Reference
CIRO and CIRE Glossary
Plain-English definitions of every term that shows up on the CIRE exam and in CIRO/IDPC rulebook references. Every entry cites the actual rule, instrument, or notice it traces back to. Tap any term for the full definition and a one-click AI case study showing how it applies in practice.
Regulatory
- Alberta Securities Commission (ASC)Alberta's provincial securities regulator, a CSA member administering the Alberta Securities Act.
- Autorité des marchés financiers (AMF)Quebec's integrated financial-sector regulator covering securities, insurance, and deposit institutions.
- British Columbia Securities Commission (BCSC)British Columbia's provincial securities regulator, a CSA member administering the BC Securities Act.
- Canadian Investor Protection Fund (CIPF)Investor protection fund covering client assets at CIRO investment dealers up to $1 million per account category.
- CIRECanadian Investment Regulatory Examination, the entry-level CIRO exam.
- CIROThe Canadian Investment Regulatory Organization, formed January 1, 2023.
- Common Reporting Standard (CRS)OECD framework Canada uses to exchange financial account information with non-U.S. foreign tax authorities through CRA.
- CSA (Canadian Securities Administrators)Umbrella organisation of Canada's 13 provincial/territorial securities regulators.
- CSA National Instrument (NI)A harmonized rule developed by the CSA and adopted by each CSA member jurisdiction to give it local legal force.
- Exempt MarketSecurities distributed without a prospectus, relying on exemptions in NI 45-106 such as accredited investor or $150,000 minimum amount.
- Exempt Market Dealer (EMD)A CSA-registered dealer category under NI 31-103 that distributes securities under prospectus exemption. Not regulated by CIRO.
- FATCAU.S. Foreign Account Tax Compliance Act requiring Canadian dealers to identify and report U.S.-person accounts to CRA.
- FATFFinancial Action Task Force, the international body that sets AML and counter-terrorist-financing standards.
- IDPC Rule 3200 SeriesAccount opening and KYC obligations under the CIRO IDPC framework.
- IDPC Rule 3300 SeriesSupervision obligations for registered persons under CIRO.
- IDPC Rule 3700 SeriesBranch and sub-branch operations and complaint-handling requirements.
- IDPC RulesCIRO Investment Dealer and Partially Consolidated Rules, the core rulebook for investment dealers.
- IIROC (legacy)The Investment Industry Regulatory Organization of Canada - predecessor to CIRO.
- Investment Representative (IR)A non-advice CIRO registration limited to executing client-directed trades.
- MFDA (legacy)The Mutual Fund Dealers Association of Canada - predecessor to CIRO.
- MFDA Legacy RulesThe Mutual Fund Dealers Association rulebook, now consolidated under CIRO after the January 2023 merger.
- NI 21-101 (Marketplace Operation)The CSA rule governing the operation of recognized exchanges and ATSs in Canada.
- NI 23-101 (Trading Rules)The CSA trading rules covering best execution, order protection, and trade-through prohibitions on Canadian marketplaces.
- NI 23-103 (Electronic Trading)The CSA rule governing automated order systems, direct electronic access, and pre-trade risk controls at Canadian dealers.
- NI 31-103National Instrument on Registration Requirements, Exemptions and Ongoing Registrant Obligations.
- NI 31-103 Section 13.2 (KYC Content)The NI 31-103 provision prescribing the specific client information a registrant must collect as part of Know Your Client.
- NI 31-103 Section 13.3 (Referral Arrangements)The NI 31-103 provision requiring written disclosure to clients of any referral fee paid or received in connection with a client referral.
- NI 31-103 Section 13.5 (Prohibition on Personal Financial Dealings)The NI 31-103 provision prohibiting registrants from engaging in personal financial dealings with clients that could exploit or harm the client.
- NI 81-102National Instrument governing investment fund operations, including mutual funds and ETFs.
- NI 81-105National Instrument restricting sales commissions, soft-dollar arrangements, and incentives in the mutual fund industry.
- NRD (National Registration Database)The CSA's electronic system for registrant filings across all provinces.
- Ontario Securities ActThe provincial statute administered by the OSC that is the primary source of securities law in Ontario.
- Ontario Securities Commission (OSC)Ontario's provincial securities regulator and the largest CSA member by market participants.
- Outside Business Activity (OBA)Any activity a registrant performs outside their sponsoring dealer that must be disclosed and approved.
- Personal Financial Dealing (PFD)Prohibited or restricted financial transactions between a registrant and their clients.
- Registered Representative (RR)An individual licensed by CIRO to advise on and trade securities for retail clients.
KYC and Suitability
- Account AppropriatenessThe pre-suitability check on whether the client should open the account at all.
