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| Section | Weight | Objectives |
|---|---|---|
| Derivatives | 5% | - Listed versus over-the-counter derivative markets - Administrative requirements for derivative trading with clients - Prohibited derivative trading practices - Features of other derivative contract types - Single and multi-legged derivative trading strategies - Features of options contract types - Basic uses of derivatives - Basic transactional elements of futures and options |
| Overview of Canadian securities regulatory framework | 10% | - Other applicable laws including confidentiality, privacy, anti-spam, company disclosure and shareholder rights - Role and authority of the Canadian Investment Regulatory Organization - Function and purpose of investment industry marketplaces - Purpose and implications of the Bank Act and Bankruptcy and Insolvency Act - Function and purpose of other investment industry regulators and agencies - Anti-money laundering and anti-terrorist financing legislation and regulations - Criminal Code and its application to financial crime - Function and purpose of the Canadian Investor Protection Fund - Function and purpose of clearing agencies - Role and authority of the Canadian Securities Administrators and provincial and territorial securities and derivatives regulators - Investment Dealer registration and individual approval requirements |
| Client complaint handling and reporting | 5% | - Role of CIRO and provincial regulators in the complaints handling framework - Recourse available to dissatisfied clients - Potential client issues, liability and consequences - Investment Dealer complaint reporting obligations and penalties - Policies and procedures for reporting, handling and maintaining complaint records - Prohibited practices in client settlement agreements - Investment Dealer obligations to clients |
| Prospective client relationships | 10% | - Client record documentation, filing and maintenance - Exemptions under National Instrument 45-106 - Retail client information collection - Role of cost in product selection - Impact of fees, turnover and taxes on investment returns - Differences between retail and institutional clients - Third parties and other professionals in the client's life - Institutional client qualification requirements - Client relationship model - Investment Dealer onboarding process - Required account agreement and Firm Welcome package documents |
| Securities, managed products, mutual funds and other investments | 19% | - Other investments including hedge funds, structured products, alternative investment funds, crypto assets and ESG-related products - Considerations affecting fixed income investors - Types, features, risks and returns of equities - Types of pooled products - Considerations affecting exchange-traded fund investors - Purpose and uses of market indices - Features, risks and returns of managed products - Considerations affecting equity investors and potential shareholders - Considerations affecting mutual fund investors - Considerations affecting managed product investors - Types, features, risks and returns of fixed income securities and products - Asset classes generally sold and traded at an Investment Dealer |
| Scope of client relationships | 15% | - Know-your-product obligations - Systematic approaches to investment management and investment strategies - Account appropriateness versus suitability determination - Internal escalation procedures and subject matter experts - Account appropriateness obligations - Requirements for working with clients in the United States and other foreign jurisdictions - Typical services provided by retail Investment Dealers - Exemptions from suitability determination requirements - Product due diligence obligations - Typical services provided by institutional Investment Dealers - Investment performance benchmarks - Purpose and content of relationship disclosure - Institutional client sophistication assessment and suitability exemptions - Suitability determination requirements for retail clients - Trust, agency and fiduciary duty - Role of the Registered Representative in providing client service - Role of the Investment Representative in providing client service |
| Market integrity, trade execution and settlement | 12% | - Features of different order types - Order confirmation requirements - UMIR gatekeeping obligations - Features of different account types - Specialized trading agreements for derivative accounts - Margin requirements - Order entry, trade management, settlement and delivery - Gatekeeping requirements for manipulative and deceptive practices, unacceptable activities and front running - Universal Market Integrity Rules - Order variations, cancellations and corrections - Functions of investment banking, research and corporate finance - Reporting obligations to firms and regulators |
| Market and company analysis | 8% | - Factors influencing the macroeconomy - Basic economic theories - Effects of macroeconomic factors on financial markets - Technical and statistical analysis tools and information sources - Industry performance analysis - Rules relating to companies - Company performance analysis tools - Basic market theories and stock market behaviour - Economic indicators and sources of information |
| Conflicts of interest and ethics | 15% | - Inappropriate or prohibited personal financial dealings with clients - Role of cybersecurity in protecting confidential information - Conflicts of interest management process - Ethical and legal responsibilities to clients - Information controls, barriers, firewalls and restricted lists - Importance of ethics and its relationship to rules - Ethical principles and standards of conduct for Approved Persons and Investment Dealers - Requirements regarding positions of influence - Activities outside an Investment Dealer - Client confidentiality policies and procedures - Importance of managing conflicts of interest - CIRO and other ethical standards of conduct |
>> Exam CIRE Study Solutions <<
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NEW QUESTION # 72
When an employee of an Investment Dealer engages in an outside business activity what must they do?
