Retail Securities 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

   Know-Your-Client (KYC) & suitability

   24%

   A Registered Representative’s relationship with their client is a fundamental part of the Retail Securities exam. Element 1 tests an in-depth understanding of the processes around KYC, product due diligence and suitability.

   • 1.1key aspects of the firm–client relationship.
   • 1.10the key features, advantages and disadvantages of various types of accounts to meet client requirements.
   • 1.11account-related documentation in relation to the account opening process and the amount and type of information collected.
   • 1.12the objective and content of the Relationship Disclosure document.
   • 1.13the importance of containment of confidential information.
   • 1.14the purpose of the required documents in the Investment Dealer’s Welcome Package.
   • + 21 more outcomes

   27 outcomes · 376 practice Q

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2. Element 2

   Fixed income

   9%

   Element 2 requires the candidate to understand the features of fixed-income securities issued by governments, corporations and other bodies. Candidates will need to apply this knowledge to specific situations to show how these features provide different risks and potential rewards to the holders and issuers of these securities.

   • 2.1regulatory requirements for debt markets.
   • 2.2types and features of fixed-income products.
   • 2.3terminology of fixed-income products to specific situations.
   • 2.4characteristics of fixed-income products.
   • 2.5the characteristics of the following instruments and the conditions that affect the risk–return profile.
   • 2.6standard calculations to bond yields.
   • + 3 more outcomes

   9 outcomes · 157 practice Q

3. Element 3

   Equities

   11%

   Element 3 requires the candidate to understand the features of equity securities issued by corporations. Candidates will need to apply this knowledge to specific situations to show how these features provide different risks and potential rewards to the holders and issuers of these securities.

   • 3.1the requirement for and purpose of a prospectus under National Instrument 41–101 General Prospectus Requirements and when this requirement may not apply under National Instrument 45–106 Prospectus Exemptions.
   • 3.10time value of money to investment calculations.
   • 3.2the types and key features of different classes of common shares.
   • 3.3the types and key features of Canadian depositary receipts (CDRs).
   • 3.4the characteristics of investing into different classes of common shares and depositary receipts.
   • 3.5features of common share ownership.
   • + 4 more outcomes

   10 outcomes · 179 practice Q

4. Element 4

   Securities analysis

   12%

   Element 4 goes into detail on the information that is available about companies and the economy and how this information can be used to assess the value of an investment. Candidates may be required to calculate various accounting ratios and interpret the results.

   • 4.1the factors involved in performing company analysis to determine whether a company represents a good investment.
   • 4.10the use of indices when:
   • 4.11methods of assessing stock market behaviour.
   • 4.12how industries can be classified into sectors and how these classifications are interpreted in a company’s stock valuation. Consider
   • 4.13macroeconomic factors to investor expectations of the price of securities and market movements.
   • 4.14other factors that impact performance expectations over various time horizons.
   • + 8 more outcomes

   14 outcomes · 239 practice Q

5. Element 5

   Managed products and other investments

   14%

   Candidates will be required to show an understanding of managed products and analyze how they compare to direct investments. General fund management approaches will be tested alongside the information that needs to be provided to investors. Questions will expect candidates to differentiate between the various types of managed products, from mutual funds to private equity funds and analyze the relative advantages and disadvantages of these products.

   • 5.1the types of managed products.
   • 5.10the impact of costs on the performance of managed products.
   • 5.11the implications of redemptions.
   • 5.12the factors to consider when deciding between managed products or non-managed products.
   • 5.13the types of alternative strategy funds and alternative assets.
   • 5.14the characteristics of alternative strategy funds and other types of investments.
   • + 8 more outcomes

   14 outcomes · 242 practice Q

6. Element 6

   Portfolio construction

   12%

   Element 6 requires the candidate to consider the impact of this information on the decisions to make when constructing a portfolio. Candidates may be required to apply and analyze the capital asset pricing model to evaluate the expected return of a security.

   • 6.1the process of asset allocation decisions.
   • 6.10active portfolio management techniques for equity managers.
   • 6.11passive portfolio management techniques for equity managers.
   • 6.12passive fixed-income portfolio management and active fixed- income portfolio management techniques.
   • 6.2the different types of risk.
   • 6.3what different measures of risk indicate about an asset or portfolio.
   • + 6 more outcomes

   12 outcomes · 139 practice Q

7. Element 7

   Investment recommendations

   12%

   Element 7 requires candidates to use the knowledge and understanding of the syllabus so far and apply this to a variety of specific situations. Candidates should expect to be presented with various clients with different objectives and needs and be able to respond to their needs in the correct manner. Candidates may also be required to make tax calculations.

   • 7.1the relationship between a client’s investment objectives and needs, risk profile and performance.
   • 7.10the basics of the Canadian capital gains tax system to a client’s investment gains.
   • 7.11the basics of the Canadian income tax system to income from a client’s investments.
   • 7.12to specific situations the regulatory requirements governing complaints handling.
   • 7.2the impact of a client placing non-financial constraints and restrictions on their own investment choices.
   • 7.3principles of behavioural finance and the potential impact on a client’s decisions and returns. Consider the following behavioural biases:
   • + 6 more outcomes

   12 outcomes · 134 practice Q

8. Element 8

   Execution and market integrity

   6%

   In Element 8, candidates are expected to analyze the requirements under the Universal Market Integrity Rules (UMIR) regarding the recognition of abusive trading and the gatekeeping responsibilities of Investment Dealers and their representatives. An application of the types of orders that can be placed and the process of execution, will also be tested in the exam.

   • 8.1to specific situations an understanding of the UMIR covering:
   • 8.2to specific situations the regulatory requirements in relation to the UMIR gatekeeping responsibilities.
   • 8.3the features of different types of orders to specific client requirements.
   • 8.4various important aspects of the trade execution and settlement process to specific client requirements.
   • 8.5the use of long and short margin accounts, including:
   • 8.6reporting requirements to clients.

   6 outcomes · 85 practice Q

9. Element 9

   Monitoring, reporting and maintaining client relationships

   Monitoring the client’s portfolio is an important part of the relationship between clients and the Investment Dealer. This element requires candidates to apply requirements around the monitoring and reporting of portfolio performance to specific scenarios. Candidates should also apply and analyze the requirements on Investment Dealers when recording and communicating information.

   • 9.1to specific situations the process of monitoring and evaluating portfolio performance.
   • 9.2to specific situations the process of investment performance disclosure and measurement.
   • 9.3investment performance calculations to individual securities or portfolios over any timeframe.
   • 9.4to specific situations the CIRO requirements when Investment Dealers communicate with clients and/or the public.
   • 9.5to specific situations the requirements to maintain all client responses/records in respect of:

   5 outcomes · 61 practice Q