IFSE Exam Preparation Flashcards PDF

Flashcards for IFSE Exam Preparation 1. Regulatory Bodies Front: What are the main regulatory bodies overseeing mutual funds in Canada? Back: ​ Provincial securities commissions ​ Canadian Securities Administrators (CSA) ​ Mutual Fund Dealers Association of Canada (MFDA) ​ Aut...

Flashcards for IFSE Exam Preparation 1. Regulatory Bodies Front: What are the main regulatory bodies overseeing mutual funds in Canada? Back: ​ Provincial securities commissions ​ Canadian Securities Administrators (CSA) ​ Mutual Fund Dealers Association of Canada (MFDA) ​ Autorité des marchés financiers (AMF) (Quebec) ​ Investment Industry Regulatory Organization of Canada (IIROC) ​ Ombudsman for Banking Services and Investments (OBSI) ​ Office of the Superintendent of Financial Institutions Canada (OSFI) Front: What is the role of the Provincial Securities Commissions? Back: They administer each jurisdiction's Securities Act, set registration standards, and enforce securities regulations. Front: What is the function of the Canadian Securities Administrators (CSA)? Back: A policy-making body that coordinates securities regulations across Canada to ensure fair and efficient markets. Front: What does the Mutual Fund Dealers Association of Canada (MFDA) do? Back: Regulates mutual fund dealers outside Quebec, ensuring investor protection and ethical business conduct. Front: What is the role of IIROC? Back: The national self-regulatory organization for investment dealers, ensuring high practice standards. 2. Legislation and Regulations Front: What are the key legislative acts governing mutual funds in Canada? Back: ​ The Securities Acts (provincial laws regulating securities transactions) ​ National Instruments (harmonized securities regulations) ​ MFDA Rules (standards for mutual fund dealers) ​ Anti-Money Laundering (AML) laws ​ Privacy Laws (PIPEDA, Privacy Act) ​ Canada's Anti-Spam Law (CASL) ​ US Foreign Account Tax Compliance Act (FATCA) Front: What is NI 31-103? Back: National Instrument covering registration requirements and exemptions for securities professionals. Front: What is NI 81-101? Back: Mutual Fund Prospectus Disclosure, requiring funds to provide essential investor information. Front: What is NI 81-102? Back: Main regulatory instrument governing the management, buying, and selling of mutual funds. Front: What is NI 81-105? Back: Ensures mutual funds are sold in the best interest of investors, regulating sales practices. 3. Anti-Money Laundering (AML) & Compliance Front: What is the purpose of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)? Back: Detect, deter, and prevent money laundering and terrorist financing in Canada. Front: What does FINTRAC do? Back: Canada's financial intelligence unit that monitors and reports suspicious financial transactions. Front: What are the four key AML responsibilities of a Dealing Representative? Back: ​ Reporting to FINTRAC ​ Record-keeping ​ Confirming client identity ​ Identifying politically exposed persons 4. Privacy & Consumer Protection Front: What does PIPEDA regulate? Back: Private sector privacy law governing the collection, use, and disclosure of personal information. Front: What is the purpose of Canada's Anti-Spam Law (CASL)? Back: Prohibits sending commercial electronic messages (CEMs) without consent, requiring clear identification and opt-out options. Front: What is the National Do Not Call List (DNCL)? Back: A registry that prevents telemarketers from calling consumers without permission. 5. US Foreign Account Tax Compliance Act (FATCA) Front: What is FATCA? Back: A US law requiring financial institutions to report accounts held by US persons to prevent tax evasion. Front: What happens if a Canadian financial institution does not comply with FATCA? Back: A 30% withholding tax is imposed on US-source payments to that institution. Front: What must financial institutions do under FATCA? Back: ​ Identify clients who are US persons ​ Report their accounts to the Canada Revenue Agency (CRA) ​ CRA reports to the US Internal Revenue Service (IRS) 6. Key Definitions & Concepts Front: What is a Mutual Fund? Back: A pool of investments managed by professionals, allowing investors to buy shares in a diversified portfolio. Front: What is KYC (Know Your Client)? Back: A process that requires financial professionals to gather client financial details to assess suitability. Front: What is a Self-Regulatory Organization (SRO)? Back: An industry body (e.g., MFDA, IIROC) that enforces compliance with securities laws and ethical conduct. Front: What is Investor Protection? Back: Regulations ensuring investors are treated fairly, given full disclosure, and protected from fraud.