Registrant Prep · Practice CIRE Element 4 free, no card
CIRE Element 4
~12% of marks · Updated May 2026
4
The Canadian Capital Markets
The structure of Canadian securities markets, TSX, TSXV, Cboe, Nasdaq Canada, ATSs, and how order handling, best execution, and the Order Protection Rule work in a fragmented marketplace. T+1 settlement is fully phased in.
Rules tested:UMIRNI 23-101CIRO Rule 3800NI 31-103
Marketplace structure
1- Lit markets: TSX, TSXV, Cboe Canada, Nasdaq Canada.
- Alternative trading systems (ATSs) and dark pools handle institutional and large orders.
- Inter-listed securities trade simultaneously across multiple marketplaces.
- Marketplace fragmentation = best execution responsibility on the dealer.
Best execution and Order Protection Rule
2- Best execution = most advantageous terms reasonably available under the circumstances.
- Factors: price, speed, certainty of execution, total transaction cost.
- OPR (NI 23-101 Part 6): trade-through prohibited, execution must occur at the best displayed price.
- Smart Order Routing (SOR) systems navigate marketplace fragmentation automatically.
Order types and handling
3- Market order: execution at best available price, no price guarantee.
- Limit order: price guarantee, no execution guarantee.
- Day order: expires at end of trading day.
- GTC: expires after 90 calendar days on TSX unless cancelled.
- Stop loss / stop buy: triggers a market order on a price level.
- Special handling: PRO orders subject to lower priority than client orders at the same price.
Clearing, settlement, and CDS
4- CDS Clearing and Depository Services Inc. handles Canadian equity clearing.
- T+1 settlement standard for equities, bonds, and most securities post-2024.
- Government of Canada T-bills settle SAME DAY.
- Failed trades incur buy-in or sell-out remediation.
- Continuous Net Settlement (CNS) nets buys and sells daily for member dealers.
Listing requirements
5- TSX vs TSXV: TSX = larger, more liquid; TSXV = junior/growth.
- Minimum market value, public float, and operating history thresholds vary by tier.
- Capital Pool Companies (CPC) on TSXV raise $200K to $9.5M; qualifying transaction deadline = 24 months.
- Continuous listing requirements: ongoing disclosure, minimum bid maintenance.
Short selling rules
6- Short sales MUST be declared at the time of the trade.
- Borrowed shares = security loan agreement, with dividends rebated to lender.
- Tick rule no longer applies federally, short sales can execute at any price.
- Mandatory buy-in if short position fails to deliver.
Exam traps
- Trap:Forgetting that T-bills still settle SAME DAY post-T+1 transition.Fix:Government of Canada T-bills are same-day. T+1 applies to everything else.
- Trap:Treating market orders as guaranteed execution at the displayed price.Fix:Market orders guarantee execution, not price. Limit orders are the reverse.
- Trap:Missing the OPR trade-through prohibition.Fix:Execution must occur at the best displayed price across all visible marketplaces.
Memory hooks, Element 4
- →T+1 = most securities · Same-day = T-bills
- →OPR = trade-through prohibited
- →GTC TSX = 90 calendar days
- →Day order = end of trading day
- →Short sales MUST be declared
- →CPC IPO range = $200K to $9.5M
- →CPC qualifying transaction = 24 months