40 Questions
What is the recommended minimum time to spend preparing for the exam?
90 hours
What percentage of your grade is the final exam worth?
100%
What is the passing mark percentage required for the final exam?
60%
Where can you find the online exercises to reinforce concepts for each unit?
On the course landing page
What type of exam is the final exam?
Multiple choice exam
What can potentially lead to conflicts of interest for a registrant engaged in dual occupations and outside activities?
Receiving gifts, gratuities, and non-monetary benefits from clients
What should a registered firm and Dealing Representative do if they encounter a conflict of interest not included in the provided list?
Address the conflict in the best interest of the client
Where would the steps for addressing a conflict of interest most often be established?
In legislation, regulations, and guidance from securities regulators
Why is it essential for registrants to be transparent about their dual occupations and outside activities?
To prevent conflicts of interest that could impact client relationships
What would be required if a conflict of interest arises for a registered firm and Dealing Representative?
To address the conflict in the best interest of the client
What distinguishes Tom's action from Peter's action?
Tom's action violates his company's standard of conduct, while Peter's action complies with his company's rules.
In the scenario of Marianne and her client's cheque, what did Marianne do wrong?
Marianne deposited the cheque in her personal account instead of buying units for the client.
What consequences must the mutual fund dealer face in Example 2 according to the text?
The dealer must take disciplinary action and report the breach to the MFDA.
Which term best describes Tom's actions in using his office computer?
Unethical and non-compliant
What differentiates Example 2 from Example 1 in terms of ethical standards?
Example 2 involves both unethical behavior and a regulatory breach, unlike Example 1.
What legislation is responsible for protecting personal information for federally regulated private sector organizations in Canada?
PIPEDA
Which law gives individuals the right to access and request correction of their personal information held by federal government departments and agencies?
Privacy Act
In Canada, which provinces are exempt from having PIPEDA apply due to their own similar legislation?
Québec, Alberta, British Columbia
What type of organizations are covered by the Privacy Act in Canada?
Federally regulated private sector organizations
Which Canadian law limits the collection, use, and disclosure of personal information by federal government departments and agencies?
The Privacy Act
What is the main topic of Unit 2, Lesson 3 in Registrant Responsibilities?
Conflicts of Interest
How long does it take to complete the lesson on conflicts of interest?
1 hour
What is the primary duty of all registrants in the Canadian capital markets according to the text?
Identify and address conflicts of interest
Which of the following is NOT one of the criteria to be considered when determining whether a conflict is material?
Time spent on the conflict
Why is it important for registrants to provide an overview of common conflicts of interest?
To educate themselves and others about common conflicts
What is the consequence if you are unable to identify an individual at the time of opening an account?
You may accept an initial deposit, but not carry out further transactions until the client is identified
What action should be taken if a client is evasive or unwilling to provide sufficient information for adequate identification?
Inform your Compliance Department
Who are considered Politically Exposed Foreign Persons according to the text?
Individuals who held positions like head of state or government in a foreign country
What changes came into force in June 2020 regarding identification requirements?
Inclusion of Politically Exposed Persons (PEPs) both foreign and domestic
What is the protocol in Québec regarding health cards and identification purposes?
You are not allowed to ask to see a client’s health card, but may accept it if volunteered by the client
What action should be taken if a dealing representative is prohibited from entering into a private settlement with a client?
Avoid private settlements and ensure all settlements go through the dealer
In what scenarios would private investment schemes be considered permissible?
When the schemes are investment clubs with clients
What consequence might a dealing representative face if they fail to disclose their leadership role in the community to their firm?
The firm may impose terms and conditions to restrict client dealings
Which of the following actions is prohibited regarding non-monetary benefits between a dealing representative and a client?
Gifts and charitable donations flowing directly between parties
What is the appropriate course of action when a dealing representative and a client wish to invest together?
Disclose the investment club arrangement to the dealer
How should monetary or non-monetary benefits between dealing representatives and clients be handled?
All benefits must be approved by the dealer and flow through the dealer
What type of investments are considered prohibited for co-investment by dealing representatives and clients?
'Pyramid-like' schemes and other questionable investments
Why do dealing representatives need to avoid conflicts of interest related to significant assets?
'To avoid potential material conflicts of interest'
What is required for monetary or non-monetary benefits exchanged between dealing representatives and clients?
Approval by the dealer and flow through the dealer
What should a dealing representative do if they occupy a leadership role in the community?
Must restrict themselves from any dealings related to their role
Study Notes
Preparing for the Exam
- Spend at least 90 hours preparing for the exam
- Suggested approach: read the unit carefully, try online exercises, complete quizzes, and complete the sample exam
Course Access
- Go to www.ifse.ca and login with your user name and password
- Click on "Launch this course" under "My IFSE > Courses > Canadian Investment Funds Course"
Unit 1: Regulatory Environment
- Multiple regulatory bodies and regulations govern the sale of mutual funds in Canada
- Dealing Representatives need to be aware of these bodies and regulations
- Final exam: 100 multiple-choice questions, 3 hours, 100% of the grade, and a minimum mark of 60% to pass
Unit 2: Registrant Responsibilities
- Common conflicts of interest: dual occupations and outside activities, gifts, gratuities, and non-monetary benefits
- Conflicts of interest may arise from compensation, position of influence, or gifts received from clients
- Firm and Dealing Representatives must address conflicts of interest in the best interest of the client
Unethical Actions
- Unethical actions may not be regulatory breaches, but are still unethical
- Example: using office computers for personal internet use during lunch breaks
- Example: misappropriating client funds, which is both unethical and illegal
Privacy Legislation
- Collecting personal information: duty to keep it confidential, protected by legislation
- Privacy Act: federal government departments and agencies, limits collection, use, and disclosure of personal information
- Personal Information Protection and Electronic Documents Act (PIPEDA): private sector, rules for collecting, using, or disclosing personal information
Conflicts of Interest
- Introduction: conflicts of interest, identifying and managing conflicts
- Lesson objectives: provide overview, define conflict, discuss criteria for material conflicts, and address conflicts
- Time: approximately 1 hour to complete
Conflicts of Interest (continued)
- All registrants in the Canadian capital markets have a duty to identify and address conflicts of interest
- Documents may be Canadian or foreign equivalents
- Note: Health Cards from Ontario, Manitoba, and PEI are not allowed for identification purposes
- Identifying Politically Exposed Foreign Persons: individuals holding certain positions in a foreign country
Identification Requirements
- Changes to identification requirements: include Politically Exposed Persons (PEPs), domestic and foreign, and Heads of International Organizations (HIOs)
- Changes will be reflected in the next version of the course
Material Conflicts of Interest
- Real property or other assets of significant value: material conflict of interest that should be avoided
- Private investment schemes: prohibited, include investment clubs, co-investment, and pyramid-like schemes
- Private settlements: prohibited, must go through the dealer
Personal Financial Dealings
- Monetary or non-monetary benefits: cannot flow directly or indirectly to or from Dealing Representatives and clients
- All benefits must be approved by the dealer and flow through the dealer
- Positions of influence: must disclose role to the firm, and regulator may impose terms and conditions to restrict dealing with clients related to the role
Test your knowledge on common conflicts of interest related to dual occupations, outside activities, gifts, gratuities, non-monetary benefits, and positions of influence in the financial services industry. Find out how these factors can impact relationships with clients.
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