Canadian Investment Regulatory 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

   Overview of Canadian securities regulatory framework

   14%

   This element requires candidates to be able to identify, describe and explain the purpose of the main investment industry regulators in Canada, as well as list and define other regulators and agencies, and the markets they oversee. Candidates are required to understand and explain the legislation and controls around anti-money laundering and be able to recall the features of other legislation including confidentiality and privacy.

   • 1.1the role and authority of the Canadian Securities Administrators (CSA) and provincial/territorial securities and derivatives regulators.
   • 1.10the purpose and implications of the Proceeds of Crime (Money Laundering) and Terrorism Financing Act (PCMLTFA) and Regulations (PCMLTF Regulations).
   • 1.11the purpose and implications of other applicable laws, including:
   • 1.2the role and authority of the Canadian Investment Regulatory Organization (CIRO).
   • 1.3the requirement for Investment Dealer registration and individual approval requirements, and the role of CSA and CIRO in this process.
   • 1.4the function and purpose of marketplaces in the investment industry.
   • + 5 more outcomes

2. Element 2

   Prospective client relationships

   14%

   This element requires candidates to display a sound understanding of the client relationship model including relationship disclosure, conflicts of interest management, suitability assessment and account performance reporting. Candidates must be able to differentiate retail clients from institutional clients and also be able to list the various documentation required in the process of onboarding clients.

   • 2.1the client relationship model.
   • 2.10the required documents in the account agreement and Firm Welcome package.
   • 2.11the requirements for documenting, filing and maintaining client records.
   • 2.2the CIRO rules and requirements for clients to qualify as an institutional client:
   • 2.3the difference between a retail client and an institutional client.
   • 2.4who is exempt under National Instrument 45-106.
   • + 5 more outcomes

3. Element 3

   Scope of client relationships

   22%

   This element looks in detail at the relationship between the Investment Dealer’s representative and the client, with specific focus on the different roles of an Investment Representative and a Registered Representative. The element expects a candidate to be able to identify, describe and explain account appropriateness, product due diligence and know-your-product requirements as well as display an awareness of know-your-client (KYC) requirements and suitability determination. Candidates should also be able to explain the concepts of trust, agency, and fiduciary duty, and the purpose of relationship disclosure.

   • 3.1the role of the Registered Representative in providing client service.
   • 3.10the difference between account appropriateness and account suitability determination.
   • 3.11the applicability of client suitability determination requirements for retail clients.
   • 3.12the applicability of assessment of an institutional client’s sophistication level and applicability of suitability exemptions.
   • 3.13the exemptions from suitability determination requirements.
   • 3.14why internal escalation procedures to subject matter experts may be required.
   • + 11 more outcomes

4. Element 4

   Client complaint handling and reporting

   8%

   In this element candidates are expected to be able to identify, describe and explain the requirements for client complaints handling. It requires comprehension of Investment Dealers’ professional, regulatory and legal obligations regarding complaints. This includes potential client issues, reporting and recordkeeping requirements, and recourse options for dissatisfied clients.

   • 4.1the role of the CIRO, and provincial regulators in the complaints handling framework.
   • 4.2the recourse available to a dissatisfied client, including OBSI, litigation and CIRO’s arbitration program.
   • 4.3potential issues with clients that could lead to liability and the potential consequences.
   • 4.4the Investment Dealer’s obligations to report complaints and the penalties for failure to report.
   • 4.5the Investment Dealer’s obligations to clients, including legislative, contractual and other applicable laws (organizational).
   • 4.6the regulatory requirement for Investment Dealer policies and procedures on reporting, dealing with and maintaining records of client complaints for retail and institutional clients.
   • + 1 more outcomes

5. Element 5

   Market and company analysis

   12%

   This element provides an overview of economic and corporate factors that can affect the valuations of financial assets and investor return. Candidates are expected to list and define basic macroeconomic theories, and how factors such as central banks and fiscal policy affect financial markets. Candidates are also expected to identify sources of information and ways of using information to provide meaningful insight.

   • 5.1the basic economic theories.
   • 5.2the factors that influence the macroeconomy.
   • 5.3sources of information and economic indicators used to analyze:
   • 5.4the basics of how macroeconomic factors affect the financial markets.
   • 5.5how to analyze industry performance.
   • 5.6the tools used to analyze company performance and what they show.
   • + 3 more outcomes

6. Element 6

   Market integrity, trade execution and settlement

   This element requires a detailed understanding of key requirements under the Universal Market Integrity Rules, including the application of gatekeeping obligations to market scenarios. Candidates should also be able to recall the processes for entering specific order types, settlement, and delivery.

   • 6.1the Universal Market Integrity Rules (UMIR) covering:
   • 6.10the margin requirements.
   • 6.11the need for a specialized trading agreement with the client for derivative accounts.
   • 6.12applicable reporting obligations to firms and regulators.
   • 6.2UMIR gatekeeping obligations.
   • 6.3the regulatory requirements applicable to gatekeeping in relation to manipulative and deceptive practices, specific unacceptable activities and front running.
   • + 6 more outcomes

7. Element 7

   Securities, managed products, mutual funds and

   This element requires a candidate to be able to identify, describe and explain the types, features, risks, and returns of securities and managed products, such as mutual funds. Candidates must demonstrate an understanding of the main considerations affecting current or potential investors in these products and instruments.

   • 7.1the types of asset classes generally sold by and traded at an Investment Dealer.
   • 7.10the main considerations affecting an investor, or potential investor in mutual funds.
   • 7.11the main considerations affecting an investor, or potential investor in exchange-traded funds (ETFs).
   • 7.12the types, features, risks, returns, advantages, disadvantages, costs, and product disclosure requirements of the following other investments:
   • 7.2the types and features, and risks and returns of equities.
   • 7.3the main consideration affecting a shareholder or potential shareholder.
   • + 6 more outcomes

8. Element 8

   Derivatives

   8%

   This element provides an overview of derivatives. It requires candidates to state and define the features and uses of options, futures, and other derivatives. Candidates must also be able to define some basic derivative trading strategies and be aware of administrative requirements and prohibited trading practices.

   • 8.1the main features of options contract types.
   • 8.2the main features of other types of derivative contract types.
   • 8.3the basic uses of derivatives.
   • 8.4the basic transactional elements of futures and options.
   • 8.5differences between listed and over-the-counter derivative markets.
   • 8.6the single and multi-legged strategies for trading futures, options and similar derivative contracts:
   • + 2 more outcomes

9. Element 9

   Conflicts of interest and ethics

   21%

   This element requires a detailed understanding of identifying and managing conflicts of interest and the role of ethics in the investment industry, together with the ethical and legal responsibilities of Investment Dealers and their representatives to clients. Candidates will analyze ethical dilemmas, apply independent judgment and critical thinking skills to provide considered responses on the course of action to take. The section also highlights the importance of information security.

   • 9.1the importance of an Investment Dealer managing conflicts of interest.
   • 9.10the requirements for Investment Dealers to have policies and procedures for maintaining client confidentiality.
   • 9.11the purpose and methods of controlling information.
   • 9.12the role of cybersecurity in the containment of confidential information.
   • 9.2the process of conflicts of interest management.
   • 9.3an Investment Dealer’s ethical and legal responsibilities to clients.
   • + 6 more outcomes