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Questions and Answers
What requirement must be met by anyone who sells securities or provides investment advice?
What requirement must be met by anyone who sells securities or provides investment advice?
- They must be registered with the securities regulator in the client's jurisdiction. (correct)
- They must comply with the company's internal policies.
- They need to obtain a professional certification every year.
- They must have completed a specific training program in all provinces.
What specific aspect does National Instrument 31-103 primarily address?
What specific aspect does National Instrument 31-103 primarily address?
- Taxation rules for mutual fund dealers.
- Registration categories and compliance requirements. (correct)
- Investment strategy guidelines for financial advisors.
- Procedures for client complaints.
What is the correct timeframe for reporting any material changes to CIRO by mutual fund dealers?
What is the correct timeframe for reporting any material changes to CIRO by mutual fund dealers?
- Within 7 business days after the change.
- Immediately upon the occurrence of the change.
- Within 3 business days after the change.
- Within 5 business days after the change. (correct)
Which of the following statements is true regarding unsolicited calls made by mutual fund sales representatives in Quebec?
Which of the following statements is true regarding unsolicited calls made by mutual fund sales representatives in Quebec?
Under NI 31-103, what is the official term for the registration category for mutual fund dealer representatives?
Under NI 31-103, what is the official term for the registration category for mutual fund dealer representatives?
Which of the following is NOT a part of the compliance requirements set forth by National Instrument 31-103?
Which of the following is NOT a part of the compliance requirements set forth by National Instrument 31-103?
What must a mutual fund dealer do when there is a change in their material information?
What must a mutual fund dealer do when there is a change in their material information?
What is the main restriction regarding unsolicited calls to non-clients in Manitoba and the Northwest Territories?
What is the main restriction regarding unsolicited calls to non-clients in Manitoba and the Northwest Territories?
Which action should a branch compliance officer take to ensure proper compliance with conflict-of-interest requirements for new sales representatives?
Which action should a branch compliance officer take to ensure proper compliance with conflict-of-interest requirements for new sales representatives?
Which statement about the registration of mutual fund dealers in different jurisdictions is correct?
Which statement about the registration of mutual fund dealers in different jurisdictions is correct?
Which of the following is considered a change of circumstance for a registrant's ongoing registration?
Which of the following is considered a change of circumstance for a registrant's ongoing registration?
What must the branch compliance officer do when a representative is transferring branches within the same company?
What must the branch compliance officer do when a representative is transferring branches within the same company?
In Quebec, what condition must be met for solicitation to be permitted?
In Quebec, what condition must be met for solicitation to be permitted?
What is explicitly prohibited by legislation concerning sales representatives in some regions?
What is explicitly prohibited by legislation concerning sales representatives in some regions?
What is a requirement for ongoing registration of dealing representatives?
What is a requirement for ongoing registration of dealing representatives?
How often should background checks be completed on sales representatives to comply with industry regulations?
How often should background checks be completed on sales representatives to comply with industry regulations?
What notice must be submitted when a mutual fund sales representative transfers outside their province?
What notice must be submitted when a mutual fund sales representative transfers outside their province?
During the first 90 days, what action must the branch compliance officer take before trading in new accounts?
During the first 90 days, what action must the branch compliance officer take before trading in new accounts?
How long does a dealer have to file a notice of change after learning of a registrant's bankruptcy?
How long does a dealer have to file a notice of change after learning of a registrant's bankruptcy?
What must occur after the initial 90-day period for a mutual fund sales representative's trades?
What must occur after the initial 90-day period for a mutual fund sales representative's trades?
Which statement is accurate regarding registration as a dealing representative in multiple jurisdictions?
Which statement is accurate regarding registration as a dealing representative in multiple jurisdictions?
What type of form must be filed for circumstances like wage garnishments?
What type of form must be filed for circumstances like wage garnishments?
What requirement is placed on the BCO regarding leveraged trades recommended by the sales representative?
What requirement is placed on the BCO regarding leveraged trades recommended by the sales representative?
Which of the following is NOT true about the transfer of a mutual fund dealer's license?
Which of the following is NOT true about the transfer of a mutual fund dealer's license?
What is the maximum number of professional development units that Quebec dealing representatives can accumulate in general subjects every two years?
What is the maximum number of professional development units that Quebec dealing representatives can accumulate in general subjects every two years?
Which of the following provinces allows sales representatives to advertise their registration with a securities commission?
Which of the following provinces allows sales representatives to advertise their registration with a securities commission?
How often must the BCO review client files handled by a salesperson during the heightened supervision period?
How often must the BCO review client files handled by a salesperson during the heightened supervision period?
What is the correct requirement for the BCO's approval of new accounts opened by a representative within the first 90 days of registration?
