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Canadian Securities (CSC) Test #1 Exam Questions And Answers 2023
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Canadian Securities (CSC) Test #1 Exam Questions And Answers 2023
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Canadian Securities (CSC) Test #1 ExamQuestions And Answers 2023
Retail firms - correct answer-full service and discount brokerage firms for individuals.
Institutional firms - correct answer-includes pension funds, mutual funds, and insurance
companies.
Integrated firms - correct answer-contains all aspects of retail and institutional firms.
Front office - correct answer-in charge of portfolio management, marketing, sales, and
trading.
Middle office - correct answer-in charge of compliance, accounting, audits, and legal.
Back office - correct answer-in charge of settlements and clearing.
Schedule I banks - correct answer-large domestic banks. There are ownership
restrictions on shares - must be widely held.
Schedule II banks - correct answer-large foreign banks. Can do same activities as
domestic banks.
Schedule III banks - correct answer-foreign branches of banks. They are limited, with a
more institutional focus.
Trust company - correct answer-acts as a trustee.
Auction market - correct answer-market in which securities are bought and sold by
brokers acting as agents for their clients (stock exchanges).
Dealer market - correct answer-a network of marketplaces. Here, trades are conducted
OTC and consist of bonds and debentures.
Equity electronic trading system - correct answer-competes with existing exchanges.
They can only trade stocks that are on an existing exchange. They may have benefits
such as different hours, better commission, etc.
Fixed-income electronic trading system - correct answer-where almost all bonds are
traded (such as CanDeal).
Structured product - correct answer-has the characteristics of debt, equity, and the
investment fund (can be in the form of principal-protected notes or index-linked
guarantees).
, IIROC (Investment Industry Regulatory Organization of Canada) - correct answer-the
Canadian investment industry's SRO. It carries out its responsibilities through setting
and enforcing rules regarding the proficiency, business, and financial conduct of dealer
firms and their registered employees.
MFDA (Mutual Fund Dealers Association) - correct answer-the SRO that regulates the
distribution (dealer) side of the mutual fund industry in Canada.
OSFI (Office of the Superintendent of Financial Institutions) - correct answer-the federal
regulatory agency whose main responsibilities regarding insurance companies and
segregated funds are to ensure that the companies issuing the funds are financially
solvent.
CDIC (Canadian Deposit Insurance Corporation) - correct answer-a federal Crown
Corporation providing deposit insurance against loss (up to $100,000 per depositor)
when a member institution fails.
CIPF (Canadian Investor Protection Fund) - correct answer-a fund that protects eligible
customers in the event of the insolvency of an IIROC dealer member.
General acct. = $1M total
Separate acct. = $1M each
MFDA IPC (Mutual Fund Dealers Association Investor Protection Corporation) - correct
answer-provides protection for eligible customers of insolvent MFDA member firms.
General acct. = $1M total
Separate acct. = $1M each
Gatekeeper - correct answer-protects markets from potentially illegal client activity by
collecting information, monitoring activity, and reporting suspicious behaviour.
"Know your client" rule - correct answer-salespersons must use diligence to learn
essential facts about the client (including every account and order) before entering into
the relationship, in order to make appropriate decisions for the client.
Ombudsman for Banking Services and Investments (OBSI) - correct answer-an
independent organization that investigates customer complaints against financial
services providers (non binding, but may hurt the company's reputation if it does not
comply).
Front running - correct answer-when a broker puts his own account's order in front of a
customer's order, knowing the customer's order will move prices so the broker can
make a profit.
National "Do not call" List (DNCL) - correct answer-prohibits telemarketers from calling
any number on the list that has been registered for 31+ days.
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