- Know Your Client (KYC)The mandatory client-information collection rule under CIRO IDPC Rule 3402.
- Know Your Product (KYP)The firm-and-individual obligation to understand every product the dealer offers.
- Know-Your-Product (Firm Level)The dealer's obligation to conduct product due diligence before placing a security on its approved shelf.
- Know-Your-Product (Rep Level)The registrant's personal obligation to understand any product they recommend to a client.
- Risk CapacityA client's objective financial ability to absorb investment losses without material harm.
- Risk ToleranceA client's subjective willingness to accept investment volatility and potential loss.
- Suitability DeterminationThe account-level obligation to recommend only suitable investment actions.
- Trusted Contact Person (TCP)A non-trading contact a client designates so the dealer can address concerns about exploitation or capacity.
Compliance
- 90-Day Complaint HandlingThe CIRO rule requiring dealers to deliver a substantive response to a client complaint within 90 days.
- Anti-Money Laundering (AML)The statutory regime under PCMLTFA imposing record-keeping, reporting, and client-identification obligations on dealers.
- Chief Compliance Officer (CCO)The senior officer with primary regulatory accountability for the dealer's compliance program under CIRO IDPC Rule 3300.
- CIPF Coverage LimitProtection of up to $1 million per separate account category in the event of a CIRO investment dealer insolvency.
- Client Focused Reforms (CFR)The 2021 CSA reforms that rewrote suitability, KYC, and conflicts of interest.
- Conflict of InterestA situation where a registrant's or dealer's interests - or those of a related party - could interfere with their obligation to act in the client's best interest.
- Dealer Member Rules (DMR)The legacy IIROC rulebook for investment dealers, substantially consolidated into the CIRO IDPC Rules effective January 1, 2023.
- EFT Report (Electronic Funds Transfer Report)Mandatory FINTRAC report for international wire transfers of $10,000 CAD or more in a single transaction.
- Enhanced Due Diligence (EDD)Heightened verification and ongoing monitoring required for high-risk clients, including PEPs and complex account structures.
- FINTRACCanada's federal anti-money-laundering and anti-terrorist-financing agency.
- Front-RunningTrading ahead of a known pending client order to profit from the price move it will cause.
- Gatekeeper ObligationThe duty of a registrant to identify and report suspicious or clearly improper activity rather than simply following client instructions.
- Insider TradingTrading on material non-public information about a reporting issuer.
- Internal ControlFirm-level processes and policies that ensure registered persons comply with CIRO IDPC requirements and the dealer's own procedures.
- Large Cash Transaction Report (LCTR)Mandatory FINTRAC report for cash transactions of $10,000 CAD or more.
- OBSI (Ombudsman for Banking Services and Investments)Independent dispute-resolution body for client complaints escalated after the dealer's internal process.
- OSC Whistleblower ProgramAn OSC tip program that offers financial awards of up to $5 million for information leading to successful securities law enforcement.
- PCMLTFAProceeds of Crime (Money Laundering) and Terrorist Financing Act.
- Politically Exposed Person (PEP)A senior political or government official whose accounts require enhanced AML measures.
- Record RetentionThe general 5-year retention rule for dealer records, extended to 7 years for client identification records under PCMLTFA.
- Suspicious Transaction Report (STR)Mandatory FINTRAC report when reasonable grounds exist to suspect money laundering or terrorist financing.
- UDP (Ultimate Designated Person)The most senior officer responsible for a dealer's overall compliance with securities laws and CIRO rules.
Markets and Trading
- Alternative Trading System (ATS)A non-exchange marketplace that matches orders in listed securities.
- Alternative Trading System (ATS) - Regulatory FrameworkA marketplace that is registered as an ATS under NI 21-101 rather than recognised as a stock exchange, with lighter governance requirements.
- Best ExecutionThe obligation to take reasonable efforts to achieve the most advantageous execution for clients.
- Bid-Ask SpreadThe difference between the best posted bid price and the best posted ask price for a security at any moment.
- Board Lot vs Odd LotA board lot is the standard exchange trading unit (typically 100 shares for stocks priced at $1.00 or more); an odd lot is any quantity below one board lot.
- CDS (Canadian Depository for Securities)Canada's central securities depository that clears and settles trades.
- Circuit BreakerA regulatory mechanism that halts trading across all Canadian equity markets when a major index drops by a set percentage within the trading day.
- DelistingThe removal of a security from trading on a stock exchange, either voluntarily or involuntarily.
- Direct Market Access (DMA)An arrangement where a client routes orders directly to a marketplace through a dealer's infrastructure, without dealer intervention on each order.
- Halt ResumptionThe formal procedure under UMIR 9.1 for restarting trading in a security after a regulatory or news-pending halt.
