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| Section | Weight | Objectives |
|---|---|---|
| Prospective client relationships | 10% | - Institutional client qualification - Account agreements and welcome documentation - Retail client information and risk profile - Investment Dealer onboarding process - Third parties and professional advisers - Retail and institutional clients - Costs, fees, turnover and taxes - Client relationship model - Client recordkeeping - Accredited investors and exemptions |
| Overview of Canadian securities regulatory framework | 10% | - Anti-money laundering requirements - Marketplaces and trading venues - Criminal Code and financial crime - Role and authority of the Canadian Investment Regulatory Organization - Canadian Investor Protection Fund - Investment Dealer registration and individual approval requirements - Clearing agencies - Role and authority of the Canadian Securities Administrators and provincial/territorial securities and derivatives regulators - Other investment industry regulators and agencies - Bank Act and Bankruptcy and Insolvency Act - Confidentiality, privacy, anti-spam and shareholder rights legislation |
| Scope of client relationships | 15% | - Trust, agency and fiduciary duty - Institutional Investment Dealer services - Investment Representative role and client service - Institutional client sophistication and suitability exemptions - Product due diligence - Account appropriateness - Suitability exemptions - Investment management styles and strategies - Registered Representative role and client service - Escalation to subject matter experts - Know-your-product requirements - Client suitability determination - Relationship disclosure - Investment performance benchmarks - Account appropriateness versus suitability - Clients residing in the United States and other foreign jurisdictions - Retail Investment Dealer services |
| Securities, managed products, mutual funds and other investments | 19% | - Equity investment considerations - Managed product investment considerations - Fixed income investment considerations - Equities - Managed products - Other investments - Market indices - Fixed income securities and products - Asset classes - Mutual funds - Pooled products - Exchange-traded funds |
| Derivatives | 5% | - Futures, forwards, swaps and contracts for difference - Derivative account administration - Prohibited derivative trading practices - Listed and over-the-counter derivatives markets - Options - Uses of derivatives - Transactional elements of futures and options - Derivative trading strategies |
| Client complaint handling and reporting | 5% | - Settlement agreements with clients - Client recourse options - Client issues and potential liability - Complaint policies, procedures and recordkeeping - CIRO and provincial regulator roles in complaint handling - Investment Dealer complaint reporting obligations - Investment Dealer obligations to clients |
| Conflicts of interest and ethics | 15% | - Cybersecurity and confidential information - CIRO and other ethical standards - Ethical principles and standards of conduct - Ethical and legal responsibilities to clients - Outside activities of Approved Persons - Managing conflicts of interest - Conflict identification, avoidance, addressing and disclosure - Personal financial dealings with clients - Information barriers and restricted lists - Positions of influence - Client confidentiality - Ethics and regulatory rules |
| Market and company analysis | 8% | - Company regulation, disclosure and investor rights - Company performance analysis - Economic information and indicators - Macroeconomic effects on financial markets - Macroeconomic factors and policies - Market theories and stock market behaviour - Technical and statistical analysis tools - Basic economic theories - Industry performance analysis |
| Market integrity, trade execution and settlement | 12% | - UMIR gatekeeping obligations - Universal Market Integrity Rules - Order entry, trade processing, settlement and delivery - Derivative trading agreements - Margin requirements - Account types - Order confirmation requirements - Order variations, cancellations and corrections - Investment banking, research and corporate finance - Gatekeeping for manipulative and deceptive practices - Order types - Reporting obligations |
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NEW QUESTION # 96
An Investment Dealer rewards Registered Representatives (RRs) when they meet monthly goals for asset accumulation. An RR is close to achieving a key threshold and offers to rebate management fees for 3 months if a new client signs on. The RR has not notified the Investment Dealer of this arrangement. Has the RR done anything wrong?
Answer: B
Explanation:
The correct answer is D . The RR has entered into an unauthorized financial arrangement affecting client fees without first obtaining the Investment Dealer's knowledge and approval. An individual representative cannot independently modify, rebate or personally negotiate Dealer-related compensation arrangements simply to secure new assets. CIRO's personal-financial-dealings framework prohibits employees and Approved Persons from engaging directly or indirectly in improper personal financial dealings with clients and requires Dealer involvement and approval where specified arrangements arise.
There is also a significant compensation-related conflict of interest . The RR is close to an asset- accumulation threshold, creating a personal financial incentive to attract the new client. CIRO and CSA specifically identify compensation programs based on sales targets, net new assets or new clients as arrangements capable of creating material conflicts that firms must identify and address in clients' best interests.
A is incorrect because a client's short-term financial benefit does not authorize the RR to bypass Dealer supervision. B is incorrect because the existence of legitimate firm-approved rebate programs does not permit an individual RR to create one independently. C misses the regulatory issue: equal availability to other clients would not cure the lack of Dealer authorization or the incentive conflict.
Study Guide Reference: CIRE Element 9 - conflicts of interest, compensation-related conflicts and personal financial dealings; IDPC Rules 3111-3115.
NEW QUESTION # 97
A shareholder in Canada receives a dividend payment from a Canadian corporation. Which of the following best describes how dividends are typically received in Canada?
