KYC Obligations and New Client Application Form
38 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What type of investments fall under the medium risk rating?

  • Blue chip and mid cap equities (correct)
  • Investments in smaller companies
  • Investments with high volatility
  • Fixed income investments
  • Which risk rating applies to growth-oriented investors willing to accept significant short-term fluctuations?

  • Low-Medium
  • Medium
  • Medium-High
  • High (correct)
  • Investments under which risk rating include those that invest in smaller companies?

  • High
  • Medium-High (correct)
  • Medium
  • Low-Medium
  • Which risk rating applies to investors seeking moderate growth over a longer period of time?

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

    What type of investors does the medium-high risk rating apply to?

    <p>Growth-oriented investors</p> Signup and view all the answers

    Which investments are characteristic of the low-medium risk rating?

    <p>Fixed income investments</p> Signup and view all the answers

    For which risk rating are investors willing to accept significant short-term fluctuations for potentially higher returns?

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

    Who is ultimately responsible for reviewing and updating KYC information for clients?

    <p>The financial advisor</p> Signup and view all the answers

    What happens if the information on the KYC Form appears unreasonable given the client's circumstances?

    <p>The investigation into suitability disputes will go beyond the information on the KYC Form</p> Signup and view all the answers

    Who should review and approve the NCAF/KYC Form?

    <p>An officer, partner, director, or Branch Manager of the dealer</p> Signup and view all the answers

    What must be completed for each new client account that is opened?

    <p>Complete KYC information</p> Signup and view all the answers

    What is the purpose of the KYC Form during disputes?

    <p>To determine if the financial advisor knew the client and recommended suitable investments</p> Signup and view all the answers

    Who should receive a signed copy of the NCAF/KYC Form?

    <p>The client</p> Signup and view all the answers

    What is the purpose of the KYC process?

    <p>To ensure that recommended investments are suitable for the client</p> Signup and view all the answers

    What are some examples of investments under the high risk rating?

    <p>Science and technology, natural resources, and precious metals</p> Signup and view all the answers

    What type of funds may invest in derivatives, engage in short selling, or use leverage?

    <p>Hedge funds</p> Signup and view all the answers

    Why is it important for advisors to resist assessing a higher risk profile than necessary even when a client desires higher returns?

    <p>To protect the client from assuming too much risk</p> Signup and view all the answers

    In what form are risk profiles often expressed?

    <p>In numerical percentages</p> Signup and view all the answers

    Which of the following investments would most likely be classified under a high risk rating?

    <p>Investment in a hedge fund that uses leverage and derivatives</p> Signup and view all the answers

    What should advisors do when a client's desire for returns does not align with their risk profile?

    <p>Follow prescribed steps to protect the client from taking on too much risk</p> Signup and view all the answers

    Why do higher expected returns usually come with higher risk?

    <p>Because investors demand more risk for higher returns</p> Signup and view all the answers

    What guideline advises advisors against assessing higher risk profiles solely to meet client return expectations?

    <p>CP 31-103</p> Signup and view all the answers

    Which of the following terms describes funds investing in emerging markets, science and technology, and precious metals?

    <p>High-risk funds</p> Signup and view all the answers

    What is the primary reason advisors are advised to resist assessing higher risk profiles than necessary?

    <p>To protect the client from taking on too much risk</p> Signup and view all the answers

    What is the primary concern for the Dealing Representative when an investor wishes to purchase high-risk speculative investments?

    <p>The potential negative impact on the investor's financial situation</p> Signup and view all the answers

    What does determining a client's liquidity needs involve?

    <p>Determining the client's ability to cover ongoing expenses and planned expenditures</p> Signup and view all the answers

    What are the reasons for determining if a client will use leverage or borrow to invest?

    <p>To assess the client's ability to meet debt obligations and to determine whether leveraged investing will be suitable</p> Signup and view all the answers

    What are the factors that a Dealing Representative must consider when assessing whether a client can tolerate potential losses from a high-risk investment?

    <p>The client's liquidity needs and borrowing capacity</p> Signup and view all the answers

    What is the primary role of a Dealing Representative when advising a client on investments?

    <p>Ensuring that the client can tolerate potential losses from high-risk investments</p> Signup and view all the answers

    What is the purpose of determining a client's liquidity needs?

    <p>To assess the client's ability to access their investments to meet their ongoing and short-term expenses</p> Signup and view all the answers

    What is the primary concern when a client wishes to use leverage or borrow to invest?

    <p>The client's ability to meet debt obligations</p> Signup and view all the answers

    What is the primary purpose of setting out investment goals for a client's account or portfolio?

    <p>To comply with regulatory requirements</p> Signup and view all the answers

    What should investment goals be set out in, according to the CP 31-103?

    <p>Terms that are specific and measurable</p> Signup and view all the answers

    What is an example of a client's investment need or objective?

    <p>To save for retirement</p> Signup and view all the answers

    What should a registrant consider setting out, according to the CP 31-103?

    <p>Investment return assumptions</p> Signup and view all the answers

    What is the purpose of an investment policy statement, according to the CP 31-103?

    <p>To develop investment goals for a client's account or portfolio</p> Signup and view all the answers

    Why is it important to set out investment goals in specific and measurable terms?

    <p>To ensure that investment goals are clear and achievable</p> Signup and view all the answers

    What should a registrant provide clients with, according to the CP 31-103?

    <p>An opportunity to express their investment needs and objectives in non-technical terms</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Browser