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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Conflicts of interest and ethics | 15% | - Inappropriate or prohibited personal financial dealings with clients - Conflicts of interest management process - Client confidentiality policies and procedures - Importance of managing conflicts of interest - Requirements regarding positions of influence - Ethical and legal responsibilities to clients - Ethical principles and standards of conduct for Approved Persons and Investment Dealers - Information controls, barriers, firewalls and restricted lists - Role of cybersecurity in protecting confidential information - Importance of ethics and its relationship to rules - Activities outside an Investment Dealer - CIRO and other ethical standards of conduct |
| Topic 2: Overview of Canadian securities regulatory framework | 10% | - Criminal Code and its application to financial crime - Function and purpose of investment industry marketplaces - Purpose and implications of the Bank Act and Bankruptcy and Insolvency Act - Anti-money laundering and anti-terrorist financing legislation and regulations - Function and purpose of clearing agencies - Function and purpose of other investment industry regulators and agencies - Other applicable laws including confidentiality, privacy, anti-spam, company disclosure and shareholder rights - Investment Dealer registration and individual approval requirements - Role and authority of the Canadian Securities Administrators and provincial and territorial securities and derivatives regulators - Role and authority of the Canadian Investment Regulatory Organization - Function and purpose of the Canadian Investor Protection Fund |
| Topic 3: Market and company analysis | 8% | - Rules relating to companies - Economic indicators and sources of information - Factors influencing the macroeconomy - Technical and statistical analysis tools and information sources - Industry performance analysis - Basic market theories and stock market behaviour - Effects of macroeconomic factors on financial markets - Company performance analysis tools - Basic economic theories |
| Topic 4: Scope of client relationships | 15% | - Suitability determination requirements for retail clients - Systematic approaches to investment management and investment strategies - Exemptions from suitability determination requirements - Role of the Investment Representative in providing client service - Account appropriateness obligations - Institutional client sophistication assessment and suitability exemptions - Know-your-product obligations - Trust, agency and fiduciary duty - Requirements for working with clients in the United States and other foreign jurisdictions - Internal escalation procedures and subject matter experts - Purpose and content of relationship disclosure - Role of the Registered Representative in providing client service - Product due diligence obligations - Typical services provided by retail Investment Dealers - Typical services provided by institutional Investment Dealers - Investment performance benchmarks - Account appropriateness versus suitability determination |
| Topic 5: Client complaint handling and reporting | 5% | - Policies and procedures for reporting, handling and maintaining complaint records - Recourse available to dissatisfied clients - Role of CIRO and provincial regulators in the complaints handling framework - Investment Dealer complaint reporting obligations and penalties - Investment Dealer obligations to clients - Prohibited practices in client settlement agreements - Potential client issues, liability and consequences |
| Topic 6: Market integrity, trade execution and settlement | 12% | - Order variations, cancellations and corrections - Functions of investment banking, research and corporate finance - Order entry, trade management, settlement and delivery - Gatekeeping requirements for manipulative and deceptive practices, unacceptable activities and front running - Features of different account types - Specialized trading agreements for derivative accounts - Universal Market Integrity Rules - UMIR gatekeeping obligations - Features of different order types - Order confirmation requirements - Margin requirements - Reporting obligations to firms and regulators |
| Topic 7: Securities, managed products, mutual funds and other investments | 19% | - Types, features, risks and returns of equities - Other investments including hedge funds, structured products, alternative investment funds, crypto assets and ESG-related products - Considerations affecting exchange-traded fund investors - Considerations affecting equity investors and potential shareholders - Considerations affecting managed product investors - Types of pooled products - Features, risks and returns of managed products - Asset classes generally sold and traded at an Investment Dealer - Types, features, risks and returns of fixed income securities and products - Purpose and uses of market indices - Considerations affecting fixed income investors - Considerations affecting mutual fund investors |
| Topic 8: Derivatives | 5% | - Basic transactional elements of futures and options - Single and multi-legged derivative trading strategies - Listed versus over-the-counter derivative markets - Administrative requirements for derivative trading with clients - Prohibited derivative trading practices - Features of other derivative contract types - Features of options contract types - Basic uses of derivatives |
| Topic 9: Prospective client relationships | 10% | - Retail client information collection - Institutional client qualification requirements - Role of cost in product selection - Impact of fees, turnover and taxes on investment returns - Client relationship model - Exemptions under National Instrument 45-106 - Differences between retail and institutional clients - Investment Dealer onboarding process - Third parties and other professionals in the client's life - Required account agreement and Firm Welcome package documents - Client record documentation, filing and maintenance |
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NEW QUESTION # 23
What is the best course of action if an Investment Representative (IR) discovers a colleague engaging in what appears to be unethical behaviour?
Answer: B
Explanation:
The correct answer is A . An Investment Representative who observes conduct that appears unethical should escalate the matter through the Investment Dealer's established supervisory or compliance channels .
This allows appropriately authorized personnel to investigate the facts, preserve relevant records and determine whether corrective action or external regulatory reporting is required.
