Chief Compliance Officer Exam

Blueprint

Element-by-element breakdown

Parsed directly from the official CIRO syllabus. Every learning outcome maps to a specific element and weighted question count.

1. Element 1

   Free

   General regulatory framework

   7%

   In Element 1, the candidate is expected to show an understanding of the key regulators in the Canadian investment industry, including the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO). Element 1 also covers the key legislation that governs and impacts the investment industry with detailed focus on the prevention of using the investment industry for money laundering and other criminal activities.

   • 1.1the role and authority of the CSA and provincial/territorial securities and derivatives regulators.
   • 1.2the role and authority of CIRO.
   • 1.3the role and authority of exchanges and other marketplaces.
   • 1.4the role of the Canadian Investor Protection Fund (CIPF).
   • 1.5the function and purpose of other financial regulators and agencies.
   • 1.6the purpose of the following federal statutes:
   • + 1 more outcomes

   7 outcomes · 136 practice Q

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2. Element 2

   Compliance function and operations

   8%

   Element 2 introduces us to the compliance function and the oversight by the Chief Compliance Officer (CCO). The candidate will need to understand the position of compliance within the Investment Dealer and the authority of the CCO. The candidate will also need to apply compliance practices to specific situations.

   • 2.1the requirement for an Investment Dealer to designate an appropriate CCO.
   • 2.2the responsibilities under different CCO models, including:
   • 2.3to specific situations the authority and responsibility of the CCO to oversee effectiveness and consistency of business units’ compliance practices.
   • 2.4to specific situations how the compliance department interacts with other functions in the Investment Dealer, including:
   • 2.5how the CCO needs to interact with external stakeholders, including:
   • 2.6how different factors at the Investment Dealer will influence compliance program design, including:
   • + 1 more outcomes

   7 outcomes · 134 practice Q

3. Element 3

   Investment Dealer business model and related areas

   Element 3 covers the Investment Dealer in detail and the role of the Directors and Executives in recognizing and analyzing the risk, opportunities and requirements that the Investment Dealer’s activities create. Specific focus is applied to the Investment Dealer’s business model, the services they provide, the client types they deal with, the accounts and investments that they offer and the compensation structures they create for their representatives.

   • 3.1the risks, opportunities and requirements associated with each of the following client types:
   • 3.10the requirements for development, evaluation and delivery of products and services.
   • 3.11the product due diligence requirements and exemptions.
   • 3.12the requirements for product due diligence policies and procedures, which reflect:
   • 3.2the risks, opportunities and requirements associated with each of the following business models:
   • 3.3the risks, opportunities and requirements associated with each of the following services:
   • + 6 more outcomes

   12 outcomes · 240 practice Q

4. Element 4

   Offering and distribution of securities

   5%

   Element 4 requires the candidate to understand the responsibilities that apply to a public company, including the offering of securities to the public and the requirement for sufficient information through the prospectus. The candidate will be tested on analyzing the relevant information required and the situations where a prospectus is not needed, as well as the role of the Investment Dealer when underwriting offers.

   • 4.1the requirements under National Instrument 41-101 General Prospectus Requirements, National Instrument 44-101 Short Form Prospectus Distributions and the role of provincial and territorial securities legislation relating to the offering and distribution of securities.
   • 4.2where information and filing relating to securities issuance can rely on selective disclosure.
   • 4.3the commonly used exemptions for prospectus requirements under National instrument 45-106 Prospectus Exemptions.
   • 4.4the information and protections available to the investor in relation to the issuance of securities.
   • 4.5the rights and obligations of the Investment Dealer when underwriting securities issuers.
   • 4.6the requirements for public company relating to continuous disclosures.
   • + 2 more outcomes

   8 outcomes · 135 practice Q

5. Element 5

   Corporate governance and ethics

   11%

   Element 5 requires the candidate to be able to identify, analyze and draw conclusions from internal behavioural factors that pose a risk to the Investment Dealer. It begins by covering the role of corporate governance from the role and the composition of the board to the relationship with company stakeholders.

   • 5.1the components of effective corporate governance.
   • 5.10the requirements for the containment of confidential and material non-public information policies and procedures.
   • 5.2the impact of a company setting its own corporate bylaws.
   • 5.3the relevance and impact of environmental, social and governance (ESG) considerations
   • 5.4situations for Directors and Executives that involve the role of ethics and integrity in the securities industry.
   • 5.5situations for Directors and Executives that involve the role of ethics and integrity in corporate governance.
   • + 4 more outcomes

   10 outcomes · 159 practice Q

6. Element 6

   Duties, liabilities and defences

   7%

   This element requires the candidate to analyze the duties of Directors, the liabilities that they could face and the defences owed to them. Questions will challenge the candidate to interpret information and draw appropriate conclusions to a range of situations. The questions will also draw on the difference in responsibilities in these areas between the role of Director and the roles of Executives.

   • 6.1factors relating to strategic company objectives and positions.
   • 6.2situations and obligations relating to a Director or Executive’s duties.
   • 6.3situations relating to legal obligations as corporate Directors or Executives as fiduciary.
   • 6.4situations and potential legal liabilities that may arise from:
   • 6.5securities-related criminal penalties.
   • 6.6limitation of liability (e.g. indemnity). Defences: Directors
   • + 1 more outcomes

   7 outcomes · 123 practice Q

7. Element 7

   Risk management and internal controls

   11%

   Element 7 covers the objectives of risk management and internal controls as well as the regulatory requirements on these. The candidate will need to identify, analyze and determine methods to manage risks as well as evaluate the effectiveness of policies and procedures used. Element 7 is another element where questions will draw on the difference in responsibilities in these areas between the role of Director and the roles of Executives.

