Mutual Fund Dealer Compliance Regime Quiz

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What must the Performance Report provide to clients?

Technical data on regulatory requirements

Easy-to-understand information about the cost-adjusted performance return of their investments (correct)

Detailed information on the current market trends

Complex information about investment strategies

Who is required to disclose the costs associated with the purchase or sale of a security before the transaction is made?

Investment analysts only

Market regulators

Mutual fund dealers and their Dealing Representatives (correct)

Investment bankers

Under what model are mutual fund dealers and their Dealing Representatives subject to regulatory requirements?

Investment Growth Model

Client Relationship Model and Client Focused Reforms (correct)

Client Satisfaction Model

Market Performance Model

What specific fees must be disclosed by the Dealing Representatives before a security transaction?

Ongoing investment fund management expense fees Signup and view all the answers

How frequently must the Performance Report be issued to clients?

Annually Signup and view all the answers

What is the main focus of the new standard introduced by CRM for pre-trade cost disclosure?

Disclosure of costs before making a security transaction Signup and view all the answers

Which group is required to provide clients with easy-to-understand information about their investments?

Mutual fund dealers and their Dealing Representatives Signup and view all the answers

What do mutual fund dealers and their Dealing Representatives need to comply with?

'Client Relationship Model and Client Focused Reforms' Signup and view all the answers

What is the primary goal of the compliance regime in a mutual fund dealer firm?

To ensure adherence to legislative and regulatory requirements Signup and view all the answers

Which of the following is not a prohibited practice in the mutual fund dealer industry?

Transparent communication with clients Signup and view all the answers

What is the role of compliance officers in a mutual fund dealer firm?

Everyone in the firm has a role to play in managing compliance Signup and view all the answers

What is the relationship between the Compliance Department and the compliance regime in a mutual fund dealer firm?

The Compliance Department is a component of the compliance regime Signup and view all the answers

What are the requirements for Client Communications in a mutual fund dealer firm?

Client communications must be transparent and accurate Signup and view all the answers

What is the role of the client relationship model (CRM) and the client focused reforms (CFR) in a mutual fund dealer firm?

They are requirements that must be explained by the Compliance Department Signup and view all the answers

What is the purpose of Relationship Disclosure Information (RDI) in a mutual fund dealer firm?

To provide clear and concise information about the firm's services Signup and view all the answers

What is the objective of effective risk management in a mutual fund dealer firm?

To identify potential risks and proactively develop strategies to mitigate them Signup and view all the answers

Which of the following is NOT a prohibited practice for a Dealing Representative?

Exceeding the legal limit of trades per day Signup and view all the answers

What is the purpose of excessive trading for a Dealing Representative?

Generating commissions or similar benefits for the Dealing Representative Signup and view all the answers

Which of the following is NOT a rule governing client communications?

Communications must not exceed a predetermined word limit Signup and view all the answers

Which of the following is a requirement for reporting to the MFDA Enforcement Department?

The presence of pre-signed forms Signup and view all the answers

What is the main focus of the rules governing client communications?

Ensuring compliance with regulations Signup and view all the answers

Which of the following is NOT an example of a conduct rule for Dealing Representatives?

Limiting the number of trades per day Signup and view all the answers

What is the purpose of supervision by the mutual fund dealer for client communications containing or referring to the rate of return?

Ensuring compliance with regulations Signup and view all the answers

What is the main purpose of the rules governing pre-signed forms?

Protecting clients and ensuring compliance with regulations Signup and view all the answers

Who can a Dealing Representative accept an appointment to have control or authority over their financial affairs from?

Immediate family members only Signup and view all the answers

What must a Dealing Representative do before accepting or acting upon an appointment to have control or authority over financial affairs?

Obtain written approval from their dealer Signup and view all the answers

What type of benefits are sometimes used as compensation for inappropriate activities carried on by Dealing Representatives?

Non-monetary benefits Signup and view all the answers

According to the MFDA rules, what relationship does Justin have with Derek?

Brother Signup and view all the answers

What is the exception permitted under the MFDA rules for accepting an appointment to have control or authority over financial affairs?

It applies to immediate family members only Signup and view all the answers

What is the purpose of obtaining written approval from the dealer before accepting or acting upon an appointment to have control or authority over financial affairs?

To ensure compliance with regulatory requirements Signup and view all the answers

What type of power of attorney did Derek give to Justin over his financial affairs?

General power of attorney Signup and view all the answers

What is the purpose of the exception permitted under the MFDA rules for accepting an appointment to have control or authority over financial affairs?

To allow Dealing Representatives to accept appointments from immediate family members only Signup and view all the answers

What is the primary function of the Compliance Department in relation to Dealing Representatives?

Supervising and ensuring regulatory compliance of Dealing Representatives Signup and view all the answers

Which of the following is not a responsibility of the Compliance Department towards Dealing Representatives?

Providing marketing support for Dealing Representatives Signup and view all the answers

Which legislation primarily governs the Client Relationship Model (CRM)?

National Instrument (NI) 31-103 (Registration) Signup and view all the answers

Which of the following is not a component of the Client Relationship Model (CRM)?

Account Opening Documentation Signup and view all the answers

Which of the following is not an aspect addressed by the Client Focused Reforms (CFR)?

Investment performance reporting Signup and view all the answers

What is the primary role of the Compliance Department in supporting Dealing Representatives?

Managing conflicts of interest and ensuring regulatory compliance Signup and view all the answers

Which of the following is not a function of the Compliance Department in relation to Dealing Representatives?

Providing legal representation for Dealing Representatives Signup and view all the answers

Which of the following is not governed by the Client Relationship Model (CRM)?

Account opening procedures Signup and view all the answers