Answer: C
Explanation:
The correct answer is B . An Approved Person cannot independently commence an outside activity without the sponsoring Investment Dealer being informed and approving the activity before it begins . IDPC Rule
2554 requires the Approved Person to inform the Dealer of the outside activity and obtain the Dealer's prior approval . CIRO guidance further requires Dealers to maintain robust pre-approval procedures, consider potential client confusion and conflicts of interest, implement effective controls and qualified supervision, and retain supporting records.
Thus, among the available choices, B accurately expresses the required advance Dealer authorization . The current IDPC rule itself uses the term "prior approval"; documented firm approval procedures give effect to this requirement. The CIRE syllabus specifically requires candidates to apply requirements governing activities outside an Investment Dealer, including conflict assessment, effective controls, supervision, due diligence for approvals and appropriate recordkeeping.
A is incorrect because monitoring and compliance supervision remain responsibilities of the Dealer rather than being left exclusively to the employee. C is not a requirement; an outside activity can be unrelated to securities business provided it satisfies regulatory and Dealer conditions. D is unrelated to whether an outside activity may be conducted.
Outside activities that create material conflicts that cannot be appropriately controlled in the client's best interest should not be permitted.
Study Guide Reference: CIRE Element 9.9 - Activities outside an Investment Dealer; IDPC Rule 2554.
NEW QUESTION # 73
The Ombudsman for Banking Services and Investments (OBSI) has recommended that a firm compensate a client. If the firm refuses to comply, what action can OBSI take?
Answer: A
Explanation:
The correct answer is C . OBSI investigates eligible complaints and may recommend compensation when it concludes that compensation would provide a fair resolution. However, OBSI's compensation recommendations are not equivalent to binding court judgments or arbitration awards. If a firm ultimately refuses to comply with an OBSI recommendation, OBSI can use its public-disclosure or "name and shame" mechanism .
OBSI's current complaint-process guidance states that if a firm continues to refuse compensation after OBSI completes its investigation and official report, OBSI makes public the firm's name, its findings, and the fact that the firm refused the recommendation . The complainant's identity is not made public. OBSI's published firm-refusal records likewise state that where a firm refuses a recommendation, OBSI is required to publicize the refusal and relevant details of the complaint.
A is incorrect because OBSI does not possess CIRO's or a provincial regulator's registration and disciplinary authority. B is incorrect because OBSI cannot transform its recommendation into a court judgment and enforce it judicially itself. D is incorrect because, although the recommendation is non-binding, OBSI can impose significant reputational transparency through public disclosure.
The CIRE syllabus expressly requires understanding of OBSI and other avenues of recourse for dissatisfied clients .
Study Guide Reference: CIRE Elements 1.7 and 4.2 - OBSI's role and client recourse mechanisms.
NEW QUESTION # 74
What is the role of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) in the investment industry sector?
Answer: C
Explanation:
The correct answer is D . FINTRAC is Canada's financial intelligence unit and anti-money-laundering
/anti-terrorist-financing supervisor . It receives prescribed financial transaction reports-including Suspicious Transaction Reports-from reporting entities such as securities dealers, analyzes those reports for patterns potentially related to money laundering or terrorist financing, and discloses qualifying financial intelligence to appropriate law-enforcement, national-security and other authorized bodies.
