Chapter Three

Question 1

Who are the federal regulators

Answer 1

OSFI and CDIC

Question 2

What does OSFI do

Answer 2

It is a regulated body for all Federally regulated financial institutions

Question 3

What do CDIC stand for

Answer 3

Canada deposit insurance Corporation

Question 4

What does CDIC do

Answer 4

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

Question 5

What does CDIC insure eligible deposits up to

Answer 5

100,000

Question 6

What accounts and products are insured by CDIC

Answer 6

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

Question 7

Who does CDIC not cover

Answer 7

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

Question 8

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

Answer 8

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

Question 9

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

Answer 9

AMF

Question 10

What is the mission off the CSA

Answer 10

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

Question 11

What are SROs

Answer 11

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

Question 12

Name two SROs

Answer 12

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

Question 13

What is OSFI

Answer 13

Office of the superintendent of financial institutions

Question 14

What does IIROC do

Answer 14

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

Question 15

Need the four roles that IIROC plays

Answer 15

Financial compliance, business conduct compliance, registration, enforcement

Question 16

What does IIAC stand for

Answer 16

Investment industry Association of Canada

Question 17

What does the IIAC do

Answer 17

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

Question 18

What does MFDA stand for

Answer 18

Mutual funds dealer association

Question 19

What does MFDA do

Answer 19

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

Question 20

What does CIPF stand for

Answer 20

Canadian investor protection fund

Question 21

What is the primary and secondary roles of the CIPF

Answer 21

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

Question 22

Describe CIPF coverage

Answer 22

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

Question 23

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

Answer 23

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

Question 24

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

Answer 24

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

Question 25

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

Answer 25

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

Question 26

What is OBSI

Answer 26

Ombudsman for banking services and investments

Question 27

What does OBSI do

Answer 27

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

Question 28

What is the general principle underlying Canadian securities legislation

Answer 28

Is full, true and plain disclosure

Question 29

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

Answer 29

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.

Question 30

What must a sales manager complete

Answer 30

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

Question 31

What is the national registration database

Answer 31

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

Question 32

What is a relationship disclosure

Answer 32

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

Question 33

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

Answer 33

A relationship disclosure document

Question 34

What is the definition of window dressing

Answer 34

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

Question 35

What is the definition of bucketing

Answer 35

Confirming a transaction where no trade has been executed

Question 36

What is front running

Answer 36

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

Question 37

What does DNCL stand for

Answer 37

Do not call list

Question 38

What does the DNCL rules prohibit

Answer 38

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

Question 39

What is the right of withdrawal

Answer 39

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

Question 40

What are the three statutory rights for investors

Answer 40

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

Question 41

What is right of rescission

Answer 41

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

Question 42

How many days for the right off with rescission

Answer 42

Within 180 days

Question 43

What is the rights of action for damages

Answer 43

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

Question 44

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

Answer 44

The ballot is automatically cast with the managements view point

Question 45

What is a takeover bid

Answer 45

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

Question 46

What are the takeover bid rules - four items

Answer 46

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.

Question 47

When are take over bids exempt

Answer 47

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.

Question 48

How are insiders generally defined as

Answer 48

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.