Chapter Two - The Canadian Securities Industry Flashcards
What are SRO’s?
Self-regulatory organizations - they establish and enforce industry regulations to protect investors and to maintain fair, equitable, and ethical practices.
What are the names of the organization that settle trades and other transactions?
CDS - clearing and depository services inc. and Banks
What is the CIPF?
Canadian Investor Protection Fund - organizations that provide insurance against insolvency
IIROC stand for?
Investment Industry Regulatory Organization of Canada
What does the term intermediary mean?
this term describes any organization that facilitates the trading or movement of the financial instruments that transfer capital between suppliers and users.
What are the 3 types of firms that make the Canadian Securities Industry ?
Integrated Firms, Institutional Firms, and Retail Firms
What are integrated firms?
They are firms that offer products and services that cover all aspects of the industry - full participation in retail and institutional markets
institutional firms? look me up..
specialize in stock trading, bond trading , research on particular industries, trade ONLY with institutional clients
What are Retail Firms?
remainder of the industry . they include full service firms and discount brokers.
Investment Dealers can act as Principle or Agent. Explain the difference
Principle- securities firm owns securities as part of its own inventory. The diff between buying and selling prices is the dealer’s gross proft.
Agent- the broker acts for or on behalf of a buyer or a seller but does not own title. Brokers profit is agents commission charged for each transaction.
What is underwriting?
aka financing - the purchase from a government body or a company of a new issue of securities on a given date at a specified price.
What is a broker?
When acting as a broker, a securities firm is an agent in a secondary securities transaction. A broker acts as the agent and never owns the securities themselves.
- the term may also be used for investment dealers acting as a principal or an agent.*
What is CDS?
In Canada, securities are cleared through CDS - Clearing and Depository Services Inc.
(banks, investment dealers and trust companies)
Describe the term intermediary?
Used to describe any organization that facilitates the trading or movement of the financial instruments that transfer capital between suppliers and users.
What are schedule I banks?
they are the giants of the capital market. There are 23 Schedule I Banks.
Describe the term “Chinese Walls”
The control that inhibit information sharing between various business units are commonly known as this.
What are Schedule II Banks?
they are incorporated and operate in Canada as federally regulated foreign bank. Greatest revenue from retail banking.
What are Schedule III Banks?
are federally regulated foreign bank branches of foreign institutions that have been authorized under the Bank Act to do banking business in Canada.
True or False: Trust Companies are the only corporations in Canada authorized to engage in a trust business (i.e. to act as a trustee in charge of corporate or individual assets such as property, stocks and bonds)
True
What provinces are credit unions most predominant in?
Ontario, Saskatchewan and British Columbia
What is a caisses populaires?
“people’s bank”- This is what a credit union is called in Quebec
In regards to Credit Unions- The Cooperate Credit Associations Act enforces they use what approach?
‘prudent portfolio’ approach?
The Canadian Insurance Industry includes?
Agents, Appraisers and Adjusters
Two main businesses of Insurance are ?
Life Insurance and Property & Casualty Insurance.
Life Insurance include insurance against?
Loss of life, livelihood or health, disability insurance, term and whole life insurance, pension plans, RRSPs and annuities.
What does Property & Casualty Insurance encompass?
protection against loss of property, including home, auto and commercial business insurance.
Historically, Life Insurance companies have invested their funds in what type of securities?
high yielding, longer-term securities.
What is underwriting operations?
most important aspect of insurance business- it is evaluating the risk an insurance company is willing to take from a client in exchange for insurance premiums , followed by acceptance of the associated responsibility for fulfilling the terms of the contract.
Insurance regulation is controlled by what?
Insurance Companies Act
