IFSE COMPREHENSIVE EXAM 2026 QUESTIONS AND
SOLUTIONS SCORED A+
✔✔When do Registered Retirement Income Funds mature and must be converted? -
✔✔In the year that an investor turns 71 years of age
✔✔A client can make contributions to a Registered Education Savings Plans of up to
how much per beneficiary over a maximum of how many years? - ✔✔Up to $50,000 per
beneficiary over a maximum of 31 years
✔✔The federal government provides a grant of
up to how much for each year a Registered Education Savings Plans beneficiary is
under 18, to a maximum of how much per beneficiary? - ✔✔The federal government
provides a grant of
up to $500 for each year the beneficiary is under 18, to a maximum of $7,200 per
beneficiary
✔✔What are the four types of registered investments pre-approved by the Canada
Revenue Agency? - ✔✔- mutual fund trusts
- pooled fund trusts
- mutual fund corporations
- investment corporations
✔✔What are two types of penalties for holding a prohibited investment in a registered
plan? - ✔✔• A 50% tax payable by the client on the total future market value of the
prohibited investment
• A 100% tax on any income or gains earned on the investments
✔✔Except in the case of a TFSA, the Income Tax Act of Canada requires that savings
through a registered vehicle
be held by what sort of entity? - ✔✔By a trustee
✔✔What constitutes acceptable identification documents? - ✔✔Should be:
- government issued
- unexpired
- with a unique identifier.
✔✔Issuers are required to file prospectuses how? - ✔✔Electronically via the System for
Electronic Document Analysis and Retrieval (SEDAR)
✔✔The Private issuer exemption is also not available if the issuer has over how many
employees? - ✔✔50 employees
,✔✔True or false: Securities distributed under the bank debt exemption may be freely
traded and provide liquidity. - ✔✔True. Securities distributed under the government debt
exemption, bank debt exemption, and short-term debt exemption may be freely traded
and provide liquidity.
✔✔True or false: Securities distributed under the mutual fund exemption offer
redemption facilities to provide liquidity. - ✔✔False. There is no mutual fund exemption.
✔✔Would would an EMD's typical work fee be for a $2mn issue? - ✔✔In the range of
1%, or $20,000.
✔✔Compare and contrast the Agency Agreement and Engagement Letter. - ✔✔- The
Agency Agreement is the formal agreement which establishes the specific terms of the
offering of securities including the amount to be offered, price, and jurisdictions of the
offering
- The Engagement Letter will very often leave the specific terms of the offering
undefined and subject to negotiation and acceptance by the issuer at a later date.
- The Agency Agreement supersedes and replaces the Engagement Letter
✔✔What is a "Min-Max" offering? - ✔✔Establishes:
the minimum dollar amount and number of securities which must be subscribed for in
aggregate to enable the first tranche of the financing transaction to close
• the maximum dollar amount and number of securities which will be subscribed for in
aggregate, over and above which no further securities will be issued in connection with
the offering
✔✔Who makes reps and warranties in a Subscription Agreement? - ✔✔Both the issuer
and investor
✔✔True or False: The Subscription Agreement includes the cash and broker warrant
compensation to be paid to the EMD - ✔✔True
✔✔What is the maximum permitted deduction for Canadian Exploration Expenses? -
✔✔100% (i.e. 100% x tax rate as a tax saving)
✔✔What is the maximum permitted deduction for Canadian Development Expenses? -
✔✔30% (i.e. 30% x tax rate as a tax saving)
✔✔A Declaration of Limited Partnership expires when? - ✔✔Every five years
✔✔What is the purpose of the Specified Investment Flow-Through ("SIFT") rules? - ✔✔-
Tax certain amounts earned by publicly-traded income trusts and limited partnerships
, ✔✔Which funds are subject to the regulations established in the "81 Series" of national
instruments? - ✔✔Public investment funds
✔✔Public investment funds include what types of investments? - ✔✔- mutual funds
- non-redeemable investment funds
- commodity pools
✔✔Segregated funds provide a guarantee of how much of the principal investment if
held for 10 years? - ✔✔75% or more
✔✔What do you need to do in order to offer segregated
funds? - ✔✔- Must be dually licensed as an insurance agent
- This must be disclosed to your EMD as an outside
business activity (OBA) before you can begin conducting insurance business
✔✔Which fund is offered under a prospectus-exemption, not subject to NI-81-102? -
✔✔Non-public investment fund
✔✔Which is a sub-set up public investment funds, not subject to NI 81-102, but subject
to 81-104? - ✔✔Commodity pools
✔✔Which fund is offered by prospectus, subject to NI 81-102? - ✔✔Public investment
fund
✔✔Which fund has active involvement/control by the manager and not subject to NI 81-
102? - ✔✔Non-investment fund
✔✔Which fund is issued by a reporting issuer but does not have the redemption feature
of a mutual fund, subject to NI 81-102? - ✔✔Public non-redeemable investment fund
✔✔What is the typical minimum denomination for an investment in an asset-backed
security? - ✔✔$1,000
✔✔Typically, most institutions do not make investments in asset-backed securities of
less than how much? - ✔✔$1 million
✔✔What type of account invests with the purpose of pooling investments for its
managed account clients and has a redemption feature? - ✔✔A non-redeemable mutual
fund
✔✔In order to determine a taxable capital gain, the capital gain is multiplied by an
"inclusion rate" of how much? - ✔✔50%
SOLUTIONS SCORED A+
✔✔When do Registered Retirement Income Funds mature and must be converted? -
✔✔In the year that an investor turns 71 years of age
✔✔A client can make contributions to a Registered Education Savings Plans of up to
how much per beneficiary over a maximum of how many years? - ✔✔Up to $50,000 per
beneficiary over a maximum of 31 years
✔✔The federal government provides a grant of
up to how much for each year a Registered Education Savings Plans beneficiary is
under 18, to a maximum of how much per beneficiary? - ✔✔The federal government
provides a grant of
up to $500 for each year the beneficiary is under 18, to a maximum of $7,200 per
beneficiary
✔✔What are the four types of registered investments pre-approved by the Canada
Revenue Agency? - ✔✔- mutual fund trusts
- pooled fund trusts
- mutual fund corporations
- investment corporations
✔✔What are two types of penalties for holding a prohibited investment in a registered
plan? - ✔✔• A 50% tax payable by the client on the total future market value of the
prohibited investment
• A 100% tax on any income or gains earned on the investments
✔✔Except in the case of a TFSA, the Income Tax Act of Canada requires that savings
through a registered vehicle
be held by what sort of entity? - ✔✔By a trustee
✔✔What constitutes acceptable identification documents? - ✔✔Should be:
- government issued
- unexpired
- with a unique identifier.