Technically, the securities dealer identifies, monitors and reports suspicious transactions to FINTRAC ; FINTRAC then receives, assesses and analyzes the information. Accordingly, D is the closest and correct choice because it captures FINTRAC's role within the suspicious-financial-transaction reporting regime.
Securities dealers are expressly listed among the entities required to submit prescribed reports to FINTRAC.
A is incorrect because CIRO and provincial/territorial securities regulators oversee registration and securities- dealer conduct. B describes functions performed through market infrastructure and clearing agencies such as CDS rather than FINTRAC. C is incorrect because FINTRAC does not generally enforce provincial securities legislation; its mandate derives principally from the Proceeds of Crime (Money Laundering) and Terrorist Financing Act .
FINTRAC also assesses reporting entities' compliance with AML requirements, including client identification, recordkeeping, ongoing monitoring and transaction reporting.
Study Guide Reference: CIRE Elements 1.7 and 1.10 - FINTRAC; PCMLTFA/Regulations; suspicious transaction monitoring and reporting.
NEW QUESTION # 75
Retail Investment Dealers may offer a range of accounts to clients. Which of the following best reflects that range?
Answer: B
Explanation:
The correct answer is A . The CIRE syllabus expressly identifies the typical services provided by a retail Investment Dealer as order execution only, advisory, managed and discretionary . These service models differ principally in the degree of advice and decision-making authority exercised by the client and the Dealer or representative.
In an OEO account , the client makes investment decisions and the Dealer executes orders without providing recommendations. In an advisory account , a Registered Representative may provide recommendations, but the client retains final authority over each transaction. A managed account delegates ongoing discretionary investment-management authority to an appropriately approved Portfolio Manager according to the account mandate. A discretionary account also permits specified discretionary trading authority, subject to CIRO's regulatory limitations, documentation and supervisory requirements.
B is incorrect because Direct Electronic Access (DEA) is not included by the CIRE syllabus as one of the typical retail Investment Dealer service categories. DEA concerns electronic access and routing arrangements to marketplaces and appears under the market-integrity framework rather than the standard list of retail account services. C omits OEO accounts, while D omits managed accounts.
Study Guide Reference: CIRE Element 3.5 - Typical services provided by retail Investment Dealers; Element 6.9 - features of account types.
NEW QUESTION # 76
An Investment Dealer is helping a new client open a derivatives trading account. During the application process, what information about the client must the dealer obtain to meet regulatory requirements in Canada?
Answer: D
Explanation:
The correct answer is A . Derivatives can involve leverage, nonlinear exposure, margin obligations and potentially substantial losses, so an Investment Dealer must establish whether the client possesses an appropriate level of investment knowledge and relevant trading experience for the derivatives strategies contemplated. CIRO's supervisory competency framework specifically identifies as a regulatory concern an applicant seeking to use derivatives strategies without an appropriate level of "knowledge and trading experience." Current IDPC Rule 3251 requires the Dealer, before the initial derivatives transaction, to obtain a completed derivatives account application , obtain a signed derivatives trading agreement, provide the prescribed risk disclosure document and obtain written supervisory approval. The designated Supervisor must assess whether the proposed strategies are appropriate having regard to the client's personal and financial circumstances, objectives, investment knowledge , risk profile and time horizon.
D describes information that is also relevant to general KYC obligations, but it is not the most derivatives- specific answer presented. A directly addresses whether the client understands the characteristics and risks of derivatives and has relevant experience. B incorrectly substitutes acknowledgement of internal Dealer policies for the required derivatives documentation. C improperly focuses on historical account performance rather than regulatory knowledge and suitability factors.
The CIRE syllabus expressly lists the Derivatives Account Application and related documentation as mandatory study areas.
Study Guide Reference: CIRE Element 8.7 - derivatives account administration; IDPC Rules 3250-
3252.
NEW QUESTION # 77
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