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Questions and Answers
Which provincial securities regulatory body is responsible for enforcing securities regulations in New Brunswick?
Which provincial securities regulatory body is responsible for enforcing securities regulations in New Brunswick?
According to the information, what is a primary function of the Canadian Securities Administrators (CSA)?
According to the information, what is a primary function of the Canadian Securities Administrators (CSA)?
Which National Instrument is NOT explicitly mentioned in the text as being relevant to dealer members?
Which National Instrument is NOT explicitly mentioned in the text as being relevant to dealer members?
Which of the following is NOT a mission of the CSA members?
Which of the following is NOT a mission of the CSA members?
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What is a key difference between the CSA and provincial securities regulatory bodies?
What is a key difference between the CSA and provincial securities regulatory bodies?
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What is the main goal of IOSCO's efforts to promote investor confidence in the integrity of securities markets?
What is the main goal of IOSCO's efforts to promote investor confidence in the integrity of securities markets?
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Which of the following is NOT a primary objective of securities regulation as outlined in the provided text?
Which of the following is NOT a primary objective of securities regulation as outlined in the provided text?
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Which of the following is TRUE about the Canadian Securities Administrators (CSA)?
Which of the following is TRUE about the Canadian Securities Administrators (CSA)?
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What is the primary purpose of a securities commission in most Canadian provinces?
What is the primary purpose of a securities commission in most Canadian provinces?
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Based on the text, which organization among the following is directly responsible for promoting public confidence in the integrity of financial regulation?
Based on the text, which organization among the following is directly responsible for promoting public confidence in the integrity of financial regulation?
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Which of the following BEST describes the relationship between securities firms and their employees?
Which of the following BEST describes the relationship between securities firms and their employees?
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According to the provided information, which of the following accounts would be considered separate accounts EXCEPT one for a?
According to the provided information, which of the following accounts would be considered separate accounts EXCEPT one for a?
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Based on the provided information, which account types will ALWAYS be combined and treated as a single account?
Based on the provided information, which account types will ALWAYS be combined and treated as a single account?
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A client has two RRIF accounts with two different trustees. How would these accounts be treated for the purpose of separate accounts?
A client has two RRIF accounts with two different trustees. How would these accounts be treated for the purpose of separate accounts?
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A client holds an RRSP and an RRIF, each with separate trustees. Would these accounts be treated as one or two separate accounts?
A client holds an RRSP and an RRIF, each with separate trustees. Would these accounts be treated as one or two separate accounts?
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A client holds an RRIF and a personal investment account for their daughter. These accounts would be considered as...
A client holds an RRIF and a personal investment account for their daughter. These accounts would be considered as...
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Flashcards
Securities Regulation Principles
Securities Regulation Principles
Rules governing the distribution of securities to protect investors.
Role of Securities Commissions
Role of Securities Commissions
Provincial bodies that administer securities legislation.
Canadian Securities Administrators (CSA)
Canadian Securities Administrators (CSA)
An organization coordinating the regulation of Canadian capital markets.
