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Canadian Securities Course > Chapter Three > Flashcards

Chapter Three Flashcards

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SIE Exam flashcards
1
Q

Who are the federal regulators

A

OSFI and CDIC

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2
Q

What does OSFI do

A

It is a regulated body for all Federally regulated financial institutions

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3
Q

What do CDIC stand for

A

Canada deposit insurance Corporation

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4
Q

What does CDIC do

A

It is a federal Crown corporation that provides deposit insurance and contributions to the stability of Canada’s financial system

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5
Q

What does CDIC insure eligible deposits up to

A

100,000

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6
Q

What accounts and products are insured by CDIC

A

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

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7
Q

Who does CDIC not cover

A

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

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8
Q

What categories are there that CDIC will cover you more than 100,000 in deposits

A

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

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9
Q

Who is responsible for administering the regulatory framework for the Quebec financial sector

A

AMF

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10
Q

What is the mission off the CSA

A

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

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11
Q

What are SROs

A

They are private industry organizations that have been granted the privilege of regulating their own members by the provincial regulatory bodies

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12
Q

Name two SROs

A

The investment industry regulatory organization of Canada and the mutual funds dealer Association

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13
Q

What is OSFI

A

Office of the superintendent of financial institutions

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14
Q

What does IIROC do

A

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

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15
Q

Need the four roles that IIROC plays

A

Financial compliance, business conduct compliance, registration, enforcement

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16
Q

What does IIAC stand for

A

Investment industry Association of Canada

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17
Q

What does the IIAC do

A

Member base association that represents the investment industry views and interests to federal and provincial governments and their agencies and to other SROs

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18
Q

What does MFDA stand for

A

Mutual funds dealer association

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19
Q

What does MFDA do

A

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

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20
Q

What does CIPF stand for

A

Canadian investor protection fund

21
Q

What is the primary and secondary roles of the CIPF

A

Primary role is investor protection and secondary role is overseeing the self regulatory system

22
Q

Describe CIPF coverage

A

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

23
Q

How long do you customers have to find a claim to CIPF

A

180 days it commences on the date of bankruptcy if applicable or the date of insolvency

24
Q

What is the MFDA investor protection Corporation and what is the coverage that they provide

A

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

25
Q

To be eligible for arbitration the dispute must meet the what criteria

A

Attempts must’ve been made to resolve the dispute with the investment dealer and the claim cannot exceed 100,000

26
Q

What is OBSI

A

Ombudsman for banking services and investments

27
Q

What does OBSI do

A

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

28
Q

What is the general principle underlying Canadian securities legislation

A

Is full, true and plain disclosure

29
Q

What’s your new investment advisors have to complete for training

A

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.

30
Q

What must a sales manager complete

A

Branch managers course and within 18 months complete the effective management seminars

31
Q

What is the national registration database

A

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

32
Q

What is a relationship disclosure

A

It is a document that outlines the account relationship and services to be provided to the client.

33
Q

What must a investment dealer have to provide to the clients to better inform them off the nature of their accounts

A

A relationship disclosure document

34
Q

What is the definition of window dressing

A

Deliberately causing the last sale of the day in a security to be higher than warranted

35
Q

What is the definition of bucketing

A

Confirming a transaction where no trade has been executed

36
Q

What is front running

A

Making a practice of effecting the trade for the advisors own account prior to effecting the trade for a client

37
Q

What does DNCL stand for

A

Do not call list

38
Q

What does the DNCL rules prohibit

A

Prohibits telemarketers and clients of telemarketers from calling phone numbers that have been registered on the DNCL for more than 31 days

39
Q

What is the right of withdrawal

A

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

40
Q

What are the three statutory rights for investors

A

Right off withdrawal, right of rescission, right of action for damages.

41
Q

What is right of rescission

A

Two rescind or cancel a contract for the purchase of securities, if the prospectus or amended prospectus offering the security contains a misrepresentation

42
Q

How many days for the right off with rescission

A

Within 180 days

43
Q

What is the rights of action for damages

A

It can apply to an expert such as an auditor lawyer geologist or appraiser who’s report contained misrepresentation on the prospectus

44
Q

What happens if the shareholder does not vote or leaves the item on the proxy form unmarked

A

The ballot is automatically cast with the managements view point

45
Q

What is a takeover bid

A

An offer to the shareholders of the company to purchase the shares that will exceed 20% of the outstanding voting securities off that company

46
Q

What are the takeover bid rules - four items

A

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.

47
Q

When are take over bids exempt

A

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.

48
Q

How are insiders generally defined as

A

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.

Canadian Securities Course (6 decks)

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