Chap 4: Working with Clients Flashcards
When dealing with clients as a registered employee, good communications skills are of key importance; however, they are not the only consideration. You must have a _________ _________ that you can clearly articulate to your prospective clients.
Value Proposition
National Instrument 31-103 requires that persons wishing to trade in securities or to advise on the purchase or sale of securities in Canada must first be approved and registered in one of the following two categories:
- Dealing Representatives
- Advising Representatives
A representative of an investment dealer that is a member of IIROC must be approved by IIROC ________registration with the applicable ___________ __________ ____________ as a dealing representative.
Before
provincial securities administrators
The most common IIROC registration categories for individuals employed at a dealer member are ___________ ___________ and ____________ _____________.
Registered Representatives (RRs) Investment Representatives (IRs)
Remember, it is a _________ to work in the securities industry.
privilege
Where a policy conflicts with a rule:
The most stringent of the two applies.
You must disclose all outside activities and obtain ____________ from your dealer member before engaging in any outside activities.
pre-approval
___________ ___________ are permitted to provide advice on the full range of equity and fixed income securities products.
Registered Representatives
Requirements for Registered Representatives
- CSC, CPH
- 90-day training period
- 6-month period of Supervision
- 30-Month Requirement - to deal with retail customers, other than in mutual funds only, you must successfully complete the Wealth Management Essentials (WME) Course within 30 months of your approval.
- Continuing Education
For an RR to deal in options trading, you must complete the:
Derivatives Fundamentals and Options Licensing Course
For an RR to deal in futures options, you must complete the:
Derivatives Fundamentals Course (DFC) and The Futures Licensing Course
Individuals who deal with or provide discretionary portfolio management for managed accounts must be approved as either:
Portfolio Managers (PMs) or Associate Portfolio Managers (APMs)
PMs and APMs must meet proficiency requirements in addition to the successful completion of industry courses. Candidates must demonstrate a high level of
experience that is clearly relevant to discretionary portfolio management activities, otherwise known as:
relevant investment management experience (RIME)
To register as a PM, you must meet the following requirements:
Once you’ve completed the pre-requirements, you must also have ______ years of RIME; one year of which was gained within the three years before request approval acceptable to IIROC or If the CFA Charter is completed, at least one year of RIME within the three years before requesting approval acceptable to IIROC
- You must successfully complete the CPH and Canadian Investment Manager designation, or the Chartered Investment Manager (CIM) designation, or the Chartered Financial Analyst (CFA) Charter
4 years
To Register as an APM, you must meet the following requirements:
- You must successfully complete the CPH and Canadian Investment Manager designation, or the CIM Designation, or Level 1 or higher of the CFA Program
- Two years of RIME acceptable to IIROC within three years before requesting approval
Investment Representatives are registered solely to:
Take or submit client orders for execution.
IRs, must not, under any circumstance, :
provide clients with investment advice
To be registered as an Investment Representative, you must complete the following:
- CSC & CPH
- 30 day training program, as opposed to a 90-day program.
- 6 month period of supervision and to the compliance portion of the CE requirements.
You do not need to fulfill the 30-month WME requirement.
IRs may perform either of two roles:
Sales Assistant or IR at an Order Execution Only (also known as an online or discount broker) firm.
Registered Sales Assistants are ________ ____________ employed at full-service investment dealers to assist one or more fully registered RRs in managing their business.
Investment Representatives
Sales Assistants may take _________ __________ from clients to buy and sell securities.
Unsolicited Orders
Non registered staff are not permitted to carry out the following tasks:
- Open Client Accounts
- Complete KYC info on an account application (other than biographical Info)
- Provide recommendations or advice
- Solicit Securities Transactions
- Assist clients in completing orders for securities transactions
Non-Registered Staff are permitted to engage in the following activites:
- Advertise the services and products offered
- Deliver or receive securities to or from clients
- Contact clients to arrange appointments or give notice regarding deficiencies in completed forms
- Provide info on the status of a client’s account
- Contact the public; for example, inviting the public to seminars
- Receive completed account applications to forward to the dealer member for approval
- Distribute account applications
Individuals qualified to conduct only mutual fund business must also complete:
CSC and the CPH within 270 days of initial registration
IIROC conducts suitability reviews, know as the _____ ____ _______ ______, for individuals seeking IIROC approval or registration under securities legislation.
Fit and Proper Test
IIROC’s fit and proper test is an evaluation by registration staff of the applicant’s _________, ________ ________, and ___________
integrity, financial solvency, and competence
As an RR, your CE requirements consist of one or more approved programs every ____ years.
The program must equal at least ______ hours of a professional development course and at least _____ hours of a compliance course
Two
20 hours
10 hours
Creates and enforces a regulatory
framework for telemarketing call
Canadian Radio-television and Telecommunications Commission (CRTC)
Together, they establish requirements regarding allowable times of day to call, introductions, record maintenance, and penalties.
Canadian Radio-Television and Telecommunications Commission’s (CRTC’s) Unsolicited Telecommunications Rules and the National Do Not Call List
The National DNCL does not apply to telemarketing communications made to a ___________.
Business
The Canadian Radio-Television and Telecommunications Commission (CRTC) also helps enforce ________ __________ ____________, which establishes rules for the sending of commercial electronic messages (CMEs)
Canada’s Anti-Spam Legislation (CASL)
All written correspondence with clients, including electronic correspondence, must be approved by appropriate supervisory personnel and should be _________ in accordance with IIROC rules
retained
A sales communication about a mutual fund must:
- Contain no untrue or misleading statements
- make no statement that conflicts with information contained in the fund’s prospectus, annual information form (AIF), or Fund Facts document.
a plain language document containing key info about each class or series of mutual fund
The Fund Facts Document
The purpose of the Fund Facts document is to:
Provide investors with the info they need to make a knowledgeable decision before investing in a mutual fund
A situation where the interests of the parties may be in conflict or may conflict in the future.
A potential conflict of interest
A situation where a reasonable observer could conclude that an actual or potential conflict exists.
A perceived conflict of interest
Any existing or potential material conflict that cannot be addressed in a _____, _________, and __________ manner that is consistent with the client’s best interests must be avoided.
fair, equitable, and transparent
Personal financial dealings with clients are generally ____________.
Prohibited
Under IIROC rules, you must inform your ______ _______ of any outside business opportunities and obtain approval before engaging in those business activities.
dealer member
As an RR, you are ___________ to hold accounts at other dealer members, unless you have first obtained the express written permission of your employer. At least on a _______ basis, a statement showing all transactions in any such account must be provided to your employer by the firm carrying the account.
not permitted
Monthly
They set out the rules for the collection, use, or disclosure of personal information in the course of commercial activities in Canada
The Personal Information Protection and Electronic Documents Act (PIPEDA)
Generally, registrants must keep the client’s personal information confidential and cannot disclose the information to any third party without the client’s consent, EXCEPT under certain circumstances, including:
- For the purposes of collecting a debt; or
* When permitted or required by law.
In addition, as with anti-money laundering measures,
____________ solutions must be implemented by senior management and permeate down to all line staff
Cybersecurity
Dealer members must report certain cybersecurity incidents to IIROC. Incidents are reportable within _____ _____ of their discovery, and the dealer member must provide an investigation report to IIROC within ____ _____ of discovery.
3 Days
30 Days
