CSC Chapter 3 Flashcards
(39 cards)
Who protects clients if the bank goes bankrupt
CDIC on insurable deposits up to $100,000
What is a client loses money because an investment firm goes bankrupt? Who would protect them?
CIPF (Canadian Investor Protection Fund) eligible for up to $1 million in coverage
What if the investment declines in value, is there any protection?
No protection
Which activity is required for the Gatekeeper role?
Collect client information that is accurate and complete
Jagmeet is unhappy with the way he has been treated by his IA. He feels he lost close to $400,000 due to trades suggested by his IA. He has been unable to resolve this with the IA or his IA’s firm and has asked for arbitration. Neither his IA nor the IA’s firm are willing to agree to arbitration. How will this be resolved?
The IA’s firm is obliged to accept arbitration
Shelly has just been hired by an investment firm. Identify what she has to do to register in order to begin working with the investing public.
Register through the National Registration Database (NRD)
Identify the general principle underlying Canadian Securities Legislation
Full, true and plain disclosure
Eva feels that her IA and the dealer have not adequately resolved her issue. She does not want to incur the costs of pursuing the matter in the courts but does want restitution of her funds in a way that is binding on the firm. What can Eva do?
Request Arbitration
Eva asks, “Who would help me as an investor if there is a dispute with my investment dealer?” What response should Eva receive from her IA?
OBSI (Ombudsman for Banking Services and Investments)
How much protection does an investor get?
Cash, Margin, Short Sale, Options, Futures and foreign currency accounts are combined and treated as a single general account that’s covered up to $1 Million. Other accounts, such as registered accounts and trusts are generally treated separately and each covered up to $1 Million, though some types of separate accounts may be combined.
Office of the Superintendent of Financial Institutions (OSFI)
Federal regulatory agency whose main responsibilities regarding insurance companies and segregated funds are to ensure that the companies issuing the funds are financially solvent.
gatekeeper
Role of dealers and all of their employees who are responsible for protecting the markets from potentially illegal client activities; Universal Market Integrity Rules set out specific rules.
National Registration Database (NRD)
A web-based system that permits mutual fund salespersons and investment advisors to file applications for registration electronically.
investment representative
A person who is licensed to sell securities but is not permitted to give investment advice.
front running
Making a practice, directly or indirectly, of taking the opposite side of the market to clients, or effecting a trade for the advisor’s own account before effecting a trade for a client.
Ombudsman for Banking Services and Investments (OBSI)
Independent organization that investigates customer complaints against financial services providers.
full, true, and plain disclosure
The general principle underlying Canadian securities legislation. All pertinent facts by those offering securities for sale to the public must be disclosed.
Canadian Investor Protection Fund (CIPF)
Protects eligible customers in the event of the insolvency of an SRO dealer member.
Canadian Securities Administrators (CSA)
Forum for the 13 securities regulators of Canada’s provinces and territories to co-ordinate and harmonize the regulation of the Canadian capital markets.
arbitration
A method of dispute resolution in which an independent arbitrator is chosen to assist aggrieved parties recover damages.
self-regulatory organization (SRO)
Recognized by Securities Administrators, with powers to establish and enforce industry regulations to protect investors and to maintain fair, equitable, and ethical practices in the industry.
National Do Not Call List
A list, administered by the CRTC, where Canadians can register their telephone numbers to prohibit telemarketers and clients of telemarketers from calling the number.
Canada Deposit Insurance Corporation (CDIC)
A federal Crown Corporation providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails.
Autorité des marchés financiers (AMF)
Administers the regulatory framework surrounding Québec’s financial sector including securities, distribution of financial products and services, and financial institutions.
