An open-end fund whose units trade intraday on a stock exchange.
ETFs combine the diversification of mutual funds with intraday trading and (typically) lower management fees. The creation/redemption mechanism through authorized participants keeps the market price aligned with NAV. Active ETFs, leveraged ETFs, and inverse ETFs add complexity and require additional KYP/suitability scrutiny.
NI 81-102; CSA Staff Notice 81-326
Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.
A Canadian corporation announces a quarterly cash dividend with a record date of Thursday, June 5. Under the T+1 equity settlement cycle, what is the ex-dividend date?
Outcome 7.3 · click for answer
Under T+1 settlement, a buyer must purchase shares at least one business day before the record date to be the registered owner on the record date. Therefore, the ex-dividend date is one business day before the record date. With a record date of Thursday, June 5, the ex-dividend date is Wednesday, June 4. A buyer purchasing on or after June 4 will not receive the dividend. Under the older T+2 cycle the ex-dividend date was two business days before; since Canada moved to T+1 in May 2024, the ex-dividend date shifted forward by one day.
A Canadian corporation with a December 31 fiscal year-end declares a dividend of $0.50 per share, payable on January 15 to shareholders of record on January 5. A client buys the shares on January 4. Is the client entitled to receive the dividend?
Outcome 7.3 · click for answer
In Canada, equities now settle on T+1 (trade date plus one business day). The ex-dividend date is set one trading day before the record date. An investor must purchase shares before the ex-dividend date to be a shareholder of record and receive the dividend. With a January 5 record date and T+1 settlement, the ex-dividend date would be January 4. A purchase on January 4 would settle on January 5 and the client would be on record; so they would receive the dividend. However, if the purchase were on January 4 as the ex-date, the analysis depends on whether that trade settles in time to be recorded. The key principle is that it is the ex-dividend date; not the payment date; that governs dividend entitlement.
GIC (Guaranteed Investment Certificate)
A deposit instrument issued by a bank or trust company with a guaranteed rate over a fixed term.
REIT (Real Estate Investment Trust)
A trust that owns or finances income-producing real estate and trades on an exchange.
Deferred Sales Charge (DSC)
A redemption fee schedule on mutual fund purchases - banned for new sales June 1, 2022.
GIC vs HISA
The trade-off between a locked-in rate on a GIC and the daily liquidity of a High-Interest Savings Account.
MER vs TER
Management Expense Ratio is the all-in annual cost of owning a fund; Trading Expense Ratio captures brokerage commissions inside the fund.
Sales Charge Options (FE / LL / NL)
The remaining purchase-fee structures for mutual funds after the DSC ban took effect June 1, 2022.
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