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| Section | Weight | Objectives |
|---|---|---|
| Market and company analysis | 8% | - Basic market theories and stock market behaviour - Company performance analysis tools - Basic economic theories - Industry performance analysis - Economic indicators and sources of information - Effects of macroeconomic factors on financial markets - Technical and statistical analysis tools and information sources - Rules relating to companies - Factors influencing the macroeconomy |
| Market integrity, trade execution and settlement | 12% | - Features of different order types - Features of different account types - Order confirmation requirements - Specialized trading agreements for derivative accounts - Order entry, trade management, settlement and delivery - Reporting obligations to firms and regulators - Order variations, cancellations and corrections - Gatekeeping requirements for manipulative and deceptive practices, unacceptable activities and front running - UMIR gatekeeping obligations - Functions of investment banking, research and corporate finance - Universal Market Integrity Rules - Margin requirements |
| Conflicts of interest and ethics | 15% | - Ethical and legal responsibilities to clients - Conflicts of interest management process - CIRO and other ethical standards of conduct - Client confidentiality policies and procedures - Importance of managing conflicts of interest - Ethical principles and standards of conduct for Approved Persons and Investment Dealers - Inappropriate or prohibited personal financial dealings with clients - Requirements regarding positions of influence - Role of cybersecurity in protecting confidential information - Importance of ethics and its relationship to rules - Information controls, barriers, firewalls and restricted lists - Activities outside an Investment Dealer |
| Securities, managed products, mutual funds and other investments | 19% | - Features, risks and returns of managed products - Types, features, risks and returns of fixed income securities and products - Considerations affecting managed product investors - Considerations affecting equity investors and potential shareholders - Considerations affecting fixed income investors - Other investments including hedge funds, structured products, alternative investment funds, crypto assets and ESG-related products - Considerations affecting mutual fund investors - Types, features, risks and returns of equities - Purpose and uses of market indices - Asset classes generally sold and traded at an Investment Dealer - Types of pooled products - Considerations affecting exchange-traded fund investors |
| Client complaint handling and reporting | 5% | - Potential client issues, liability and consequences - Investment Dealer complaint reporting obligations and penalties - Investment Dealer obligations to clients - Recourse available to dissatisfied clients - Prohibited practices in client settlement agreements - Role of CIRO and provincial regulators in the complaints handling framework - Policies and procedures for reporting, handling and maintaining complaint records |
| Prospective client relationships | 10% | - Third parties and other professionals in the client's life - Client record documentation, filing and maintenance - Role of cost in product selection - Institutional client qualification requirements - Retail client information collection - Investment Dealer onboarding process - Required account agreement and Firm Welcome package documents - Client relationship model - Differences between retail and institutional clients - Impact of fees, turnover and taxes on investment returns - Exemptions under National Instrument 45-106 |
| Scope of client relationships | 15% | - Exemptions from suitability determination requirements - Account appropriateness versus suitability determination - Role of the Registered Representative in providing client service - Account appropriateness obligations - Typical services provided by institutional Investment Dealers - Suitability determination requirements for retail clients - Role of the Investment Representative in providing client service - Systematic approaches to investment management and investment strategies - Typical services provided by retail Investment Dealers - Investment performance benchmarks - Know-your-product obligations - Requirements for working with clients in the United States and other foreign jurisdictions - Internal escalation procedures and subject matter experts - Purpose and content of relationship disclosure - Trust, agency and fiduciary duty - Institutional client sophistication assessment and suitability exemptions - Product due diligence obligations |
| Overview of Canadian securities regulatory framework | 10% | - Purpose and implications of the Bank Act and Bankruptcy and Insolvency Act - Function and purpose of the Canadian Investor Protection Fund - Role and authority of the Canadian Investment Regulatory Organization - Function and purpose of other investment industry regulators and agencies - Other applicable laws including confidentiality, privacy, anti-spam, company disclosure and shareholder rights - Function and purpose of clearing agencies - Anti-money laundering and anti-terrorist financing legislation and regulations - Investment Dealer registration and individual approval requirements - Role and authority of the Canadian Securities Administrators and provincial and territorial securities and derivatives regulators - Function and purpose of investment industry marketplaces - Criminal Code and its application to financial crime |
| Derivatives | 5% | - Single and multi-legged derivative trading strategies - Features of other derivative contract types - Basic transactional elements of futures and options - Features of options contract types - Basic uses of derivatives - Administrative requirements for derivative trading with clients - Listed versus over-the-counter derivative markets - Prohibited derivative trading practices |
1. In a competitive market, when the quantity demanded equals the quantity supplied, what is the result for the price of the good or service?
A) The price will remain stable at the equilibrium point
B) The price will decrease due to excess demand
C) The price will fluctuate unpredictably based on market sentiment
D) The price will increase due to excess supply
2. An Investment Representative (IR) at an Investment Dealer notices that a long-standing client, who typically trades conservative blue-chip stocks in moderate amounts, has suddenly started making frequent large trades in high-volatility penny stocks. What is the IR's best course of action under gatekeeping regulatory requirements?
A) Monitor the transactions and wait for a regulatory authority to raise concerns
B) Recognize the client has changed their trading strategy and take no further action
C) Detail the client's activity and report it to a Supervisor or compliance
D) Freeze the client's account immediately and report the activity as fraudulent
3. Which of the following statements best describes the benefit of holding a cumulative preferred share?
A) It accumulates voting rights regardless of dividend payment status
B) It allows unpaid dividends to accumulate and be paid with priority
C) It accumulates interest on missed dividends until they are paid
D) It allows companies to accumulate redemption rights over a set time
4. A risk-averse investor is considering investing in preferred shares. What is one key feature of preferred shares that may appeal to such investors?
A) Preferred shares guarantee the highest potential for capital gains among all equity investments
B) Preferred shares typically pay fixed dividends and provide significant voting rights to shareholders
C) Preferred shares offer no risk of dividend suspension under any market conditions
D) Preferred shares provide fixed dividends and have a priority claim on company assets over common shares
5. How does an advisory account differ from a managed account?
A) They are provided to retail clients and institutional clients
B) The investment decisions are made by a Portfolio Manager
C) The client retains control over investment decisions
D) They can be used to provide access to complex investments
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: C | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: C |
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