What does NI31-103 cover?
It explains the education and experience required for individuals who wish to be registered as a PM.
What are the registration categories under NI31-103?
Ontario Securities Commission (OSC)
IIROC
MFDA
A dealer is a person/company that is in the business of trading in securities in the capacity of a principle or agent. What are the 5 dealer categories outlined in the book?
- Investment dealer
- MF dealer
- Scholarship plan dealer
- Exempt market dealer
- Restricted dealer
What are the 5 individual categories who are required to be registered to act on behalf of registered firms?
- Dealing representative
- Advising representative
- Associate advising representative
- Ultimate advising representative
- Chief compliance officer
Canada is the only _______ ____________ _______ without a national __________ ___________.
major industrialized nation
securities regulator
What is a self-regulatory organization (SRO)?
- organizations charged with monitoring the activities or their member firms
- ie. IROC and MFDA
Discuss Canada’s regulartory environment
It is under increasing scrutiny and pressure for reform with many market participants believing that overlapping regulations result in duplication of effort which is wasteful.
What does NI81-102 cover?
the framework for the mutual fund industry in Canada
List 7 activities that the Canadian Securities Administration (CSA) regulates or bans
- High closing (entering a higher bid price at closing to artificially increase the net asset value)
- Late trading (MF company allows a trader to enter an order after established cut off time) (illegal)
- Market timing (taking advantages of inefficiencies such as time differences)
- Client privacy requirements
- Trading securities on the internet
- Fairness policy
- Soft dollar arrangements
What is PIPEDA?
- Personal Information Protection and Electronic Document Act
- mandates the security of all personal and private data
What are the 10 principles of PIPEDA?
- Appoint privacy officer
- Disclose reason for collection
- Seek consent
- Limit to what is necessary
- Use for only stated purpose
- Ensure accuracy
- Protect in a manner consistent with sensitivity
- Have policies on collection, use, and disclosure
- Upon request, inform individual how their info is used
- Individuals must have ability to challenge the business’s compliance with PIPEDA
What does NP47-201 cover?
- trading securities using the internet and other electronic means
- it is the response of Canada’s regulators to dealing with the distribution of securities via the internet
Describe the fairness policy
- relates to the way an investment firm and its employees deal with clients in the matters of making and providing investment analysis, recommendations, or trade services
- ie. having standards for allocating trades
What is a soft dollar arrangement?
-an investment firm purchases services via commission dollars, rather than via an invoice for the goods or services
What are the 7 CFA standards for soft dollars arrangements?
- always seek best execution
- always disclose to clients
- select based on best quality in every regard
- evaluate how agreement with benefit client
- members must not direct brokerage from another account to pay for the client directed brokerage
- must plainly disclose arrangements and policies
- keep accurate records of agreements
The _________ and _________ (which together are ______) requires financial institutions to verify the identities of their clients and to report any activity tied to money laundering or terrorist financing
- Proceeds of Crime and Money Laundering
- Terrorist Financing Act
- PCMLTFA
What is FINTRAC?
- established by PCMLTFA to be responsible for ensuring compliance
- collects, analyzes, assesses and discloses information to assist in the detection, prevention, and deterrence of money laundering and terrorist financing
- investment and financial firms are required to submit reports to FINTRAC on suspicious transactions, large cash transactions, and terrorist property
What are 9 “best practices” that a firm should have guidelines on?
- best execution
- maintaining proper records
- changing investment objectives
- dealing with trading errors
- conflicts of interest
- personal trading
- confidentiality
- trading on non-public information
- fair dealing and soft dollar arrangements
