Podcast
Questions and Answers
What is the primary focus of the Canadian Investment Regulatory Organization (CIRO) regarding Registered Representatives (RRs)?
What is the primary focus of the Canadian Investment Regulatory Organization (CIRO) regarding Registered Representatives (RRs)?
- Promoting high standards of ethics and conduct among RRs in their business transactions. (correct)
- Maximizing the revenue generated by RRs for their respective firms.
- Ensuring RRs strictly adhere to internal policies of their specific investment dealer.
- Guaranteeing investment returns for clients through RR oversight and regulation.
In the context of the securities industry, what does ethical behavior entail beyond regulatory compliance?
In the context of the securities industry, what does ethical behavior entail beyond regulatory compliance?
- Strict adherence to the letter of the law to avoid legal repercussions.
- Meeting the minimum requirements set by regulators to maintain licensure.
- Relying on prescribed conduct to navigate unclear or contradictory situations.
- Making internal moral judgements to address situations where rules are unclear. (correct)
In what ways does the 'Know Your Client' (KYC) rule integrate into the ethical conduct of a Registered Representative (RR)?
In what ways does the 'Know Your Client' (KYC) rule integrate into the ethical conduct of a Registered Representative (RR)?
- By ensuring RRs recommend investments based solely on potential commissions.
- By allowing RRs to bypass suitability requirements for high-net-worth clients.
- By requiring RRs to maintain a friendship with their clients to foster trust.
- By obligating RRs to act honestly and document a client's situation before making recommendations. (correct)
What is the critical element that invalidates reliance on ethical relativism within the securities industry?
What is the critical element that invalidates reliance on ethical relativism within the securities industry?
Why is it important for securities industry firms to cultivate a 'tone at the top' that emphasizes values?
Why is it important for securities industry firms to cultivate a 'tone at the top' that emphasizes values?
In the context of ethical behavior in the securities industry, which scenario represents an ethical dilemma?
In the context of ethical behavior in the securities industry, which scenario represents an ethical dilemma?
When using the resolution principles in the ethical decision-making process, what does end-based thinking consider?
When using the resolution principles in the ethical decision-making process, what does end-based thinking consider?
How do regulations about securities aim to ensure investor protection in the market?
How do regulations about securities aim to ensure investor protection in the market?
According to securities regulations, what should an RR do when they discover a conflict of interest?
According to securities regulations, what should an RR do when they discover a conflict of interest?
What action would most likely violate securities industry ethics regarding the use of client information?
What action would most likely violate securities industry ethics regarding the use of client information?
In what ways have social values shaped securities industry conduct?
In what ways have social values shaped securities industry conduct?
Concerning the use of client information, what does the Personal Information Protection and Electronic Documents Act (PIPEDA) do?
Concerning the use of client information, what does the Personal Information Protection and Electronic Documents Act (PIPEDA) do?
To comply with regulatory expectations, if an RR is going to sell certain investments, what should happen first?
To comply with regulatory expectations, if an RR is going to sell certain investments, what should happen first?
Per securities industry regulations, what action must a Registered Representative (RR) take after realizing that transactions were executed based on client instructions which are potentially unsuitable?
Per securities industry regulations, what action must a Registered Representative (RR) take after realizing that transactions were executed based on client instructions which are potentially unsuitable?
What is the importance of the client discovery process and doing it properly?
What is the importance of the client discovery process and doing it properly?
As a Registered Representative (RR), you are asked to open an account for a client referred to you.
As a Registered Representative (RR), you are asked to open an account for a client referred to you.
Within the framework of UMIR [Universal Market Integrity Rules], when must transactions be disclosed?
Within the framework of UMIR [Universal Market Integrity Rules], when must transactions be disclosed?
Your brokerage is sold to a company that specializes in high-net-worth clients. Your book of client accounts will not be completely compliant with the new direction. Can you continue serving those clients?
Your brokerage is sold to a company that specializes in high-net-worth clients. Your book of client accounts will not be completely compliant with the new direction. Can you continue serving those clients?
Your client does not fit a particular new investment mandate. What should you do?
Your client does not fit a particular new investment mandate. What should you do?
Flashcards
High standards of ethics
High standards of ethics
Adherence to accepted standards of conduct in the industry.
Know Your Client (KYC)
Know Your Client (KYC)
The paramount obligation as a Registered Representative (RR).
Know Your Product (KYP)
Know Your Product (KYP)
Understanding how investments work and their potential impacts.
Duty of care
Duty of care
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Act honestly, fairly, and trustworthily
Act honestly, fairly, and trustworthily
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Canadian Securities Administrator (CSA)
Canadian Securities Administrator (CSA)
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Conflict of interest
Conflict of interest
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Values clarification
Values clarification
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Personal values
Personal values
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Ethical dilemma
Ethical dilemma
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Front page test
Front page test
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Mom test
Mom test
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Securities legislation
Securities legislation
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Disclosure
Disclosure
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Canadian Investment Regulatory Organization (CIRO)
Canadian Investment Regulatory Organization (CIRO)
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Cease Trading Order
Cease Trading Order
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Integrated Market Enforcement Teams (IMETs)
Integrated Market Enforcement Teams (IMETs)
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Passport System, Super MOU, electronic databases
Passport System, Super MOU, electronic databases
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Placement
Placement
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Layering
Layering
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Study Notes
Canadian Securities Institute (CSI)
- CSI has set standards for financial professional education for 50 years.
