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CIRO CIRE Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Market integrity, trade execution and settlement | 12% | - Order entry, trade management, settlement and delivery - Universal Market Integrity Rules - Margin requirements - UMIR gatekeeping obligations - Gatekeeping requirements for manipulative and deceptive practices, unacceptable activities and front running - Specialized trading agreements for derivative accounts - Features of different order types - Order confirmation requirements - Order variations, cancellations and corrections - Functions of investment banking, research and corporate finance - Reporting obligations to firms and regulators - Features of different account types |
| Prospective client relationships | 10% | - Retail client information collection - Exemptions under National Instrument 45-106 - Impact of fees, turnover and taxes on investment returns - Institutional client qualification requirements - Client relationship model - Client record documentation, filing and maintenance - Required account agreement and Firm Welcome package documents - Differences between retail and institutional clients - Investment Dealer onboarding process - Role of cost in product selection - Third parties and other professionals in the client's life |
| Client complaint handling and reporting | 5% | - Policies and procedures for reporting, handling and maintaining complaint records - Recourse available to dissatisfied clients - Role of CIRO and provincial regulators in the complaints handling framework - Potential client issues, liability and consequences - Prohibited practices in client settlement agreements - Investment Dealer obligations to clients - Investment Dealer complaint reporting obligations and penalties |
| Derivatives | 5% | - Listed versus over-the-counter derivative markets - Single and multi-legged derivative trading strategies - Features of other derivative contract types - Administrative requirements for derivative trading with clients - Prohibited derivative trading practices - Basic transactional elements of futures and options - Basic uses of derivatives - Features of options contract types |
| Overview of Canadian securities regulatory framework | 10% | - Anti-money laundering and anti-terrorist financing legislation and regulations - Other applicable laws including confidentiality, privacy, anti-spam, company disclosure and shareholder rights - Function and purpose of clearing agencies - Criminal Code and its application to financial crime - Investment Dealer registration and individual approval requirements - Purpose and implications of the Bank Act and Bankruptcy and Insolvency Act - Role and authority of the Canadian Securities Administrators and provincial and territorial securities and derivatives regulators - Function and purpose of other investment industry regulators and agencies - Role and authority of the Canadian Investment Regulatory Organization - Function and purpose of the Canadian Investor Protection Fund - Function and purpose of investment industry marketplaces |
| Market and company analysis | 8% | - Factors influencing the macroeconomy - Industry performance analysis - Economic indicators and sources of information - Company performance analysis tools - Rules relating to companies - Effects of macroeconomic factors on financial markets - Technical and statistical analysis tools and information sources - Basic market theories and stock market behaviour - Basic economic theories |
| Securities, managed products, mutual funds and other investments | 19% | - Considerations affecting mutual fund investors - Considerations affecting equity investors and potential shareholders - Types of pooled products - Considerations affecting managed product investors - Purpose and uses of market indices - Features, risks and returns of managed products - Types, features, risks and returns of equities - Other investments including hedge funds, structured products, alternative investment funds, crypto assets and ESG-related products - Considerations affecting fixed income investors - Asset classes generally sold and traded at an Investment Dealer - Considerations affecting exchange-traded fund investors - Types, features, risks and returns of fixed income securities and products |
| Conflicts of interest and ethics | 15% | - Ethical and legal responsibilities to clients - Role of cybersecurity in protecting confidential information - Importance of managing conflicts of interest - Inappropriate or prohibited personal financial dealings with clients - CIRO and other ethical standards of conduct - Conflicts of interest management process - Activities outside an Investment Dealer - Ethical principles and standards of conduct for Approved Persons and Investment Dealers - Requirements regarding positions of influence - Importance of ethics and its relationship to rules - Information controls, barriers, firewalls and restricted lists - Client confidentiality policies and procedures |
| Scope of client relationships | 15% | - Internal escalation procedures and subject matter experts - Typical services provided by retail Investment Dealers - Product due diligence obligations - Typical services provided by institutional Investment Dealers - Role of the Registered Representative in providing client service - Purpose and content of relationship disclosure - Know-your-product obligations - Account appropriateness obligations - Requirements for working with clients in the United States and other foreign jurisdictions - Exemptions from suitability determination requirements - Suitability determination requirements for retail clients - Investment performance benchmarks - Trust, agency and fiduciary duty - Account appropriateness versus suitability determination - Systematic approaches to investment management and investment strategies - Role of the Investment Representative in providing client service - Institutional client sophistication assessment and suitability exemptions |
CIRO Canadian Investment Regulatory Sample Questions:
Question 1
What is the primary function of investment banking within the financial markets?
A. Monitoring ongoing compliance of market participants with regulatory rules
B. Conducting day-to-day securities trades for retail and institutional clients
C. Managing the personal investment portfolios for high-net-worth clients
D. Assisting companies raise capital, facilitating mergers and acquisitions
Question 2
Which of the following scenarios best illustrates the use of derivatives for risk management through hedging?
A. A hedge fund uses leverage in derivatives to amplify potential returns in its portfolio
B. An investor buys call options on a stock, anticipating its price will rise in the near future
C. A company purchases a forward contract to lock in a fixed exchange rate for a future international transaction
D. A trader enters into a speculative futures contract to capitalize on anticipated price movements in crude oil
Question 3
What must an Approved Person understand about securities to comply with know-your-product (KYP) obligations?
A. The securities' structure, features, and risks
B. The market demand and media coverage
C. The securities' intended use by the client
D. Alternative securities that may be suitable
Question 4
Which of the following statements best describes the benefit of holding a cumulative preferred share?
A. It allows unpaid dividends to accumulate and be paid with priority
B. It accumulates voting rights regardless of dividend payment status
C. It allows companies to accumulate redemption rights over a set time
D. It accumulates interest on missed dividends until they are paid
Question 5
In relation to suitability which of the following is true?
A. There can only be one suitable recommendation that puts the client's interest first
B. There can only be one suitable recommendation balancing client and dealer interests
C. There may be multiple recommendations that prioritize both client and dealer interests
D. There may be multiple suitable recommendations that put the client's interest first
Solutions:
| Question 1 Answer: D | Question 2 Answer: C | Question 3 Answer: A | Question 4 Answer: A | Question 5 Answer: D |
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