Canadian Securities (CSC) Test #1
EXAM Questions with 100% Correct
Answers | Verified | Updated (Actual
Exam) 2025\2026 LATEST VERSION!!
Retail firms - CORRECT ANSWER full service and discount brokerage firms for individuals.
Institutional firms - CORRECT ANSWER includes pension funds, mutual funds, and insurance companies.
Integrated firms - CORRECT ANSWER contains all aspects of retail and institutional firms.
Front office - CORRECT ANSWER in charge of portfolio management, marketing, sales, and trading.
Middle office - CORRECT ANSWER in charge of compliance, accounting, audits, and legal.
Back office - CORRECT ANSWER in charge of settlements and clearing.
Schedule I banks - CORRECT ANSWER large domestic banks. There are ownership restrictions on shares
- must be widely held.
Schedule II banks - CORRECT ANSWER large foreign banks. Can do same activities as domestic banks.
Schedule III banks - CORRECT ANSWER foreign branches of banks. They are limited, with a more
institutional focus.
Trust company - CORRECT ANSWER acts as a trustee.
Auction market - CORRECT ANSWER market in which securities are bought and sold by brokers acting
as agents for their clients (stock exchanges).
Dealer market - CORRECT ANSWER a network of marketplaces. Here, trades are conducted OTC and
consist of bonds and debentures.
Equity electronic trading system - CORRECT ANSWER competes with existing exchanges. They can only
trade stocks that are on an existing exchange. They may have benefits such as different hours, better
commission, etc.
Fixed-income electronic trading system - CORRECT ANSWER where almost all bonds are traded (such as
CanDeal).
Structured product - CORRECT ANSWER has the characteristics of debt, equity, and the investment
fund (can be in the form of principal-protected notes or index-linked guarantees).
IIROC (Investment Industry Regulatory Organization of Canada) - CORRECT ANSWER the Canadian
investment industry's SRO. It carries out its responsibilities through setting and enforcing rules regarding
the proficiency, business, and financial conduct of dealer firms and their registered employees.
MFDA (Mutual Fund Dealers Association) - CORRECT ANSWER the SRO that regulates the distribution
(dealer) side of the mutual fund industry in Canada.
, OSFI (Office of the Superintendent of Financial Institutions) - CORRECT ANSWER the federal regulatory
agency whose main responsibilities regarding insurance companies and segregated funds are to ensure
that the companies issuing the funds are financially solvent.
CDIC (Canadian Deposit Insurance Corporation) - CORRECT ANSWER a federal Crown Corporation
providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails.
CIPF (Canadian Investor Protection Fund) - CORRECT ANSWER a fund that protects eligible customers in
the event of the insolvency of an IIROC dealer member.
General acct. = $1M total
Separate acct. = $1M each
MFDA IPC (Mutual Fund Dealers Association Investor Protection Corporation) - CORRECT ANSWER
provides protection for eligible customers of insolvent MFDA member firms.
General acct. = $1M total
Separate acct. = $1M each
Gatekeeper - CORRECT ANSWER protects markets from potentially illegal client activity by collecting
information, monitoring activity, and reporting suspicious behaviour.
"Know your client" rule - CORRECT ANSWER salespersons must use diligence to learn essential facts
about the client (including every account and order) before entering into the relationship, in order to
make appropriate decisions for the client.
Ombudsman for Banking Services and Investments (OBSI) - CORRECT ANSWER an independent
organization that investigates customer complaints against financial services providers (non binding, but
may hurt the company's reputation if it does not comply).
Front running - CORRECT ANSWER when a broker puts his own account's order in front of a customer's
order, knowing the customer's order will move prices so the broker can make a profit.
National "Do not call" List (DNCL) - CORRECT ANSWER prohibits telemarketers from calling any number
on the list that has been registered for 31+ days.
Expansion - CORRECT ANSWER characterized by stable inflation, adequate inventory, start-ups exceed
bankruptcies, strong stock market, rising market activity (leading indicator), and falling unemployment.
Peak - CORRECT ANSWER when demand outstrips capacity, wages rise, interest rates fall, sales decline,
and inventory rises. Stock prices decline, and market activity declines.
Contraction - CORRECT ANSWER when economic activity declines, profits decline, spending declines,
and saving increases.
Trough - CORRECT ANSWER when the bond market rallies (prices rise as rates fall), and consumers start
spending again.
Recovery - CORRECT ANSWER when GDP returns to its previous peak, investment rises, and inflation is
set to fall further.
