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CSC > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Def: Financial intermediary

A

Borrows money from suppliers of capital and lends it to users of capital.

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2
Q

Def: CSI

A
  • Canadian Securities Industry.
  • Regulated by provinces.
  • Creates laws and regulations through securities commission.
  • Delegates some power to CIRO.
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3
Q

Def: CIRO

A
  • National SFO
  • Oversees all investment deals.
  • Enforces industry regulations.
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4
Q

Def: SFO

A

Self -Regulatory Organization.

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5
Q

Def: Clearing

A

Process of confirming and matching security trade details.

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6
Q

Def: Settlement

A

Irrevocable moment when cash and securities are exchanged.

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7
Q

Def: Primary Market/Offering

A

First time issued securities market.

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8
Q

Def: Secondary Market

A

Preciously issued securities market.

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9
Q

Name 3 types of Investment dealers

A
  1. Retail Firms
  2. Institution Firms
  3. Integrated Firms
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10
Q

Def: Retail Firms

A

Clients have option of
- Full service
- Self-directed

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11
Q

Def: Institutional Firms

A
  • Exclusively institutional clients
  • Trade in large volumes
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12
Q

Def: Integrated Firms

A
  • Both retail and institutional markets
  • Active in secondary markets
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13
Q

Def: Investment Boutiques

A
  • Small retail or institutional dealers
  • Specialize in particular market segments
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14
Q

Def: Front Office

A

Portfolio management activities

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15
Q

Def: Middle Office

A

Operations of the firm

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16
Q

Def: Back Office

A

Settles the firm’s security transactions

17
Q

Def: Acting as Principal

A

Own the security and profit from the margin

18
Q

What Services Investment Dealers Provide

A

Information: Advice on primary and secondary markets and security information
Liquidity: Transactions from their own inventory add liquidity to the market
Market Makers: Taking positions in assigned listed stocks
Competitive Inventory: Accumulation of inventory attracts institutions

19
Q

Def: CDS

A

Clearing and Depository Services
- Facilitates trades in equities and debt securities through CDSX
- Banks, investment dealers and trust companies will have access to the CDSX

20
Q

Def: Netting

A

Establish and confirm a credit or debit position balance in the form of cash or security for each dealer.

21
Q

Def: Bank Act

A
  • Sets rules and operating rules and restrictions
  • Updated every 5 years
  • Designates chartered banks as Schedule I, II, III
22
Q

Def: Schedule 1 Bank

A
  • Considered a domestic bank (may have international operations)
  • Large sch I: Anyone shareholder is restricted to 20%
  • Medium sch I: 35% must be publicly traded, anyone shareholder is restricted to 65% and equity must be between 2Bl and 12Bl
  • Small sch I: Can be fully owen by 1 person but must have <2Bl
  • Deposits are eligible for insurance, provided by CDIC
23
Q

Def: CDIC

A

Canada Deposit Insurance Corporation
- Offer deposit insurance to schedule I banks.

24
Q

Def: Firewalls

A

Inhibits information sharing across banking business units

25
Q

Def: Schedule II

A
  • Federally regulated foreign bank
  • Deposits may be eligible for insurance by CDIC
  • May engage in all sch I bank business types
26
Q

Def: Schedule III

A
  • Federally regulated foreign bank branches of foreign institutions
  • Authorized under the Bank act to do business banking in Canada
  • Focus on corporate and institutional finance and investment banking
27
Q

Def: Credit Unions

A

Money savers and community benifits
Services:
- Deposit
- Lending
- Mortgages
- Mutual Funds
- Insurance
- Investment Dealer
- Debit or Credit Card

28
Q

Def: CCAA

A

Cooperate Credit Association Act
- Legislates credit unions
- Requires associations to adhere to “prudent portfolio approach” only allowed to acquire from an authorized financial and quasi-financial entities
- Restrict exposure to real property and equity securities

29
Q

Trust Companies

A

Only federally and provincially incorporated trust companies in Canada are authorized to engage in a trust business.

30
Q

Insurance Companies Offer what?

A
  • Life Insurance
  • Property and casualty insurance
31
Q

What life insurance products exist?

A
  • Health and disability insurance
  • Term and whole life insurance
  • Pension plans
  • Registered retirement savings plans
  • Annuities
32
Q
A

CSC (1 decks)

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