What is the correct requirement for the BCO's approval of new accounts opened by a representative within the first 90 days of registration?
What are the total PDUs required for Quebec dealing representatives over a two-year period?
What are the total PDUs required for Quebec dealing representatives over a two-year period?
In terms of account supervision, which of the following is true regarding Beatta's case after 120 days of registration?
In terms of account supervision, which of the following is true regarding Beatta's case after 120 days of registration?
What is the focus of the PDUs in compliance that Quebec representatives are required to complete?
What is the focus of the PDUs in compliance that Quebec representatives are required to complete?
What is the consequence for sales representatives if they falsely claim approval from a securities regulator?
What is the consequence for sales representatives if they falsely claim approval from a securities regulator?
What must dealers provide to clients regarding complaints?
What must dealers provide to clients regarding complaints?
Which types of complaints must be reported to CIRO?
Which types of complaints must be reported to CIRO?
What is a requirement for handling written client complaints?
What is a requirement for handling written client complaints?
Who is responsible for informing a client about a refused order deemed unsuitable?
Who is responsible for informing a client about a refused order deemed unsuitable?
What should happen with written complaints alleging serious misconduct?
What should happen with written complaints alleging serious misconduct?
What content needs to be included in the annual report filed with the AMF?
What content needs to be included in the annual report filed with the AMF?
What role does the compliance staff play in dealing with client complaints?
What role does the compliance staff play in dealing with client complaints?
Which of the following actions is NOT part of the complaint-handling procedure?
Which of the following actions is NOT part of the complaint-handling procedure?
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Study Notes
National Instrument 31-103
- Addresses registration categories, proficiency qualifications, registration requirements, categories of registration compliance requirements, disclosure, and dealings with clients.
- Individuals registered under NI 31-103 as “dealing representatives” can trade any securities that their sponsoring firm is permitted to trade.
Reporting Material Changes
- Mutual fund dealers that are members of CIRO must submit a report to CIRO within five business days of any material changes.
Soliciting New Business
- In Manitoba and Northwest Territories, soliciting mutual fund trades from non-clients through unsolicited calls or personal visits is prohibited.
- In Quebec, soliciting new business is permitted but requires compliance with specific requirements.
Conflict of Interest Requirements
- To ensure compliance with conflict-of-interest requirements, the Branch Compliance Officer (BCO) should review all trading accounts of new sales representatives for the first six months of employment.
Registration Requirements
- Dealing representatives must maintain their registration status if they wish to continue selling mutual funds.
- Ongoing requirements include filing a notice of change in information with securities regulators, transfers of registration, and termination.
- Changes in circumstances like wage garnishments or personal bankruptcy must be reported.
Branch Transfers and Terminations
- A branch transfer notice applies to transfers within the same province or territory.
- A notice of termination must be filed for any other types of transfers.
Supervision for New Hires
- During the first 90-day period, the BCO must approve all new accounts before any trading activity can take place.
- All subsequent trading activity must be reviewed and signed off by the BCO no later than one business day following the trade date.
- The BCO must review all leveraged trades recommended by the sales representative prior to trade execution.
Reporting Changes
- A notice of change must be submitted through the National Registration Database within five days of any change.
Multi-Jurisdictional Registration
- A candidate seeking registration in multiple jurisdictions through one application, pays one registration fee.
- In most provinces, registered sales representatives cannot advertise their registration with a securities commission or regulatory approval; exceptions apply in Alberta and British Columbia.
Continuing Education Requirements in Quebec
- Quebec dealing representatives must complete 30 Professional Development Units (PDUs) every two years.
- The PDUs are categorized:
- 10 PDUs in general subjects like finance or economics,
- 10 PDUs in compliance, ethics, or professional practice, and
- 10 PDUs in each certified sector.
- These requirements are administered by the Chambre de la sécurité financière.
Supervision After 120 Days
- After 120 days, the BCO must approve new accounts before or within one business day of trading activity in the account.
- The BCO must review the greater of 5 individual files or 10% of all client files handled by the salesperson in the preceding month.
Reporting Complaints
- Mutual fund dealers must file an annual report with the AMF including their complaint-handling policy and number and type of complaints received.
- Serious complaints, involving forgery, theft, or misappropriation of funds, must be reported to CIRO.
Minimum Procedures for Dealing with Written Client Complaints
- All written client complaints must be acknowledged in writing.
- The results of an investigation must be conveyed in writing to the client in due course, and handled by a qualified supervisor or compliance staff member.
- The registered salesperson involved and their supervisors should be informed of the complaint.
- Senior management should be notified of complaints alleging serious misconduct and of all legal actions resulting from such complaints.
Refusal of Unsuitable Orders
- The Branch Compliance Officer (BCO) is responsible for informing the client if an order is deemed unsuitable and unreasonable.
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