CIRO Rule 1402 requires Regulated Persons to maintain high standards of ethics and conduct, act openly and fairly, and avoid conduct that is unbecoming or detrimental to the public interest. CIRO's current trading- supervision guidance reinforces the broader principle that compliance is a firm-wide responsibility:
employees are expected to act on or escalate compliance issues , and the existence of a compliance department does not permit other employees to ignore suspected misconduct.
B is not ordinarily the first step merely because conduct appears unethical. Whether CIRO or another authority must subsequently be notified depends on the facts and applicable reporting rules; compliance and supervisory personnel determine and execute that process. C is inadequate because confronting the colleague could interfere with an investigation or permit evidence to be altered. D clearly conflicts with the ethical obligation to respond appropriately to suspected misconduct.
Where specific market-integrity violations are suspected, CIRO rules likewise require prompt reporting to a supervisor or compliance department.
Study Guide Reference: CIRE Elements 9.3-9.6 - ethical responsibilities, ethical decision-making and CIRO standards of conduct; IDPC Rule 1402.
NEW QUESTION # 24
What is the purpose of the Canadian Anti-Spam Legislation (CASL)?
Answer: C
Explanation:
The correct answer is D . Canada's Anti-Spam Legislation (CASL) establishes rules governing commercial electronic messages (CEMs) and is designed principally to protect Canadians and the digital economy from spam and related electronic threats. Government of Canada guidance states that CASL generally prohibits organizations from sending commercial electronic messages without the recipient's consent , subject to statutory exceptions. CEMs can include emails, text messages and certain social-media communications that encourage participation in commercial activity.
Consent may be express or implied where CASL permits it. In addition to obtaining valid consent, commercial messages generally must identify the sender, provide required contact information and contain a functioning unsubscribe mechanism. CASL has a broader scope than spam alone-it also addresses matters such as unauthorized software installation, transmission-data alteration and misleading electronic representations-but D most accurately captures its principal application to commercial communications among the available choices.
A is incorrect because CASL applies across commercial sectors, not specifically to securities marketing. B confuses CASL with privacy legislation such as PIPEDA. C is not CASL's principal purpose.
The official CIRE syllabus expressly includes Canadian Anti-Spam Legislation among the applicable laws candidates must understand.
Study Guide Reference: CIRE Element 1.11 - Overview of Canadian securities regulatory framework:
purpose and implications of Canadian Anti-Spam Legislation.
NEW QUESTION # 25
When must an Investment Dealer consult with a client's trusted contact person?
Answer: A
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 # 26
What must an Approved Person understand about securities to comply with know-your-product (KYP) obligations?
Answer: D
Explanation:
The correct answer is D . Know-your-product is a fundamental regulatory obligation requiring an Approved Person to develop a sufficient understanding of every security they purchase, sell or recommend for a client.
CIRO's KYP guidance specifically requires Approved Persons to understand securities including their
"structure, features and risks" , as well as their initial and ongoing costs and the impact of those costs.
This knowledge must be sufficiently detailed to support the representative's suitability and other regulatory obligations. Depending on the security, the analysis may include how returns are generated, liquidity, leverage, redemption restrictions, complexity, potential loss of principal, derivative exposure, conflicts of interest, time horizon and relevant fees. Higher-risk or more complex products require correspondingly deeper analysis. CIRO and CSA reiterated these requirements in their December 2025 KYP review, emphasizing structure, features, risks, costs and the effect of costs on performance.
A relates more closely to understanding the client's objectives and intended strategy, which forms part of KYC and suitability analysis. B is relevant when performing a suitability determination because representatives must consider a reasonable range of alternatives, but it is not the core definition of what must be understood about the specific security. C is not a prescribed KYP requirement.
The CIRE syllabus expressly lists structure, features, risks, initial and ongoing costs, and cost impact under KYP.
Study Guide Reference: CIRE Elements 3.8-3.9 - Product Due Diligence and Know-Your-Product; IDPC Rules 3301-3302.
NEW QUESTION # 27
Which of the following scenarios best illustrates the use of derivatives for risk management through hedging?
Answer: B
Explanation:
The correct answer is B . Hedging is the use of a derivative to reduce or offset an existing or reasonably anticipated financial exposure. The CIRE syllabus expressly identifies "Risk management/mitigation through hedging" as one of the three fundamental uses of derivatives, alongside speculative trading and arbitrage. It also identifies forwards as a principal derivative contract candidates must understand.
A company expecting to make or receive a foreign-currency payment faces exchange-rate risk because the Canadian-dollar value of that future transaction can change before settlement. By entering into a currency forward today, the company establishes the exchange rate that will apply at the future date, thereby reducing uncertainty. Bank of Canada materials confirm that Canadian corporations commonly use FX forwards for hedging and that forward markets allow businesses to manage foreign-exchange exposure by locking in exchange-rate levels.
A is principally a speculative bullish position because the investor is seeking to profit from an anticipated price rise. C expressly describes speculation. D employs leverage to magnify returns, which increases rather than principally mitigates risk.
Study Guide Reference: CIRE Elements 8.2-8.3 - Forwards; basic derivative uses: hedging, speculation and arbitrage.
NEW QUESTION # 28
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