30 Questions
What is the first step in the Best Practices for Distribution of Non-arm’s Length Investment products?
Product Due Diligence
According to IDPC Rule section 3301, what must a Dealer Member do before making securities available to clients?
Assess relevant aspects of the securities, including structure, features, and risks
What is the duty that requires RRs who provide advice to clients to do so fully, honestly, in good faith, and with the proper skills and knowledge?
Duty of care
What does CIRO provide guidance on to dealer members regarding the due diligence on all securities they make available to clients?
Assessment of relevant aspects of securities
What factors should a dealer consider when assessing the suitability of an investment for a client?
The client's current financial situation, investment knowledge, investment objectives, and time horizon
When should dealer members ensure suitability assessments are performed?
For each prescribed trigger such as when a trade is accepted or a recommendation is made
What are some best practices that dealers should follow when performing a new product review?
Formation of a new product committee to review and approve or disapprove a product
What should an advisor understand about a product when conducting a new product review?
How the product is constructed and how it is likely to perform in various market conditions
In what account should all trading activities be done?
Pro-Account with the employer
What is the requirement for continuous education according to the text?
Annual completion
What should an IA do with insider information according to the text?
Not use or tip clients with insider information
What is the primary duty of Care for Investment Advisors (IA) according to the provided text?
To prioritize client's interests over their own, such as commission
What does 'KYC' stand for in the context of the provided text?
Know Your Client
According to the code of ethics, what should Investment Advisors (IA) do with unsolicited orders if they are not suitable for the client?
Reject the order or ask the client to update their financial information
What is the primary focus of the 'Priority of Client Interests' standard for Investment Advisors (IA)?
Prioritizing client's interests (suitability) over IA's interests (commission)
What should dealer members use due diligence to ensure for each of the prescribed triggers?
Current financial situation
What should happen before a new product is approved or disapproved by the new product committee?
Formation of a new product committee
What should an advisor understand about a product when conducting a new product review?
How the product is likely to perform in various market conditions
What should be consistently applied throughout the firm when performing new product reviews?
Standard of review
What is the requirement for Investment Advisors (IA) regarding personal trading activities?
They should conduct all trading activities in a Pro-Account opened with their employer
What does Standard E of the Securities Acts Compliance entail regarding client information?
IA should not disclose client information, including portfolio details
What is the IA's obligation regarding the use of insider information?
IA should not use or tip clients with insider information
What does the duty of care require RRs who provide advice to clients to do?
Provide advice fully, honestly, in good faith, and with the proper skills and knowledge
Under Step 3 of Best Practices for Distribution of Non-arm’s Length Investment products, what must dealer members do in respect of client orders and recommendations?
Conduct suitability assessments
What is the fundamental difference between ethical behavior and compliance with rules according to the text?
Ethical behavior goes beyond merely complying with rules
What is the main focus of the CIRO guidance provided to dealer members regarding due diligence on securities available to clients?
Identifying conflicts of interest
What is the primary focus of the 'Unsolicited Orders' standard for Investment Advisors (IA)?
Verifying the client's investment knowledge and experience
According to the Code of Ethics, what is the primary duty of Care for Investment Advisors (IA)?
Dealing fairly, honestly, and in good faith with clients
What should an Investment Advisor (IA) understand about 'Know Your Client' (KYC) procedures?
The legal and regulatory obligations regarding client information
In what way should an Investment Advisor (IA) prioritize when it comes to 'Protection of Client Assets'?
Fulfilling client orders before personal business
Test your knowledge of the Code of Ethics and Standard of Care for investment advisors, including duties of care, trustworthiness, honesty, and fairness. Topics include Know Your Client (KYC), Due Diligence, and Unsolicited Orders.
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