best describes 'investment knowledge' as a KYC factor?

Accepted Answer

The client's understanding of how various financial instruments work

Answer

Investment knowledge refers to the client's understanding and familiarity with financial instruments, not tenure or credentials alone.

Question 4

A client's risk tolerance questionnaire indicates 'conservative,' but the client verbally insists on buying high-risk equities. What should the representative do?

Accepted Answer

Document the discrepancy and discuss it with the client before proceeding

Answer

The representative should flag the inconsistency, discuss it with the client, and update the KYC file if the client's true risk tolerance has changed before executing the trade.

Question 5

Which life event would most likely trigger an immediate KYC review outside of the regular update cycle?

Accepted Answer

A client retires and their income drops significantly

Answer

Retirement causing a significant income reduction materially changes a client's financial situation and risk capacity, requiring an immediate KYC update.

IFC - Investment Funds in Canada Practice Test

IFC - Investment Funds in Canada Practice Test

IFC The Know Your Client Process 2