Chapter - 3

Question 1

A method of dispute resolution in which an independent arbitrator is chosen to assist aggrieved parties recover damages

Answer 1

Arbitration

Question 2

The body that administers the regulatory framework surrounding Québec’s financial sector: securities sector, the distribution of financial products and services sector, the financial institutions sector and the compensation sector

Answer 2

Autorité des marchés financiers (Financial Services Authority) (AMF)

Question 3

A federal Crown Corporation providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails

Answer 3

Canada Deposit Insurance Corporation (CDIC)

Question 4

A fund that protects eligible customers in the event of the insolvency of an IIROC dealer member. It is sponsored solely by IIROC and funded by quarterly assessments on dealer members.

Answer 4

Canadian Investor Protection Fund (CIPF)

Question 5

A forum for the 13 securities regulators of Canada’s provinces and territories to co-ordinate and harmonize the regulation of the Canadian capital markets.

Answer 5

Canadian Securities Administrators (CSA)

Question 6

Regulatory requirements that came into force in 2021, covering key industry requirements for the know your client rule, know your product rule, conflicts of interest, suitability and relationship disclosure

Answer 6

Client Focused Reforms

Question 7

Making a practice, directly or indirectly, of taking the opposite side of the market to clients, or effecting a trade for the advisor’s own account prior to effecting a trade for a client

Answer 7

Front running

Question 8

The general principle underlying Canadian securities legislation. All pertinent facts by those offering securities for sale to the public must be disclosed.

Answer 8

Full, true, and plain disclosure

Question 9

Refers to dealers and all of their employees who are responsible for protecting the markets from potentially illegal client activities. Universal Market Integrity Rules set out specific rules that identify the gatekeeper function and formal reporting procedures.

Answer 9

Gatekeeper

Question 10

The Canadian investment industry’s national self regulatory organization. It carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.

Answer 10

Investment Industry Regulatory Organization of Canada (IIROC)

Question 11

A person who is licensed to sell securities but is not permitted to give investment advice

Answer 11

Investment Representative

Question 12

The Self-Regulatory Organization (SRO) that regulates the distribution (dealer) side of the mutual fund industry in Canada

Answer 12

Mutual Fund Dealers Association (MFDA)

Question 13

Provides protection for eligible customers of insolvent MFDA member firms

Answer 13

Mutual Fund Dealers Association Investor Protection Corporation (MFDAIPC)

Question 14

The Canadian Radio-television and Telecommunications Commission (CRTC) has established Rules that telemarketers and organizations that hire telemarketers must follow. The DNCL Rules prohibit telemarketers and clients of telemarketers from calling telephone numbers that have been registered on the DNCL for more than 31 days.

Answer 14

National Do Not Call List (DNCL)

Question 15

A web-based system that permits mutual fund salespersons and investment advisors to file applications for registration electronically

Answer 15

National Registration Database (NRD)

Question 16

The federal regulatory agency whose main responsibilities regarding insurance companies and segregated funds are to ensure that the companies issuing the funds are financially solvent

Answer 16

Office of the Superintendent of Financial Institutions (OSFI)

Question 17

An independent organization that investigates customer complaints against financial services providers

Answer 17

Ombudsman for Banking Services and Investments (OBSI)

Question 18

A client’s ability to endure a potential financial loss

Answer 18

Risk capacity

Question 19

A client’s willingness to accept risk

Answer 19

Risk tolerance

Question 20

A federal body established by the United States Congress, to protect investors in the U.S. In Canada there
is no national regulatory authority; instead, securities legislation is provincially administered.

Answer 20

Securities and Exchange Commission (SEC)

Question 21

An organization recognized by the Securities Administrators as having powers to establish and enforce industry regulations to protect investors and to maintain fair, equitable, and ethical practices in the industry and ensure conformity with securities legislation. Canadian SROs include the Investment Industry Regulatory Organization of Canada and, the Mutual Fund Dealers Association.

Answer 21

Self-regulatory organization (SRO)