Chapter 1

Question 1

What is securities commissions (securities administrators in some provinces)?

Answer 1

Provinces have the power to create and enforce their own laws and regulations through securities commissions.

Question 2

What is SRO?

Answer 2

SRO is self-regulatory organizations which is delegated some powers from Securities commissions to establish and enforce regulation.

Question 3

What is IIROC?

Answer 3

IIROC is one of the self-regulatory organizations (SRO).

Question 4

What is the role of CDS Clearing and depository services Inc?

Answer 4

Clearing (confirming and matching security) and settling (irrevocable moment when cash and securities are exchanged) trades and transactions.

Question 5

What is IIAC?

Answer 5

Investment industry association of Canada.

Question 6

Types of investment dealers?

Answer 6

Retail firms (full-service and self-directed brokers), institutional firms, and integrated firms (both retails and institutional markets. Active in secondary market)

Question 7

What is investment boutiques?

Answer 7

Smaller retail or institutional investment dealers that specialize in particular market segments.

Question 8

Who is senior management?

Answer 8

chairperson, president, executive vice-president, directors, departmental vice-president.

Question 9

What is the structure of most investment dealers?

Answer 9

front office (porfolio management, trading, sales, marketing), middle office (compliance, accounting, audits, legal), and back office (trade settlement)

Question 10

Which department is the biggest in investment dealers organizations?

Answer 10

Front office

Question 11

What is services provided by investment dealers?

Answer 11

advice, add liquidity, market makers, principals to serve larger institutional clients.

Question 12

Is CDS a financial intermediary?

Answer 12

No.

Question 13

What is CDSX?

Answer 13

CDSX is operated by CDS, facility for the clearing and settlement of securities inside and outside of Canada such as in TSX, TSX venture, exchange, ..Also for OTC trades.

Question 14

What is netting?

Answer 14

A process to establish and confirm a credit or debit position balance for each dealer member.

Question 15

What are chartered banks?

Answer 15

All banks operate under Bank act which dividing banks into Schedule I, II, III.

Question 16

What is Schedule I chartered banks?

Answer 16

domestic banks. Voting shares of large banks must be widely held, control of a person or group of shareholders restricted to no more than 20%. Medium size bank this number is 65% (2-12 billion) while the rest 35% must be held publicly. Small bank can be 100% (<2 billion).

Question 17

What is Schedule II chartered banks?

Answer 17

incorporate in Canada which is foreign bank subsidiaries. Can engage in all types of business permitted ot SChedule I. Most income from retail banking and electronic financial service. AMEX Bank of Canada, CItibank Canada, UBS bank.

Question 18

What is Schedule III banks?

Answer 18

federally-regulated foreign bank branches. tend to focus on corporate and insitutional finance and investment banking. Barclays Bank, comerica bank, the bank of new york Mellon.

Question 19

What is credit unions and caisses populaires?

Answer 19

offer businesses and consumers a wide of banking service like deposit, lending, mortgages, mutual funds, insurance, investment dealer service, and debit and credit cards.

Question 20

What is the target of Credit union?

Answer 20

often serve common interest groups.

Question 21

What is CCAA?

Answer 21

Cooperative Credit Associations Act which is used to govern credit union. Limit exposure of credit union to real estate and equity securities.

Question 22

what is the most important aspect of insurance in Canada?

Answer 22

Underwriting (Insurance underwriting is the business of evaluating the risk and associated contractual responsibility an insurance company is willing to accept in exchange for its clients’ insurance premiums)

Question 23

What is consumer finance companies?

Answer 23

make direct loans to consumers who can’t get loan from the bank and with higher interest.

Question 24

What is sales finance companies?

Answer 24

provide installment sales contracts.

Question 25

What are the financial intermediaries in Canadian securities industry?

Answer 25

Investment dealers, securities firms, chartered banks, trust companies, credit unions and caisses populaires, Insurance companies, pensions plans.

Question 26

What are the services and products offered by investment dealers?

Answer 26

Underwriting new securities in the primary market, trade securities in the secondary market as agent or principal, provide investment and financial planning advice, research.

Question 27

What are the services and products offered by Chartered banks Schedule I?

Answer 27

- Loans - saving and term deposits - sell mutual funds - sell other investment products - Specialized lending: mortgages, project financing for business, foreign lending to corporations or governments, credit card lending.

Question 28

What are the services and products offered by Chartered banks Schedule II?

Answer 28

- Loan to businesses - issue financial paper - take deposits for businesses - sell mutual funds and other investment products - provide all types of business services that Schedule I are permitted to do.

Question 29

What are the services and products offered by Chartered banks Schedule III?

Answer 29

- Full-service branches - can accept deposits - some are merely lending branches

Question 30

What are the services and products offered by Insurance companies?

Answer 30

- Term deposits and GICs - Segregated funds (quy tach biet) and other investment products - Life insurance (life and health, disability, term and whole life, property and casualty, home, car, commercial business, liability)

Question 31

What are the services and products offered by Investment fund companies?

Answer 31

- Sell shares and units to the public | - invest proceeds in a diversified portfolio of securities.

Question 32

Who can act as trustees in charge of individual assets?

Answer 32

Trust company (they are allowed to offer a wide range of financial services)

Question 33

Select the term that is used to refer to the controls that inhibit information sharing between various businesses and business units?

Answer 33

Firewall

Question 34

Which institution continually issue shares to investors and redeem these shares on demand?

Answer 34

Open End Funds or Mutual Funds

Question 35

What is Robo-advisors?

Answer 35

Robo-advisors are an alternative to self-directed execution only (discount) brokers. Portfolios are created using algorithms based on modern portfolio theory and on online client questionnaires.

Question 36

What is Fintech?

Answer 36

Financial technology companies, known collectively as the fintech industry, take advantage of computer technology to provide more efficient financial products and services.

Question 37

What is market maker?

Answer 37

carry out market making duties by taking positions in assigned listed stocks to enhance market liquidity and smooth out undue price distortions

Question 38

What does underwriting mean?

Answer 38

- The term 'underwriting' means to assume the risk of something. - In the securities industry, underwriting means to agree to buy. - In the insurance industry, underwriting means to insure someone against losses. (very complicated process). Act as independent brokers or agents (They sell insurance but the underwriting is actually done by another insurance firm) in the insurance industry. -> Independent brokers can often offer you a better price.

Question 39

What is the difference between retail banking, commercial banking and corporate banking?

Answer 39

Retail banking – refers to individual clients like you and I. Commercial banking – refers to commercial operations that require similar banking needs to individuals. Corporate banking – generally refers to large corporations and their financing needs

Question 40

What is the difference between a foreign bank branch and a foreign bank subsidiary?

Answer 40

Think of a branch like the bank branch you might visit to deposit money and carry out other banking activities. A subsidiary, in the context of banking, is a company owned by an eligible foreign institution but does not represent or act like a bank branch.

Question 41

What does the prudent portfolio approach to investing mean?

Answer 41

An investment standard. In some provinces, the law requires that a fiduciary (người được ủy thác), such as a trustee, may invest funds only in a list of securities designated by the province or the federal government. In other provinces, the trustee may invest in a security if it is one that an ordinary prudent person (một người thận trọng) would buy if he were investing for the benefit of other people for whom he felt morally bound to provide. Most provinces apply the two standards.