✔✔Issuers are required to file prospectuses how? - ✔✔Electronically via the System for
Electronic Document Analysis and Retrieval (SEDAR)
✔✔The Private issuer exemption is also not available if the issuer has over how many
employees? - ✔✔50 employees
,✔✔True or false: Securities distributed under the bank debt exemption may be freely
traded and provide liquidity. - ✔✔True. Securities distributed under the government debt
exemption, bank debt exemption, and short-term debt exemption may be freely traded
and provide liquidity.
✔✔True or false: Securities distributed under the mutual fund exemption offer
redemption facilities to provide liquidity. - ✔✔False. There is no mutual fund exemption.
✔✔Would would an EMD's typical work fee be for a $2mn issue? - ✔✔In the range of
1%, or $20,000.
✔✔Compare and contrast the Agency Agreement and Engagement Letter. - ✔✔- The
Agency Agreement is the formal agreement which establishes the specific terms of the
offering of securities including the amount to be offered, price, and jurisdictions of the
offering
- The Engagement Letter will very often leave the specific terms of the offering
undefined and subject to negotiation and acceptance by the issuer at a later date.
- The Agency Agreement supersedes and replaces the Engagement Letter
✔✔What is a "Min-Max" offering? - ✔✔Establishes:
the minimum dollar amount and number of securities which must be subscribed for in
aggregate to enable the first tranche of the financing transaction to close
• the maximum dollar amount and number of securities which will be subscribed for in
aggregate, over and above which no further securities will be issued in connection with
the offering
✔✔Who makes reps and warranties in a Subscription Agreement? - ✔✔Both the issuer
and investor
✔✔True or False: The Subscription Agreement includes the cash and broker warrant
compensation to be paid to the EMD - ✔✔True
✔✔What is the maximum permitted deduction for Canadian Exploration Expenses? -
✔✔100% (i.e. 100% x tax rate as a tax saving)
✔✔What is the maximum permitted deduction for Canadian Development Expenses? -
✔✔30% (i.e. 30% x tax rate as a tax saving)
✔✔A Declaration of Limited Partnership expires when? - ✔✔Every five years
✔✔What is the purpose of the Specified Investment Flow-Through ("SIFT") rules? - ✔✔-
Tax certain amounts earned by publicly-traded income trusts and limited partnerships
, ✔✔Which funds are subject to the regulations established in the "81 Series" of national
instruments? - ✔✔Public investment funds
✔✔Public investment funds include what types of investments? - ✔✔- mutual funds
- non-redeemable investment funds
- commodity pools
✔✔Segregated funds provide a guarantee of how much of the principal investment if
held for 10 years? - ✔✔75% or more
✔✔What do you need to do in order to offer segregated
funds? - ✔✔- Must be dually licensed as an insurance agent
- This must be disclosed to your EMD as an outside
business activity (OBA) before you can begin conducting insurance business
✔✔Which fund is offered under a prospectus-exemption, not subject to NI-81-102? -
✔✔Non-public investment fund
✔✔Which is a sub-set up public investment funds, not subject to NI 81-102, but subject
to 81-104? - ✔✔Commodity pools
✔✔Which fund is offered by prospectus, subject to NI 81-102? - ✔✔Public investment
fund
✔✔Which fund has active involvement/control by the manager and not subject to NI 81-
102? - ✔✔Non-investment fund
✔✔Which fund is issued by a reporting issuer but does not have the redemption feature
of a mutual fund, subject to NI 81-102? - ✔✔Public non-redeemable investment fund
✔✔What is the typical minimum denomination for an investment in an asset-backed
security? - ✔✔$1,000
✔✔Typically, most institutions do not make investments in asset-backed securities of
less than how much? - ✔✔$1 million
✔✔What type of account invests with the purpose of pooling investments for its
managed account clients and has a redemption feature? - ✔✔A non-redeemable mutual
fund
✔✔In order to determine a taxable capital gain, the capital gain is multiplied by an
"inclusion rate" of how much? - ✔✔50%
