AFM 121 EXAM QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS GRADED A++
What are the two regulatory organizations
the office of the superintendent of financial institutions (OSFI) and the Canadian Deposit
Insurance Corporation (CDIC)
what does the OSFI do
regulates and supervises banks, insurance, trust and loan companies pension plans.
DOES NOT supervise Canadian securities industry - this is done provincially
who are the CDIC
- federal crown corporation
- insures deposits up to $100k per depositor in each financial institution
- you personally can be insured for a total greater amount than 100k -insurance is for
each "account" - bank acc, mortgage etc.
- this insurance is not for mutual funds, stocks, bonds
T/F - The Canadian securities industry is regulated federally
False the Canadian securities industry is regulated provincially
T/F - each province has its own securities commission
,True
What is the securities commission in Ontario called?
Ontario Securities Commission (OSC)
How was the Canadian Securities Association formed by
it was formed by all 14 securities commissions to provide a national umbrella group to
co-ordinate provincial activities
T/F - efforts to set up national securities commissions has been resisted by all
provincial commissions
False, the efforts have only been resisted by some of the provincial commissions
What is an SRO
an organization owned by its members that regulate and police themselves
what does SRO stand for
The Self-Regulatory Organizations
what are some examples of SROs
TSX, Mutual Funds Dealers Associations (MFDA), Investment Industry Regulatory
Organization of Canada (IIROC)
what does IIROC oversee
IIROC oversees all investment dealer and trading activity in the Canadian debt and
equity markets
what does IIROC monitor
IIROC monitor member firms for capital adequacy and business conduct
what is capital adequacy
, the amount of money (capital) that firms must set aside when holding bank
deposits/making loans/raising capital for corporations
- if firms require less capital - their returns on this capital will be greater. However,
greater the risk to these firms and overall financial system.
T/F - IIROC serves as the securities industry regulator
True, IIROC formulates standards and policies for Caqnadian debt and equity markets
and monitor sales and trading activities of member firms
If you commit illegal trading activity you are likely to hear from the CRA
FALSE, you will likely hear from IIROC
T/F - IIROC tries to ensure the integrity of the marketplace and protection of
investors
True
T/F - IIROC is not that important to a properly functioning Canadian capital
environment
false IIROC is an extremely important part of a properly functioning Canadian capital
environment
T/F - the canadian financial institutions were fare more affected by the financial
crises than US/ Euro companies
False Canadian financial institutions were not nearly as affected as US / Euro
Companies
when and why was the MFDA created
created in 1997 as a result of growth and need for regulation in mutual fund industry
VERIFIED SOLUTIONS GRADED A++
What are the two regulatory organizations
the office of the superintendent of financial institutions (OSFI) and the Canadian Deposit
Insurance Corporation (CDIC)
what does the OSFI do
regulates and supervises banks, insurance, trust and loan companies pension plans.
DOES NOT supervise Canadian securities industry - this is done provincially
who are the CDIC
- federal crown corporation
- insures deposits up to $100k per depositor in each financial institution
- you personally can be insured for a total greater amount than 100k -insurance is for
each "account" - bank acc, mortgage etc.
- this insurance is not for mutual funds, stocks, bonds
T/F - The Canadian securities industry is regulated federally
False the Canadian securities industry is regulated provincially
T/F - each province has its own securities commission
,True
What is the securities commission in Ontario called?
Ontario Securities Commission (OSC)
How was the Canadian Securities Association formed by
it was formed by all 14 securities commissions to provide a national umbrella group to
co-ordinate provincial activities
T/F - efforts to set up national securities commissions has been resisted by all
provincial commissions
False, the efforts have only been resisted by some of the provincial commissions
What is an SRO
an organization owned by its members that regulate and police themselves
what does SRO stand for
The Self-Regulatory Organizations
what are some examples of SROs
TSX, Mutual Funds Dealers Associations (MFDA), Investment Industry Regulatory
Organization of Canada (IIROC)
what does IIROC oversee
IIROC oversees all investment dealer and trading activity in the Canadian debt and
equity markets
what does IIROC monitor
IIROC monitor member firms for capital adequacy and business conduct
what is capital adequacy
, the amount of money (capital) that firms must set aside when holding bank
deposits/making loans/raising capital for corporations
- if firms require less capital - their returns on this capital will be greater. However,
greater the risk to these firms and overall financial system.
T/F - IIROC serves as the securities industry regulator
True, IIROC formulates standards and policies for Caqnadian debt and equity markets
and monitor sales and trading activities of member firms
If you commit illegal trading activity you are likely to hear from the CRA
FALSE, you will likely hear from IIROC
T/F - IIROC tries to ensure the integrity of the marketplace and protection of
investors
True
T/F - IIROC is not that important to a properly functioning Canadian capital
environment
false IIROC is an extremely important part of a properly functioning Canadian capital
environment
T/F - the canadian financial institutions were fare more affected by the financial
crises than US/ Euro companies
False Canadian financial institutions were not nearly as affected as US / Euro
Companies
when and why was the MFDA created
created in 1997 as a result of growth and need for regulation in mutual fund industry