- Imbalance NotificationA TSX signal at 3:40 PM indicating a buy or sell imbalance exceeding 25% of expected closing volume.
- InternalizationA dealer filling a client's order against its own inventory rather than routing it to an external marketplace.
- IOC, FOK, and AONImmediate-or-Cancel, Fill-or-Kill, and All-or-None are time-in-force and volume qualifiers that modify how an order is executed.
- Lit vs Dark PoolThe distinction between marketplaces that display pre-trade quotes publicly (lit) and those that do not (dark).
- LOC (Limit On Close)A limit order that executes only at the closing auction and only if the clearing price meets the limit.
- Market MakerA firm that continuously posts two-sided quotes in a security under a contractual obligation with the marketplace.
- Market-on-Open / Market-on-Close (MOO / MOC)Order types that execute at the calculated opening or closing price of a security.
- MarketplaceThe generic term under NI 21-101 for any exchange or ATS where securities are traded in Canada.
- MLOC (Market Limit On Close)An order type that participates in the TSX closing auction up to a specified limit price.
- NBBO (National Best Bid and Offer)The best posted bid and ask prices across all visible Canadian marketplaces for a given security.
- Principal-Protected Deposit (PPD)A CDIC-eligible bank deposit that guarantees return of principal at maturity and links interest to an underlying index.
- Short SellingSelling borrowed securities with the intent to repurchase them later at a lower price.
- T+1 SettlementStandard one-business-day settlement cycle for North American equity trades.
- Trading HaltA temporary suspension of trading in a specific security, typically for pending material news or a regulatory inquiry, under UMIR 9.1.
- UMIRUniversal Market Integrity Rules governing trading on Canadian marketplaces.
- UMIR 3.3 (Short Sale Locate)Pre-borrow requirement: a dealer must have reasonable grounds to believe a short-sold security can be borrowed before entering the order.
Tax and Accounts
- Adjusted Cost Base (ACB)The tax cost of a security used to calculate capital gains or losses on disposition.
- Attribution RulesITA sections 74.1 to 74.5 that attribute investment income back to the transferor when income-splitting transfers are made to a spouse or minor child.
- Canada Education Savings Grant (CESG)A federal grant of 20% on the first $2,500 of annual RESP contributions, with a lifetime maximum of $7,200 per beneficiary.
- CDIC (Canada Deposit Insurance Corporation)Federal Crown corporation that insures eligible deposits at member institutions up to $100,000.
- CDIC Coverage CategoriesThe seven separate insured deposit categories at CDIC member institutions, each covered up to $100,000.
- Dividend Gross-Up and Dividend Tax Credit (DTC)The mechanism that integrates corporate tax with personal tax on Canadian dividends by grossing up the dividend and then applying a credit.
- First Home Savings Account (FHSA)Registered account combining RRSP-style deduction with TFSA-style tax-free withdrawal for a first home purchase.
- Home Buyers' Plan (HBP)Allows a first-time home buyer to withdraw up to $60,000 from their RRSP tax-free, repayable over 15 years.
- LCGE (Lifetime Capital Gains Exemption)A cumulative exemption sheltering capital gains on qualified small business corporation shares and qualified farm or fishing property.
- Lifelong Learning Plan (LLP)Allows an RRSP holder to withdraw up to $10,000 per year (maximum $20,000 total) for full-time education or training, repayable over 10 years.
- NR4 SlipThe CRA information slip used to report income paid to a non-resident of Canada that was subject to Canadian withholding tax.
- RDSP Grant and BondThe Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) that provide government matching for RDSP contributions.
- RESP (Registered Education Savings Plan)Registered account for funding a beneficiary's post-secondary education.
- RRIF (Registered Retirement Income Fund)Mandatory drawdown vehicle that an RRSP must convert to by December 31 of the year the holder turns 71.
- RRIF Minimum WithdrawalThe age-based mandatory percentage of a RRIF's January 1 fair-market value that must be withdrawn each calendar year.
- RRSP (Registered Retirement Savings Plan)Tax-deferred registered retirement account.
- Spousal RRSPAn RRSP where the contributing spouse uses their own contribution room but the account is registered in the name of the other spouse.
- Superficial Loss RuleA denied capital loss when the same security is repurchased within 30 days before or after the sale by the holder or an affiliated person.
- Tax-Loss SellingThe strategy of realizing capital losses before year-end to offset capital gains, subject to the superficial loss rule.
- TFSA (Tax-Free Savings Account)Canadian registered account where investment growth and withdrawals are tax-free.
Products
- Actively Managed FundA mutual fund or ETF where the portfolio manager makes security-selection and allocation decisions with the goal of outperforming a benchmark.
- Asset-Backed Security (ABS)A fixed-income security backed by a pool of underlying receivables such as mortgages, auto loans, or credit card balances, securitized into tranches.