EXAM Questions with 100% Correct
Answers | Verified | Updated (Actual
Exam) 2025\2026 LATEST VERSION!!
Retail firms - CORRECT ANSWER full service and discount brokerage firms for individuals.
Institutional firms - CORRECT ANSWER includes pension funds, mutual funds, and insurance companies.
Integrated firms - CORRECT ANSWER contains all aspects of retail and institutional firms.
Front office - CORRECT ANSWER in charge of portfolio management, marketing, sales, and trading.
Middle office - CORRECT ANSWER in charge of compliance, accounting, audits, and legal.
Back office - CORRECT ANSWER in charge of settlements and clearing.
Schedule I banks - CORRECT ANSWER large domestic banks. There are ownership restrictions on shares
- must be widely held.
Schedule II banks - CORRECT ANSWER large foreign banks. Can do same activities as domestic banks.
Schedule III banks - CORRECT ANSWER foreign branches of banks. They are limited, with a more
institutional focus.
Trust company - CORRECT ANSWER acts as a trustee.
Auction market - CORRECT ANSWER market in which securities are bought and sold by brokers acting
as agents for their clients (stock exchanges).
Dealer market - CORRECT ANSWER a network of marketplaces. Here, trades are conducted OTC and
consist of bonds and debentures.
Equity electronic trading system - CORRECT ANSWER competes with existing exchanges. They can only
trade stocks that are on an existing exchange. They may have benefits such as different hours, better
commission, etc.
Fixed-income electronic trading system - CORRECT ANSWER where almost all bonds are traded (such as
CanDeal).
Structured product - CORRECT ANSWER has the characteristics of debt, equity, and the investment
fund (can be in the form of principal-protected notes or index-linked guarantees).
IIROC (Investment Industry Regulatory Organization of Canada) - CORRECT ANSWER the Canadian
investment industry's SRO. It carries out its responsibilities through setting and enforcing rules regarding
the proficiency, business, and financial conduct of dealer firms and their registered employees.
MFDA (Mutual Fund Dealers Association) - CORRECT ANSWER the SRO that regulates the distribution
(dealer) side of the mutual fund industry in Canada.
, OSFI (Office of the Superintendent of Financial Institutions) - CORRECT ANSWER the federal regulatory
agency whose main responsibilities regarding insurance companies and segregated funds are to ensure
that the companies issuing the funds are financially solvent.
CDIC (Canadian Deposit Insurance Corporation) - CORRECT ANSWER a federal Crown Corporation
providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails.
CIPF (Canadian Investor Protection Fund) - CORRECT ANSWER a fund that protects eligible customers in
the event of the insolvency of an IIROC dealer member.
General acct. = $1M total
Separate acct. = $1M each
MFDA IPC (Mutual Fund Dealers Association Investor Protection Corporation) - CORRECT ANSWER
provides protection for eligible customers of insolvent MFDA member firms.
General acct. = $1M total
Separate acct. = $1M each
Gatekeeper - CORRECT ANSWER protects markets from potentially illegal client activity by collecting
information, monitoring activity, and reporting suspicious behaviour.
"Know your client" rule - CORRECT ANSWER salespersons must use diligence to learn essential facts
about the client (including every account and order) before entering into the relationship, in order to
make appropriate decisions for the client.
Ombudsman for Banking Services and Investments (OBSI) - CORRECT ANSWER an independent
organization that investigates customer complaints against financial services providers (non binding, but
may hurt the company's reputation if it does not comply).
Front running - CORRECT ANSWER when a broker puts his own account's order in front of a customer's
order, knowing the customer's order will move prices so the broker can make a profit.
National "Do not call" List (DNCL) - CORRECT ANSWER prohibits telemarketers from calling any number
on the list that has been registered for 31+ days.
Expansion - CORRECT ANSWER characterized by stable inflation, adequate inventory, start-ups exceed
bankruptcies, strong stock market, rising market activity (leading indicator), and falling unemployment.
Peak - CORRECT ANSWER when demand outstrips capacity, wages rise, interest rates fall, sales decline,
and inventory rises. Stock prices decline, and market activity declines.
Contraction - CORRECT ANSWER when economic activity declines, profits decline, spending declines,
and saving increases.
Trough - CORRECT ANSWER when the bond market rallies (prices rise as rates fall), and consumers start
spending again.
Recovery - CORRECT ANSWER when GDP returns to its previous peak, investment rises, and inflation is
set to fall further.