- CSI is part of Moody's Analytics Training and Certification Services.
- It has trained over one million global professionals.
- CSI is a preferred partner for individuals, financial institutions, and regulators internationally.
- Its expertise includes securities, portfolio management, banking, trust, insurance, financial planning, and high-net-worth wealth management.
- CSI is a thought leader offering real-world training with exemplary education.
- It adheres high ethical standards, ensuring proficiency and certification.
- CSI partners with industry regulators and practitioners.
- It is the primary provider in Canada for regulatory courses/exams for CIRO.
- CSI courses are accredited by securities and insurance regulators.
- CSI grants leading designations/certificates, measuring expertise and professionalism.
- Its credentials allow financial professionals to enhance careers beyond basic licensing.
- CSI is valued for expertise in development and delivery of courses and examinations.
- CSI courses are available on demand in various formats.
- CSI leverages new technology and pedagogical tools to meet the changing needs of learners/organizations.
- CSI updates courses regularly to ensure accuracy and practicality.
Conduct and Practices Handbook (CPH) Course
- The CPH course welcomes registrants into the Investment Industry.
- Registrants must understand and adhere to provincial security administrator and Canadian Investment Regulatory Organization (CIRO) rules.
- This course aims to clarify the regulations and offer guidance within ethical boundaries.
- High ethical and conduct standards apply to Registered Representatives (RRs), Investment Representatives (IRs), Portfolio Managers (PMs), Associate PMs, and supervisors.
- The RR role involves identifying and implementing suitable financial strategies to achieve client goals.
- Essential steps include identifying personal, financial, and risk profiles for suitable product/strategy recommendations.
- Success requires proper qualification and adherence to industry rules and ethical practices.
- The CPH identifies provincial securities legislation and CIRO requirements impacting client dealings.
- It provides practical examples to align conduct with RR standards.
What the CPH Course Covers:
- The course's structure was designed after careful consideration of the different elements for an RR in the Canadian securities.
- The course is organized into two sections that reflect these areas:
- Standards of Conduct in the Securities Industry
- Dealing with Clients in the Securities Industry
Standards of Conduct in the Securities Industry
- Standards of Conduct and Ethics are covered
- Ethical Decision Making is covered
- The Canadian Regulatory Framework is covered
Dealing with Clients in the Securities Industry
- Working with Clients is covered
- Client Discovery and Account Opening are covered
- Product Due Diligence, Recommendations and Advice are covered
- Trading Settlement, and Prohibited Activities are covered
- Maintaining Client Accounts and Relationships are covered
- Putting it all together is covered
Course Objective
- It aims to help interpret and adhere to applicable industry rules and accepted conduct standards.
- Lessons provide guidance on business conduct and client account handling, promoting ethical standards for RRs
- Important industry rules are explained and applied to client-advisor scenarios.
- Scenarios include analysis and discussions to critically assess ethics for competency testing
CPH Use
- It is designed as a guide that provides context to the standards
- Context is shows how rules are interpreted and applied to demonstrate proper conduct
Key Chapter Features
- Learning Objectives - Learning Objectives show you what you will be able to accomplish after studying the chapter.
- Key Terms - Understanding of terminology and jargon at the start of each chapter, with terms boldfaced at first appearance and defined in glossary.
- Online Learning Activities - Learning activities accompany the text online, accessed via Student Profile at www.csi.ca.
- Did You Know? -It provides info, facts, statistics, clarifications, and insights, to support chapter content for exams.
- Dive Deeper - It provides links to external source for expansion of knowledge (gained on external websites.
Your Course Journey
- Individual study techniques are encouraged to be developed
- Some familiarity with some knowledge areas is natural and skipping is discouraged
Studying
- Study should revolve around how to arrive at an answer
- Focus on study habits, concept understanding, and knowledge assessment.
- Registration to the CPH course enables access to online resources to assist with learning, which is designed to reinforce the textbook content
- Before starting, it is recommended to view online resources
- Use learning objectives
- Use the text or the PDF for your first review/reading. Take notes of unknowns
- Access any supporting online learning resources
- Review a second time, now focusing on the more challenging material
- Pay attention to all tables, charts and other figures
- Redo all examples and questions
- Use review questions to test retention
- Use summaries to reinforce
CPH Publication Information
- This edition of the CPH Textbook was prepared in 2024
- Continually updated and revised to reflect a rapidly-changing industry
Content
- Chapter 1: Standards of Conduct and Ethics
- Chapter 2: Ethical Decision-Making
- Chapter 3: The Canadian Regulatory Framework
Table of Contents Highlights
- Section 1: Standards of Conduct in the Securities Industry
- Chapter 1: Standards of Conduct and Ethics
- Chapter 2: Ethical Decision-Making
- Chapter 3: The Canadian Regulatory Framework
Table of Contents Highlights
- Section 2: Dealing with Clients in the Securities Industry
- Chapter 4: Working With Clients
- Chapter 5: Client Discovery and Account Opening
- Chapter 6: Product Due Diligence, Recommendations, and Advice
- Chapter 7: Trading, Settlement, and Prohibited Activities
- Chapter 8: Maintaining Client Accounts and Relationships
- Chapter 9: Putting It All Together
Studying That Suits You
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