   • 7.1the definition and objectives of risk management
   • 7.10risk identification, measurement, monitoring, control and reporting considerations.
   • 7.11the effectiveness of risk management tools.
   • 7.12the requirements relating to credit risk management policies and procedures.
   • 7.2risk management in a principles-based regulatory environment
   • 7.3the regulatory expectations of risk management
   • + 6 more outcomes

   12 outcomes · 184 practice Q

8. Element 8

   Compliance as risk management

   12%

   This element tests the ideas discussed in Element 7 from a compliance viewpoint. The candidate will be required to understand the role of compliance in the risk management function and apply strategies to control specific risks and identify red flags that may indicate non-compliance with requirements.

   • 8.1the risk of legal/regulatory sanctions, financial loss and reputational damage, which arise from regulatory requirement violations.
   • 8.2the role of compliance as a risk management function.
   • 8.3to specific situations the controls that can be used to comply with regulatory requirements and to manage risk relating to the following:
   • 8.4red flags that compliance measures are not adequate in relation to risk management.
   • 8.5to specific situations the need to update policies and procedures when changes arise to the Investment Dealer’s business activities and/or regulatory requirements.
   • 8.6the need to notify the regulator of material changes.
   • + 3 more outcomes

   9 outcomes · 131 practice Q

9. Element 9

   Significant areas of risk

   7%

   This section requires an understanding of significant areas of risk for an Investment Dealer and analysis of how Directors and Executives should respond to these. Element 9 is another element where questions will draw on the difference in responsibilities in these areas between the role of Director and the roles of Executives.

   • 9.1the definition of significant areas of risk.
   • 9.2to specific scenarios the requirements relating to managing significant areas of risk.
   • 9.3significant areas of risk specific to the Investment Dealer and its business lines, which may include the following:
   • 9.4the impact of the significant areas of risk mentioned above on the Investment Dealer and ways to mitigate these risks.

   4 outcomes · 61 practice Q

10. Element 10

    Regulatory reporting, examinations, investigations and actions

    In Element 10, the candidate will be expected to apply behaviours required of the Chief Compliance Officer (CCO) and the compliance department to various scenarios ranging from reporting, both internally and externally, regulatory examinations and any actions required after these investigations.

    • 10.1to specific situations the regulatory reporting requirements, including:
    • 10.10the possible implication of enforcement action on:
    • 10.11to specific situations the need to ensure remediation of matters of non-compliance identified through enforcement action and the role of a Monitor.
    • 10.12the procedures for opportunities to be heard before decisions on approval and regulatory compliance matters.
    • 10.2to specific situations the requirement to give timely responses to market-related inquiries and the consequences of not doing so.
    • 10.3the process of compliance examinations, including:
    • + 6 more outcomes

    12 outcomes · 173 practice Q

11. Element 11

    Compliance responsibilities

    15%

    Element 11 requires a candidate to understand the responsibilities of the compliance department and the wide range of policies and procedures within an Investment Dealer and analyze their effectiveness. The candidate will also be required to apply regulatory requirements to decisions in specific situations, such as handling complaints and suitability determinations.

    • 11.1the requirement to establish and maintain policies and procedures, where applicable, for assessing compliance by the Investment Dealer and individuals acting on its behalf in relation to:
    • 11.10the internal investigation requirements.
    • 11.11to specific situations the client complaint requirements.
    • 11.12the role and responsibilities of the designated complaints officer (DCO)
    • 11.13to specific situations the options available to a client if they are not satisfied with the Investment Dealer’s response.
    • 11.14in specific situations the requirements for know-your-product (KYP).
    • + 12 more outcomes

    18 outcomes · 185 practice Q

12. Element 12

    Chief Compliance Officer (CCO) responsibilities

    11%

    In Element 12 the candidate is required to specifically address the role of the CCO in the Investment Dealer and analyze the procedures for identifying non-compliance, the communication of these procedures and the assessment of potential compliance risks. The candidate will be required to apply their knowledge to a range of scenarios.

    • 12.1situations where the CCO has the responsibility to:
    • 12.10the appropriate actions of a CCO to specific red flags that indicate compliance measures are not adequate in the reporting obligation.
    • 12.2the need for policies and procedures for identifying areas of non-compliance with securities and derivatives laws and regulations which:
    • 12.3red flags and areas of non-compliance to specific situations that would require CCO action.
    • 12.4the requirement to notify the regulators about Investment Dealer misconduct and all related actions including remedial measures.
    • 12.5to specific situations relevant to the CCO requirements relating to the Investment Dealer’s communications.
    • + 4 more outcomes

    10 outcomes · 105 practice Q

13. Element 13

    Ultimate Designated Person (UDP) responsibility

    5%

    Element 13 covers the oversight responsibilities that fall on the Ultimate Designated Person (UDP). This section will test the candidate’s ability to analyze specific situations in respect of the UDP’s responsibilities, including their role in the monitoring and supervision of the organization as a whole.

    • 13.1situations relevant to an Investment Dealer that highlight the specific UDP responsibilities:
    • 13.2situations that highlight the UDP monitoring and supervision responsibilities, including:
    • 13.3the role of the UDP in overseeing Executives (including CCO and CFO) in managing significant areas of risk, including:
    • 13.4to specific situations the impact of and risks associated with early warning rules, including:
    • 13.5the requirement for the UDP to ensure that issues raised by examination reports are responded to and addressed.
    • 13.6the purpose of annual risk questionnaires and risk trend reports:

    6 outcomes · 65 practice Q