- Bond LadderingA fixed-income portfolio strategy that holds bonds with staggered maturities to manage reinvestment risk and provide regular cash flows.
- Closed-End FundAn investment fund that issues a fixed number of shares at IPO and then trades on a stock exchange, often at a premium or discount to NAVPS.
- Closed-End Fund DiscountThe situation where a closed-end fund's market price trades below its net asset value per share (NAVPS).
- Commodity PoolA mutual fund regulated under NI 81-104 that is permitted to invest primarily in derivatives and other non-conventional instruments.
- Convertible BondA corporate bond that can be converted into a fixed number of common shares at the holder's or issuer's option under defined terms.
- Coupon Bond vs Zero-Coupon BondA coupon bond pays regular interest; a zero-coupon bond pays no interest but is issued at a deep discount and redeemed at face value.
- Covered CallA strategy that combines a long stock position with a short call option on the same stock to generate premium income.
- Deferred Sales Charge (DSC)A redemption fee schedule on mutual fund purchases - banned for new sales June 1, 2022.
- ETF (Exchange-Traded Fund)An open-end fund whose units trade intraday on a stock exchange.
- ETF FactsThe plain-language 2-page pre-sale disclosure document required for ETF purchases, analogous to Fund Facts for mutual funds.
- Floating Rate Note (FRN)A bond with a coupon that resets periodically based on a benchmark interest rate plus a fixed credit spread.
- Forward ContractA customized OTC agreement between two counterparties to buy or sell an asset at a specified price on a future date.
- Fund FactsThe plain-language 2-page pre-sale disclosure document that must be delivered to clients before a mutual fund purchase.
- GIC (Guaranteed Investment Certificate)A deposit instrument issued by a bank or trust company with a guaranteed rate over a fixed term.
- GIC vs HISAThe trade-off between a locked-in rate on a GIC and the daily liquidity of a High-Interest Savings Account.
- Index FundA mutual fund or ETF that aims to replicate the performance of a published market index by holding the same securities in the same proportions.
- Infrastructure FundA pooled investment vehicle that holds stakes in physical infrastructure assets such as toll roads, utilities, pipelines, airports, and telecom networks.
- Intrinsic Value vs Time ValueThe two components of an option premium: intrinsic value is the immediate exercise profit; time value is the remainder.
- Limited Partnership (LP)A flow-through investment structure where limited partners receive tax losses and income allocations proportional to their interest.
- Liquid Alternative Mutual FundA mutual fund regulated under NI 81-102 that is permitted to use alternative strategies including short selling, borrowing, and higher derivative exposure.
- MER vs TERManagement Expense Ratio is the all-in annual cost of owning a fund; Trading Expense Ratio captures brokerage commissions inside the fund.
- Mortgage Investment Corporation (MIC)A pooled mortgage lending vehicle that qualifies for pass-through tax treatment under Income Tax Act section 130.1.
- Option Moneyness (ITM / ATM / OTM)Classification of an option based on whether the underlying asset price is above, at, or below the strike price.
- PACs, SWPs, and AWDsPre-Authorized Contributions, Systematic Withdrawal Plans, and Automatic Withdrawal Decisions are scheduled transaction programs offered by mutual fund dealers.
- Principal-Protected Note (PPN)A bank deposit structured to guarantee the return of principal at maturity while linking the interest to an underlying index or strategy.
- ProspectusThe mandatory disclosure document under NI 41-101 that a reporting issuer must file before distributing securities to the public.
- Protective PutA strategy that pairs a long stock position with a long put option to cap the downside, functioning as portfolio insurance.
- Put-Call ParityThe no-arbitrage relationship C - P = S - PV(K) that must hold for European options on a non-dividend-paying stock.
- REIT (Real Estate Investment Trust)A trust that owns or finances income-producing real estate and trades on an exchange.
- Sales Charge Options (FE / LL / NL)The remaining purchase-fee structures for mutual funds after the DSC ban took effect June 1, 2022.
- Segregated FundAn insurance-company investment product that resembles a mutual fund but adds maturity and death benefit guarantees, sold under provincial insurance Acts.
- Simplified ProspectusThe prescribed disclosure document for publicly offered mutual funds under NI 81-101.
- Structured NoteA debt instrument with an embedded derivative that ties returns to an underlying asset; principal is not guaranteed.
- SwapA bilateral OTC contract that exchanges two cash flow streams, most commonly fixed interest for floating interest on a notional principal amount.
- SwaptionAn option that gives the holder the right, but not the obligation, to enter a specified swap at a future date.
- Target-Date FundA fund-of-funds that automatically shifts its asset allocation from growth-oriented to conservative as a specified target year approaches.