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| Section | Weight | Objectives |
|---|---|---|
| Prospective client relationships | 10% | - Client record documentation, filing and maintenance - Institutional client qualification requirements - Exemptions under National Instrument 45-106 - Investment Dealer onboarding process - Differences between retail and institutional clients - Role of cost in product selection - Required account agreement and Firm Welcome package documents - Retail client information collection - Third parties and other professionals in the client's life - Client relationship model - Impact of fees, turnover and taxes on investment returns |
| Conflicts of interest and ethics | 15% | - Conflicts of interest management process - Importance of managing conflicts of interest - Information controls, barriers, firewalls and restricted lists - Importance of ethics and its relationship to rules - Ethical and legal responsibilities to clients - CIRO and other ethical standards of conduct - Client confidentiality policies and procedures - Ethical principles and standards of conduct for Approved Persons and Investment Dealers - Inappropriate or prohibited personal financial dealings with clients - Activities outside an Investment Dealer - Role of cybersecurity in protecting confidential information - Requirements regarding positions of influence |
| Securities, managed products, mutual funds and other investments | 19% | - Considerations affecting exchange-traded fund investors - Other investments including hedge funds, structured products, alternative investment funds, crypto assets and ESG-related products - Types of pooled products - Asset classes generally sold and traded at an Investment Dealer - Considerations affecting mutual fund investors - Features, risks and returns of managed products - Considerations affecting equity investors and potential shareholders - Purpose and uses of market indices - Types, features, risks and returns of equities - Considerations affecting managed product investors - Considerations affecting fixed income investors - Types, features, risks and returns of fixed income securities and products |
| Market integrity, trade execution and settlement | 12% | - Reporting obligations to firms and regulators - UMIR gatekeeping obligations - Universal Market Integrity Rules - Features of different account types - Order entry, trade management, settlement and delivery - Margin requirements - Functions of investment banking, research and corporate finance - Specialized trading agreements for derivative accounts - Order confirmation requirements - Features of different order types - Gatekeeping requirements for manipulative and deceptive practices, unacceptable activities and front running - Order variations, cancellations and corrections |
| Derivatives | 5% | - Basic transactional elements of futures and options - Features of other derivative contract types - Single and multi-legged derivative trading strategies - Prohibited derivative trading practices - Administrative requirements for derivative trading with clients - Basic uses of derivatives - Listed versus over-the-counter derivative markets - Features of options contract types |
| Overview of Canadian securities regulatory framework | 10% | - Function and purpose of clearing agencies - Function and purpose of the Canadian Investor Protection Fund - Role and authority of the Canadian Investment Regulatory Organization - Other applicable laws including confidentiality, privacy, anti-spam, company disclosure and shareholder rights - Function and purpose of investment industry marketplaces - Anti-money laundering and anti-terrorist financing legislation and regulations - Role and authority of the Canadian Securities Administrators and provincial and territorial securities and derivatives regulators - Investment Dealer registration and individual approval requirements - Criminal Code and its application to financial crime - Function and purpose of other investment industry regulators and agencies - Purpose and implications of the Bank Act and Bankruptcy and Insolvency Act |
| Market and company analysis | 8% | - Factors influencing the macroeconomy - Technical and statistical analysis tools and information sources - Company performance analysis tools - Effects of macroeconomic factors on financial markets - Rules relating to companies - Basic market theories and stock market behaviour - Basic economic theories - Economic indicators and sources of information - Industry performance analysis |
| Scope of client relationships | 15% | - Suitability determination requirements for retail clients - Institutional client sophistication assessment and suitability exemptions - Investment performance benchmarks - Know-your-product obligations - Product due diligence obligations - Requirements for working with clients in the United States and other foreign jurisdictions - Exemptions from suitability determination requirements - Internal escalation procedures and subject matter experts - Account appropriateness obligations - Typical services provided by retail Investment Dealers - Systematic approaches to investment management and investment strategies - Role of the Investment Representative in providing client service - Account appropriateness versus suitability determination - Typical services provided by institutional Investment Dealers - Trust, agency and fiduciary duty - Role of the Registered Representative in providing client service - Purpose and content of relationship disclosure |
| Client complaint handling and reporting | 5% | - Potential client issues, liability and consequences - Prohibited practices in client settlement agreements - Role of CIRO and provincial regulators in the complaints handling framework - Recourse available to dissatisfied clients - Policies and procedures for reporting, handling and maintaining complaint records - Investment Dealer obligations to clients - Investment Dealer complaint reporting obligations and penalties |
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NEW QUESTION # 81
A Registered Representative (RR) has delegated the collection of know-your-client (KYC) information to an Investment Representative (IR), who updates it every 12 months. Why does this process fail to meet the RR's regulatory obligations?
Answer: A
Explanation:
The correct answer is B . CIRO places primary responsibility for compliance with KYC requirements on the Registered Representative, Portfolio Manager or Associate Portfolio Manager assigned to the client account . IDPC Rule 3209(2) expressly provides that this responsibility "must not be delegated to any other person." Therefore, an RR cannot transfer their regulatory KYC responsibility to an Investment Representative and treat the IR's periodic updates as satisfying the RR's obligation.