Answer: C
Explanation:
The correct answer is C . For publicly traded Canadian securities, dividends are commonly distributed as cash entitlements . Where shares are held through an Investment Dealer or brokerage, the cash dividend is ordinarily credited through the securities-depository and intermediary system to the investor's account. CDS, Canada's securities depository, explains that securities entitlements are distributed to its participants on the payment date, and its corporate-action services expressly include cash dividends.
The shareholder does not normally have to submit a claim. Once the board declares a dividend, entitlement is determined using the applicable record date and payment date. Canadian investor education also notes that dividends are most often paid as quarterly cash payments , although stock dividends may occasionally be used.
A is incorrect because automatic reinvestment occurs only where a Dividend Reinvestment Plan (DRIP) or similar arrangement has been elected; cash payment is otherwise the normal treatment. B incorrectly suggests shareholders must affirmatively claim each dividend. D is incorrect because shareholders do not routinely choose a cash-and-stock combination for every distribution; the form of dividend depends on the issuer's declaration and any specific reinvestment or election program.
The CIRE syllabus expressly requires knowledge of "how dividends are declared, received and taxed." Study Guide Reference: CIRE Element 7.3 - equities and shareholder considerations, including dividend declaration, receipt and taxation.
NEW QUESTION # 98
A trader expects the price of a stock to rise and wants to use a bullish strategy in options trading.
Which of the following strategies should the trader use?
Answer: D
Explanation:
The correct answer is C . Buying a call option , also known as taking a long-call position, is the fundamental directional options strategy for an investor who expects the underlying security's price to rise. A call gives its holder the right, but not the obligation, to buy the underlying asset at the specified strike price within the applicable exercise period. CIRO's investor materials expressly define a call as the right to buy an asset at a specified price within a specified time.
If the stock price rises sufficiently above the strike price, the call generally becomes more valuable because the holder possesses the right to purchase the shares at the lower contractual price. The buyer's maximum contractual loss is generally limited to the premium paid, while the potential gain increases as the underlying price rises above the strike price and break-even level.
A and D are conventionally bearish positions: selling an uncovered call benefits principally when the price fails to rise materially, while buying a put benefits from declining prices. Selling a put can also represent a bullish strategy , because the writer benefits if the stock stays above the strike price; however, when an examination asks for the basic direct bullish options position associated with an expected price increase, the canonical answer is buying a call .
The CIRE syllabus explicitly requires knowledge of puts and calls and bullish, bearish, neutral and income- producing options strategies .
Study Guide Reference: CIRE Elements 8.1 and 8.6 - puts and calls; bullish derivative strategies.
NEW QUESTION # 99
What is the purpose of an Investment Dealer obtaining the contact information of a trusted contact person?
Answer: C
Explanation:
The correct answer is D . A Trusted Contact Person (TCP) is a protective mechanism designed to help an Investment Dealer respond to specified concerns involving a client, particularly possible financial exploitation or concerns about the client's mental capacity to make financial decisions. Current IDPC Rule 3202 requires the Dealer to take reasonable steps to obtain the TCP's name and contact information and the client's written consent permitting contact for prescribed purposes. These include concerns about possible financial exploitation , mental capacity, the identity of a legal representative and the client's current contact information.
CIRO emphasizes that naming a TCP does not transfer authority over the account . The TCP cannot make transactions, make investment decisions or automatically access confidential account information. Instead, the TCP provides a person whom the Dealer is authorized to contact when specified protective concerns arise.
A is therefore incorrect because the TCP does not override the client's decision-making authority. B confuses a TCP with a legal representative or attorney under a power of attorney. C is incorrect because the Dealer does not obtain investment recommendations from the TCP; suitability and investment decisions remain governed by the client relationship and applicable Dealer obligations.
The TCP requirement forms part of CIRO's broader KYC and vulnerable-client protection framework.
Study Guide Reference: CIRE Elements 2.6-2.7 - KYC, third parties and trusted contact persons; IDPC Rule 3202(4).
NEW QUESTION # 100
When must an Investment Dealer consult with a client's trusted contact person?
Answer: D
Explanation:
The correct response is A . Under CIRO's Know-Your-Client requirements, a Dealer Member must take reasonable steps to obtain the name and contact information of a trusted contact person (TCP) , together with the client's written consent permitting contact. IDPC Rule 3202(4) provides for contact with the TCP regarding specified protective matters, including "possible financial exploitation of the client" and concerns about the client's mental capacity as it relates to making financial decisions. A therefore identifies the prescribed circumstances relevant to TCP contact.
A TCP is a protective contact, not a substitute decision-maker, attorney under a power of attorney, or person automatically authorized to direct transactions. Contact remains governed by the client's written consent and the limited purposes specified in the rule. D is therefore incorrect: routine account-performance information is not disclosed merely to obtain an objective opinion. B is incorrect because missing KYC information is addressed through KYC, documentation, account-opening and account-restriction procedures rather than by consulting the TCP. C is incorrect because disagreement with a competent client's investment decision is not itself a TCP-contact purpose.
The CIRE syllabus specifically identifies the trusted contact person as a third party whose role an Investment Dealer must understand, identify and document.
Study Guide Reference: CIRE Element 2.7 - role of third parties and trusted contact persons; IDPC Rule 3202(4).
NEW QUESTION # 101
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