CHAPTER 3 | THE CANADIAN REGULATORY ENVIRONMENT

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

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

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

Question 5

The CSA is 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

Question 6

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 6

front running

Question 7

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

Answer 7

full, true, and plain disclosure

Question 8

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 8

gatekeeper

Question 9

The Canadian investment industry’s national self-regulatory organization. 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 9

Investment Industry Regulatory Organization of Canada

Question 10

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

Answer 10

investment representative

Question 11

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

Answer 11

Mutual Fund Dealers Association

Question 12

Provides protection for eligible customers of insolvent MFDA member firms.

Answer 12

Mutual Fund Dealers Association Investor Protection Corporation

Question 13

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 13

National Do Not Call List

Question 14

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

Answer 14

National Registration Database

Question 15

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 15

Office of the Superintendent of Financial Institutions

Question 16

An independent organization that investigates customer complaints against financial services providers.

Answer 16

Ombudsman for Banking Services and Investments

Question 17

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 17

Securities and Exchange Commission

Question 18

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 18

self-regulatory organization