An IR may perform permitted administrative or client-service functions within the scope of their approval, but the assigned RR remains accountable for ensuring that KYC information is appropriately collected, understood, maintained and used in fulfilling suitability responsibilities. This distinction is critical because an RR provides recommendations and must understand the client's circumstances before determining that an investment action is suitable and puts the client's interest first.
The 12-month frequency is not the problem. CIRO generally requires suitability-related KYC information to be reviewed at least every 36 months , while managed and discretionary accounts require review at least every 12 months , and significant changes must be addressed within a reasonable time. Thus D is incorrect. A is also incorrect because IRs may communicate with clients, while C reverses the RR's role.
Study Guide Reference: CIRE Element 3.1 - RR responsibility for collecting KYC; Retail Securities Exam Element 1.7 - primary responsibility, prohibition on KYC delegation and keeping KYC current; IDPC Rule 3209.
NEW QUESTION # 82
A risk-averse investor is considering investing in preferred shares. What is one key feature of preferred shares that may appeal to such investors?
Answer: A
Explanation:
The correct answer is A . Preferred shares generally provide investors with regular or fixed-rate dividend income and rank ahead of common shares for dividend payments and claims on residual corporate assets upon liquidation. CIRO's investment glossary describes a preferred share as providing a fixed dividend payable before dividends to common shareholders, together with a preferred claim on assets if the company is liquidated.
Ontario Securities Commission investor education similarly states that preferred stock generally offers regular income through fixed dividends, that preferred dividends are paid before common-share dividends, and that preferred shareholders have priority over common shareholders if the company is liquidated. This relative priority and greater income orientation may appeal to comparatively risk-averse equity investors.
However, preferred shares are not risk-free . Dividends may be suspended depending on the issuer and share terms, and preferred shareholders rank behind creditors and bondholders in insolvency. Therefore D is incorrect. B is incorrect because preferred shares normally carry limited or no voting rights. C is incorrect because preferred shares generally offer less capital-growth potential than common shares.
The CIRE syllabus specifically requires candidates to understand the features, risks and returns of common and preferred shares .
Study Guide Reference: CIRE Element 7.2 - Equities: common shares and preferred shares; Element
7.3 - advantages and disadvantages of share ownership.
NEW QUESTION # 83
Under CIRO rules, which of the following must an exchange-traded fund (ETF) disclose to potential investors before they invest?
Answer: C
Explanation:
The correct answer is B . Investors evaluating an ETF require disclosure of the fund's fundamental characteristics, including what it invests in or how it operates, its material risks and the costs associated with ownership. Under the Canadian securities-regulatory disclosure framework, this information is summarized through the ETF Facts document and supported by the prospectus. CSA materials explain that ETF Facts are intended to highlight key information needed for an informed investment decision, including the fund's investments, risk rating, past performance and costs .
CIRO's investor education similarly states that an ETF's costs and level of risk are available in its ETF Facts document. ETFs may invest in equities, bonds or commodities and may focus on particular industries, sectors, countries or investment approaches. Therefore B most accurately captures the core disclosure relevant to an investor's decision.
A is irrelevant because the fund manager's personal financial objectives are not required investment-product disclosure. C is too narrow and does not represent the principal ETF disclosure requirement. D is incorrect because an ETF is not universally required to provide every underlying holding as the defining pre-investment disclosure; portfolio holdings and reporting requirements depend on the applicable fund and disclosure regime.
The CIRE syllabus expressly requires candidates to understand ETF Facts, ETF information sources, management styles, leverage, risks and costs .
Study Guide Reference: CIRE Elements 7.7-7.11 - Exchange-Traded Funds and ETF Facts.
NEW QUESTION # 84
Which of the following could be a market order?
Answer: A
Explanation:
The correct answer is D . Under UMIR 1.1, a market order is an order to buy a security or derivative that is executed upon entry to a marketplace at the best ask price , or an order to sell that executes at the best bid price . This is essentially the wording used in D.
Unlike a limit order, a market order does not establish a maximum purchase price or minimum sale price. Its priority is prompt execution against the best available displayed liquidity, although the ultimate execution price can vary if available volume at the best price is insufficient.
Each other option describes a different recognized order type. A is a bundled order , defined by UMIR as an order combining a client order with a non-client or principal order, or both. B describes a limit order , because the purchaser specifies the maximum acceptable execution price. C describes a Closing Price Order
, which is entered subject to execution at the security's closing sale price.
The CIRE syllabus expressly requires candidates to understand different order types, including market orders, limit orders, immediate-or-cancel orders, fill-or-kill orders, on-stop orders and iceberg orders .
Study Guide Reference: CIRE Element 6.6 - Features of different order types; UMIR 1.1 - Market Order.
NEW QUESTION # 85
A Registered Representative (RR) determines that an investment strategy is not suitable for a retail client. The client decides that they want to invest anyway. Which of the following should the RR do?
Answer: B
NEW QUESTION # 86
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