40 Questions
What must the Performance Report provide to clients?
Easy-to-understand information about the cost-adjusted performance return of their investments
Who is required to disclose the costs associated with the purchase or sale of a security before the transaction is made?
Mutual fund dealers and their Dealing Representatives
Under what model are mutual fund dealers and their Dealing Representatives subject to regulatory requirements?
Client Relationship Model and Client Focused Reforms
What specific fees must be disclosed by the Dealing Representatives before a security transaction?
Ongoing investment fund management expense fees
How frequently must the Performance Report be issued to clients?
Annually
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
Which group is required to provide clients with easy-to-understand information about their investments?
Mutual fund dealers and their Dealing Representatives
What do mutual fund dealers and their Dealing Representatives need to comply with?
'Client Relationship Model and Client Focused Reforms'
What is the primary goal of the compliance regime in a mutual fund dealer firm?
To ensure adherence to legislative and regulatory requirements
Which of the following is not a prohibited practice in the mutual fund dealer industry?
Transparent communication with clients
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
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
What are the requirements for Client Communications in a mutual fund dealer firm?
Client communications must be transparent and accurate
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
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
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
Which of the following is NOT a prohibited practice for a Dealing Representative?
Exceeding the legal limit of trades per day
What is the purpose of excessive trading for a Dealing Representative?
Generating commissions or similar benefits for the Dealing Representative
Which of the following is NOT a rule governing client communications?
Communications must not exceed a predetermined word limit
Which of the following is a requirement for reporting to the MFDA Enforcement Department?
The presence of pre-signed forms
What is the main focus of the rules governing client communications?
Ensuring compliance with regulations
Which of the following is NOT an example of a conduct rule for Dealing Representatives?
Limiting the number of trades per day
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
What is the main purpose of the rules governing pre-signed forms?
Protecting clients and ensuring compliance with regulations
Who can a Dealing Representative accept an appointment to have control or authority over their financial affairs from?
Immediate family members only
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
What type of benefits are sometimes used as compensation for inappropriate activities carried on by Dealing Representatives?
Non-monetary benefits
According to the MFDA rules, what relationship does Justin have with Derek?
Brother
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
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
What type of power of attorney did Derek give to Justin over his financial affairs?
General power of attorney
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
What is the primary function of the Compliance Department in relation to Dealing Representatives?
Supervising and ensuring regulatory compliance of Dealing Representatives
Which of the following is not a responsibility of the Compliance Department towards Dealing Representatives?
Providing marketing support for Dealing Representatives
Which legislation primarily governs the Client Relationship Model (CRM)?
National Instrument (NI) 31-103 (Registration)
Which of the following is not a component of the Client Relationship Model (CRM)?
Account Opening Documentation
Which of the following is not an aspect addressed by the Client Focused Reforms (CFR)?
Investment performance reporting
What is the primary role of the Compliance Department in supporting Dealing Representatives?
Managing conflicts of interest and ensuring regulatory compliance
Which of the following is not a function of the Compliance Department in relation to Dealing Representatives?
Providing legal representation for Dealing Representatives
Which of the following is not governed by the Client Relationship Model (CRM)?
Account opening procedures
Test your knowledge on the Compliance regime of a mutual fund dealer, the role of the Compliance Department and compliance officers, requirements under CRM and CFR, Relationship Disclosure Information, Client Communications, and prohibited practices like pre-signed forms and excess trading.
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