KYC Form 3.0 - Information about Investor/Lender Quiz
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KYC Form 3.0 - Information about Investor/Lender Quiz

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Questions and Answers

Which type of lender provides short-term loans between 6 to 24 months with higher interest rates?

  • Mortgage Investment Corporations (MICs) (correct)
  • Chartered Banks
  • Credit Unions
  • Private Lenders

    • What document must a Mortgage Investment Corporation (MIC) provide potential investors with in order to sell its shares?

  • Prospectus
  • Offering Memorandum (correct)
  • Stock Certificate
  • Shareholder Agreement

    • Which type of investors can invest in a private corporation using an Offering Memorandum instead of a prospectus?

  • Company Insiders
  • Accredited Investors (correct)
  • Family Members
  • General Public

    • What is the main security that an investor gets when investing in a Mortgage Investment Corporation (MIC)?

    <p>Shares</p> Signup and view all the answers

    Which type of lender is known for providing products characterized by short-term loans and higher interest rates?

    <p>Mortgage Finance Companies (MFCs)</p> Signup and view all the answers

    Who can invest in a private corporation using an Offering Memorandum instead of a prospectus?

    <p>Company Insiders</p> Signup and view all the answers

    Which type of entity is considered a member of a designated class of lenders and investors according to the text?

    <p>A corporation under the National Housing Act</p> Signup and view all the answers

    Who among the following is NOT considered a member of a designated class of lenders and investors as per the text?

    <p>An individual with a mortgage</p> Signup and view all the answers

    Which entity is not explicitly mentioned as a member of a designated class in the text?

    <p>An insurance company</p> Signup and view all the answers

    Who can be considered part of a designated class of lenders and investors if acting as an agent or trustee for fully managed accounts?

    <p>Registered adviser or dealer under the Securities Act</p> Signup and view all the answers

    Which of the following entities is categorized as a member of a designated class based on the text provided?

    <p>An approved financial institution</p> Signup and view all the answers

    What is the primary difference in how an investor participates in a MIC compared to investing directly in mortgages?

    <p>An investor buys shares in a MIC instead of directly investing in mortgages.</p> Signup and view all the answers

    In a corporate bankruptcy, how are shareholders usually treated compared to other parties?

    <p>Shareholders are typically the last to receive payment after creditors in a bankruptcy process.</p> Signup and view all the answers

    What factor prevents most Mortgage Investment Corporations (MICs) from guaranteeing share redemption?

    <p>Rules imposed by the Income Tax Act regarding shareholders.</p> Signup and view all the answers

    Why do most Mortgage Investment Corporations (MICs) not specify the time it will take for share redemption?

    <p>Due to rules imposed by the Income Tax Act regarding investors.</p> Signup and view all the answers

    What does O.Reg. 188/08 define in relation to Mortgage Brokerages?

    <p>Requirements for disclosure forms for borrowers and investors/lenders.</p> Signup and view all the answers

    'What is the significance of the designated class of lenders and investors defined in O.Reg. 188/08?'

    <p>They exempt members from receiving certain disclosures related to mortgages.</p> Signup and view all the answers

    What is the maximum total debt amount allowed by a syndicated mortgage in relation to the fair market value of the property?

    <p>90%</p> Signup and view all the answers

    What is the limitation on the term of the debt obligation related to a syndicated mortgage?

    <p>Must be the same as the syndicated mortgage term</p> Signup and view all the answers

    According to FSRA, what defines a 'Permitted Client'?

    <p>Those with significant financial experience and knowledge</p> Signup and view all the answers

    Why is it illegal to promise 'guaranteed' high returns in syndicated mortgage investments?

    <p>Because it is against the law</p> Signup and view all the answers

    What is typically the payment priority for investors in syndicated mortgages?

    <p>Second in line for repayment</p> Signup and view all the answers

    In general, what is the relationship between rate of return and investment risk in syndicated mortgages?

    <p>Higher return = Higher risk</p> Signup and view all the answers

    Why is it important to know your investor?

    <p>To provide accurate advice and recommendations</p> Signup and view all the answers

    What is the primary use of FSRA’s Form 3.0?

    <p>In non-qualified syndicated mortgages</p> Signup and view all the answers

    What are the two classifications of syndicated mortgages as of July 1, 2018?

    <p>Qualified Syndicated Mortgage and Non-Qualified Syndicated Mortgage</p> Signup and view all the answers

    What are the requirements needed to classify an investment as a Qualified Syndicated Mortgage?

    <p>Arranged through a bank</p> Signup and view all the answers

    Why is FSRA’s Form 3.0 useful for non-syndicated private mortgage transactions?

    <p>It contains information required to meet the KYC needs</p> Signup and view all the answers

    What is the significance of the July 1, 2018 subdivision of syndicated mortgages?

    <p>To clarify distinctions between different types of syndicated mortgages</p> Signup and view all the answers

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