Chapter Three Flashcards
Who are the federal regulators
OSFI and CDIC
What does OSFI do
It is a regulated body for all Federally regulated financial institutions
What do CDIC stand for
Canada deposit insurance Corporation
What does CDIC do
It is a federal Crown corporation that provides deposit insurance and contributions to the stability of Canada’s financial system
What does CDIC insure eligible deposits up to
100,000
What accounts and products are insured by CDIC
Savings and checking accounts, GICs and term deposits that mature in five years or less, money orders, certified checks, travelers checks and bank drafts, accounts that hold Realty taxes on mortgaged properties
Who does CDIC not cover
Mutual funds and stocks, GICs on term deposits that mature in more than five years, bonds and T-bills debentures issued by government, corps or banks and deposits held in foreign-currency
What categories are there that CDIC will cover you more than 100,000 in deposits
Accounts in one name, jointly in more than one name, in a trust account, in a registered savings plan, in a registered retirement fund, in a mortgage tax account
Who is responsible for administering the regulatory framework for the Quebec financial sector
AMF
What is the mission off the CSA
Is to give Canada a securities regulated system that the protect investors from unfair improper or fraudulent practices and that foster fair efficient and vibrant capital markets
What are SROs
They are private industry organizations that have been granted the privilege of regulating their own members by the provincial regulatory bodies
Name two SROs
The investment industry regulatory organization of Canada and the mutual funds dealer Association
What is OSFI
Office of the superintendent of financial institutions
What does IIROC do
Enforce these rules regarding proficiency business and financial conduct often amend the fans and the registered employees through setting and enforcing market integrity rules regarding trading activity
Need the four roles that IIROC plays
Financial compliance, business conduct compliance, registration, enforcement
What does IIAC stand for
Investment industry Association of Canada
What does the IIAC do
Member base association that represents the investment industry views and interests to federal and provincial governments and their agencies and to other SROs
What does MFDA stand for
Mutual funds dealer association
What does MFDA do
It is responsible for regulating the distribution and sales of mutual funds by its members. They have the ability to admit members to audit to enforce rules and apply penalties
What does CIPF stand for
Canadian investor protection fund
What is the primary and secondary roles of the CIPF
Primary role is investor protection and secondary role is overseeing the self regulatory system
Describe CIPF coverage
Coverage provides general account limit to 1 million losses related to securities and cash balances. Separate accounts of customers are each entitled to the maximum coverage of 1 million unless they are combined with other separate accounts
How long do you customers have to find a claim to CIPF
180 days it commences on the date of bankruptcy if applicable or the date of insolvency
What is the MFDA investor protection Corporation and what is the coverage that they provide
Mutual funds dealer association investor protection Corporation provides protection for eligible customers of insolvent MFDA member firms. Coverage provided is limited to 1 million a customer account for losses related to securities, cash balances, segregated funds and certain other property held in the account of a MFDA member firm
To be eligible for arbitration the dispute must meet the what criteria
Attempts must’ve been made to resolve the dispute with the investment dealer and the claim cannot exceed 100,000
What is OBSI
Ombudsman for banking services and investments
What does OBSI do
It is an independent organization that investigates customer complaints against financial services providers including banks and other deposit taking organizations investment dealers mutual fund dealers and mutual fund companies
What is the general principle underlying Canadian securities legislation
Is full, true and plain disclosure
What’s your new investment advisors have to complete for training
CSC, CPH, also complete 90 day training program. After licensing registrants are subject to a six-month supervision. New registrants must also complete wealth management essentials course within 30 months.
What must a sales manager complete
Branch managers course and within 18 months complete the effective management seminars
What is the national registration database
It is a web-based system used by investment dealers and employees to file registration forms electronically when applying for approval by any one of the stock exchanges, the CSA or IIROC
What is a relationship disclosure
It is a document that outlines the account relationship and services to be provided to the client.
What must a investment dealer have to provide to the clients to better inform them off the nature of their accounts
A relationship disclosure document
What is the definition of window dressing
Deliberately causing the last sale of the day in a security to be higher than warranted
What is the definition of bucketing
Confirming a transaction where no trade has been executed
What is front running
Making a practice of effecting the trade for the advisors own account prior to effecting the trade for a client
What does DNCL stand for
Do not call list
What does the DNCL rules prohibit
Prohibits telemarketers and clients of telemarketers from calling phone numbers that have been registered on the DNCL for more than 31 days
What is the right of withdrawal
The client has the right of withdrawal from an agreement to purchase securities within two business days after receipt or deemed receipt of a prospectus and any amendment by giving notice to the vendor or his agent
What are the three statutory rights for investors
Right off withdrawal, right of rescission, right of action for damages.
What is right of rescission
Two rescind or cancel a contract for the purchase of securities, if the prospectus or amended prospectus offering the security contains a misrepresentation
How many days for the right off with rescission
Within 180 days
What is the rights of action for damages
It can apply to an expert such as an auditor lawyer geologist or appraiser who’s report contained misrepresentation on the prospectus
What happens if the shareholder does not vote or leaves the item on the proxy form unmarked
The ballot is automatically cast with the managements view point
What is a takeover bid
An offer to the shareholders of the company to purchase the shares that will exceed 20% of the outstanding voting securities off that company
What are the takeover bid rules - four items
The takeover bid must be sent to all shareholders. The offerer should deliver a takeover bid circular. A directors circular must be sent to the security holders of the target company within 15 days of the date of the bid. Any securities taken up by the offerer under the bid must be paid for within three business days.
When are take over bids exempt
It is made through the facilities of the exchange in accordance of the bylaws off the exchange. It involves acquisition which do not aggregate more than 5% of the securities of the class within a 12 month period. It is offered by way of private agreement with 5 or fewer holders at a price not exceeding 115% off the market price. It is an offer to purchase shares in a private company.
How are insiders generally defined as
A director or senior officer of the company. A person or company beneficially owning directly or indirectly more than 10% of voting shares of the company. A director or senior officer of the company which in itself an insider of the company due to ownership, control or direction over more than 10% of the voting shares of the company involved.
