CSC Chapter 1 Flashcards
Acts as an intermediary by matching Investors with users of capital
Investment Dealer
Sets and enforces rules that govern market activity and monitors the market to ensure fairness and transparentcy
Self-regulatory Organization (SRO)
Oversees the market and the canadian investment regulatory organization
Provincial Regulators
The place where suppliers and users of capital trade financial instruments
Financial Market
The irrevocable moment where cash and securities are exchanged
Settlement
the process of confirming and matching security trade details
clearing
Identify the correct statement when the investment dealer is acting as an agent
Does not own the securities that are being bought or sold
Identify the function a securities firm performs when underwriting new issues
Principal
Identify the market a dealer uses to purchase existing securities for its inventory
Secondary
Identify the type of process used to settle trades between member brokers, trading on the TSX
Trades are netted out through a central clearing system
Identify the types of firms that serve both retail and institutional clients with a complete offering of products and services
Integrated
Identify the types of activities a Schedule II bank engages in
The same types of business as Schedule I banks
Identify an activity of a trust company
Can act as trustees in charge of individual assets
Identify the most important activity of the insurance business
Underwriting
Identify the activity of a sales finance company
Purchase instalment sales contracts from retailers
What is an institutional firm
an investment dealer that serves organizations that trade large volumes of securities. Clients typically include mutual funds, pension funds, and insurance companies
what is the focus of retail firms
offer a variety of products and services to retail investors (people). they also provide various levels of advice, depending on the clients circumstances
What is a self directed broker
execute trades for clients at reduced rates, but they do not provide investment advice
What is the primary market
When issues are brought to the market for the first time they are sold on the primary market
What is the secondary market
like the stock exchange, where investors trade previously issued shares
What is an Agent
someone who facilitates trades but does not own title to the securities at any time during the transaction
What functions do the middle office and back offices handle
middle office handles compliance, accounting, and auditing.
Back office handles trade settlement
identify a characteristic of a large Schedule I bank voting shares
Single shareholder or group of shareholders may own up to 20%
Identify the action of a dealer as principal in an underwriting.
Purchase the issue anticipating to resell at a profit
select the term that is used to refer to the controls that inhibit information sharing between various businesses and business units
Firewall
Identify the type of investment fund that continually issues shares to investors and redeems these shares on demand
Mutual Fund
Identify the federally regulated foreign bank subsidiaries that have been authorized under the bank act to do banking business in Canada
Schedule II banks
Indicate the role that an investment dealer is taking when the firm does not assume ownership of securities at some stage in the buying and selling transaction with investors
Agent
Identify the term used to refer to the difference between what banks pay as interest on deposits and what they charge as interest on loans
Spread
Kai, a very successful and knowledgeable investor, has inherited $200,000 and wants to create a diversified portfolio while minimizing costs. What is the type of investment firm that is best suited for these clients
Self-directed broker
A large furniture store wants to sell its consumer instalment contracts to generate cash. Determine the financial intermediary the store should contact
Sales finance company
Which department is responsible for the portfolio management activities in a securities firm
Front office
Identify the process by which the number of securities and the amount of cash that has to change hands among the various exchange members each day is substantially reduced
Netting
Identify the investment service that features portfolios created using algorithms based on modern portfolio theory and online client questionnaires
Robo-advisor
Tim’s firm develops more efficient online financial planning applications for investors and investment advisors. Identify the type of firm Tim owns
Fintech
ABC securities offers a wide range of products and services to both retail and institutional clients, as well as underwriting bon and equity issues. Determine the category of firm ABC belongs to
Integrated
XYZ Investments, an investment dealer, regularly takes positions in DEF Inc, a TSX listed equity, with a goal of improving liquidity in DEF while smoothing out unwarranted price fluctuations. Identify the role XYZ likely plays in the stock market
Market maker
