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Canadian Securities Course VO1 > Chapter 1 > Flashcards

Chapter 1 Flashcards

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1
Q

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

A

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

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2
Q

What is SRO?

A

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

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3
Q

What is IIROC?

A

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

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4
Q

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

A

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

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5
Q

What is IIAC?

A

Investment industry association of Canada.

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6
Q

Types of investment dealers?

A

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

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7
Q

What is investment boutiques?

A

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

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8
Q

Who is senior management?

A

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

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9
Q

What is the structure of most investment dealers?

A

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

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10
Q

Which department is the biggest in investment dealers organizations?

A

Front office

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11
Q

What is services provided by investment dealers?

A

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

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12
Q

Is CDS a financial intermediary?

A

No.

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13
Q

What is CDSX?

A

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.

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14
Q

What is netting?

A

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

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15
Q

What are chartered banks?

A

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

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16
Q

What is Schedule I chartered banks?

A

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).

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17
Q

What is Schedule II chartered banks?

A

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.

18
Q

What is Schedule III banks?

A

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.

19
Q

What is credit unions and caisses populaires?

A

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

20
Q

What is the target of Credit union?

A

often serve common interest groups.

21
Q

What is CCAA?

A

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

22
Q

what is the most important aspect of insurance in Canada?

A

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)

23
Q

What is consumer finance companies?

A

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

24
Q

What is sales finance companies?

A

provide installment sales contracts.

25
Q

What are the financial intermediaries in Canadian securities industry?

A

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

26
Q

What are the services and products offered by investment dealers?

A

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

27
Q

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

A
  • 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.
28
Q

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

A
  • 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.
29
Q

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

A
  • Full-service branches
  • can accept deposits
  • some are merely lending branches
30
Q

What are the services and products offered by Insurance companies?

A
  • 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)
31
Q

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

A
  • Sell shares and units to the public

- invest proceeds in a diversified portfolio of securities.

32
Q

Who can act as trustees in charge of individual assets?

A

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

33
Q

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

A

Firewall

34
Q

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

A

Open End Funds or Mutual Funds

35
Q

What is Robo-advisors?

A

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.

36
Q

What is Fintech?

A

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

37
Q

What is market maker?

A

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

38
Q

What does underwriting mean?

A
  • 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.
39
Q

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

A

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

40
Q

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

A

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.

41
Q

What does the prudent portfolio approach to investing mean?

A

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.

Canadian Securities Course VO1 (13 decks)

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