AFM 121 CH 2 - THE CANADIAN SECURITIES INDUSTRY EXAM
QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS
GRADED A++
Canadian securities industry is regulated provincially through...
laws and securities commissions
what kind of responsibility are the securities commissions?
a provincial responsibility
example of securities regulation commissions
Ontario securities commission (OSC) and BC securities commission (BCSC)
securities commissions delegate some of their power to...
self regulatory organizations (SROs)
self regulatory organizations (SROs) are responsible for...
providing oversight and enforcement for some rules
3 examples of SROs
Investment industry regulatory organization of Canada (IIROC), TSX, TSX venture
exchange
3 other SRO players are
The Canadian depository for securities (CDS), Canadian investor protection fund
(CIPF), Canadian securities institute (CSI)
Canadian depository for securities (CDS)
clears or settles trades, intermediary between buyers and sellers, owned by TMX
, Canadian investor protection fund (CIPF)
insures brokerage account contents
Canadian securities institute (CSI)
offers courses required for licensing regulators and is owned by Moody's
investment dealers (IDs)
- small number of national-scope investment dealers
- many small "boutique" investment dealers
- multiple departments within an investment dealer
2 types of brokers
1) full service 2) discount
full service brokers
offer "high-touch" services and advice for high fees
discount brokers
offer limited services, such as stock and bond trade execution, but no advice, for low
fees
leverage
- financial services industry is highly leveraged
- short term borrowings finance long-term investments (borrow short, lend long)
risks with "borrow short, lend long" strategy are due to...
fluctuating interest rates
how did technological changes, especially the evolution of telecommunications
change the financial industry?
QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS
GRADED A++
Canadian securities industry is regulated provincially through...
laws and securities commissions
what kind of responsibility are the securities commissions?
a provincial responsibility
example of securities regulation commissions
Ontario securities commission (OSC) and BC securities commission (BCSC)
securities commissions delegate some of their power to...
self regulatory organizations (SROs)
self regulatory organizations (SROs) are responsible for...
providing oversight and enforcement for some rules
3 examples of SROs
Investment industry regulatory organization of Canada (IIROC), TSX, TSX venture
exchange
3 other SRO players are
The Canadian depository for securities (CDS), Canadian investor protection fund
(CIPF), Canadian securities institute (CSI)
Canadian depository for securities (CDS)
clears or settles trades, intermediary between buyers and sellers, owned by TMX
, Canadian investor protection fund (CIPF)
insures brokerage account contents
Canadian securities institute (CSI)
offers courses required for licensing regulators and is owned by Moody's
investment dealers (IDs)
- small number of national-scope investment dealers
- many small "boutique" investment dealers
- multiple departments within an investment dealer
2 types of brokers
1) full service 2) discount
full service brokers
offer "high-touch" services and advice for high fees
discount brokers
offer limited services, such as stock and bond trade execution, but no advice, for low
fees
leverage
- financial services industry is highly leveraged
- short term borrowings finance long-term investments (borrow short, lend long)
risks with "borrow short, lend long" strategy are due to...
fluctuating interest rates
how did technological changes, especially the evolution of telecommunications
change the financial industry?