Dual Mandate of Regulators
Dual Mandate of Regulators
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British Columbia Securities Commission Mission
British Columbia Securities Commission Mission
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NI 31-103
NI 31-103
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Investor Protection
Investor Protection
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Provincial Regulators
Provincial Regulators
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Mission of CSA
Mission of CSA
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Registered Retirement Accounts
Registered Retirement Accounts
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Types of Separate Accounts
Types of Separate Accounts
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Combining Accounts Policy
Combining Accounts Policy
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Trust Accounts Treatment
Trust Accounts Treatment
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CIPF Introduction
CIPF Introduction
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IOSCO
IOSCO
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Objectives of IOSCO
Objectives of IOSCO
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FSB
FSB
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Mandate of FSB
Mandate of FSB
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Role of FSB members
Role of FSB members
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Study Notes
The Canadian Regulatory Framework
- This chapter discusses the basic principles of securities regulation
- It covers provincial securities legislation, rules, regulations, and self-regulatory organizations
Learning Objectives
- Identify the principles of securities regulation
- Identify key players in Canadian securities regulation
- Explain the role of self-regulatory organizations, provincial regulators, and marketplaces
- Describe the role of the Canadian Investor Protection Fund and its coverage limits
- Describe anti-money laundering and anti-terrorist financing requirements
Content Areas
- General Principles of Securities Regulation
- Key Government Players Involved in Securities Regulation
- Self-Regulatory Organizations
- Investor Protection Funds
- Money Laundering and Terrorist Financing in the Securities Industry
Key Terms
- administrator
- Canadian Investor Protection Fund
- money laundering
- Mutual Fund Dealers Association
- Canadian Securities Administrators
- dealer member
- Designated Stock Exchange
- disclosure
- Financial Transactions and Reports Analysis Centre of Canada
- Integrated Market Enforcement Teams
- Investment Industry Regulatory Organization of Canada
- Joint Serious Offences Team
- National Instrument
- Passport System
- primary distribution
- registrant
- regulator
- secondary distribution
- secondary trading
- self-regulatory organization
- Universal Market Integrity Rules
Introduction
- The securities industry is heavily regulated to promote a fair and efficient marketplace and protect investors
- Issuers must provide potential buyers with information before selling securities in the public marketplace
- Public companies and insiders must disclose information to the public on an ongoing basis
- Distributors must follow rules governing conduct, including client asset handling and recommendations
- Registration requirements ensure licensed activities
General Principles of Securities Regulation
- Provincial securities legislation regulates primary and secondary distribution of securities, protecting buyers and sellers
- Provincial securities commissions or administrators oversee the legislation administration
- Provincial regulators work together to coordinate Canadian capital markets (CSA)
- The primary mandate of each regulator is promoting market integrity and investor protection
Disclosure
- The fundamental principle of securities regulation is full, true, and plain disclosure
- Issuers must file a prospectus (or similar document) containing material facts for securities offerings
- Prospectuses act as contracts between issuers and buyers, requiring informed decisions
- Disclosure requirements apply to primary and secondary trading
- Continuous disclosure requirements apply, requiring periodic filing of financial statements and material changes
- This includes communications about insider trading, proxy solicitations, corporate financial reports, and analyses
Registration
- Administrators register individuals and companies involved in securities distribution or advice
- This ensures standards of proficiency, integrity, and financial compliance
- Registration can be suspended or cancelled by the administrator when deemed necessary
- Every investment dealer that underwrites or sells securities must be registered in any province involving sales
Investigation and Prosecution
- Administrators can investigate, prosecute violations, and impose sanctions for conduct contrary to the public interest
- Administrators can compel witness testimony, seize documents, freeze funds/securities, and levy fines
- Suspension, cancellation, or revocation of registration are possible sanctions
Financial Stability Board
- The FSB was created in 2009 to address vulnerabilities in the financial system
- The FSB helps promote information exchange, monitors market developments for policy implications, and undertakes joint reviews
Self-Regulatory Organization (SRO)
- SROs are industry organizations that regulate their members, granted authority by regulators
- SROs are responsible for enforcing member conformity with securities legislation and can establish their own rules and financial requirements
- Conduct compliance reviews to ensure high standards and financial health, overseen by regulators for adherence to provincial securities regulations
International Activities
- The International Organization of Securities Commissions (IOSCO) plays a significant role in regulating over 95% of global securities markets; focusing on standards, oversight, and investor protection
- IOSCO works with multiple members to support consistent standards of market regulation, encouraging the exchange of information, and addressing systemic risks to increase investor confidence
Money Laundering and Terrorist Financing
- Money laundering obscures the source of criminal funds and creates the appearance of their legitimacy
- The process has three main stages: placement, layering, and integration
- Placement involves depositing cash proceeds from illegal activities within the financial system
- Layering involves complex transactions to obscure the source, and Integration involves integrating the laundered money back into the economy
- The securities industry presents a unique opportunity due to diversity and ease of international trading
- Anti-money laundering (AML) regulations require securities firms to have procedures for client identification, recordkeeping and trading supervision
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Description
Test your knowledge of securities regulations in Canada, focusing on the roles of various regulatory bodies, including the Canadian Securities Administrators (CSA) and provincial bodies. Evaluate your understanding of key national instruments and their relevance to dealer members, along with the overarching goals of IOSCO in maintaining market integrity.
