CSI 1
The Ontario web-based system to which the trades of unlisted securities are reported.
CUB - Canadian Unlisted Board
The market where newly issued securities are sold by companies and governments to investors.
Primary Market
Privately-owned computerized networks that match orders for securities outside of recognized exchange facilities. Also referred to as Proprietary Electronic Trading Systems (PETS).
ATS - Alternative Trading System
An exchange that deals exclusively with non-agricultural options and futures in Canada.
Montréal Exchange/Bourse de Montréal
Market in which securities are bought and sold by brokers acting as agents for their clients.
Auction Market
The largest stock exchange in Canada with over 1,700 companies listed on the exchange.
TSX - Toronto Stock Exchange
An auction market where byers and sellers of securities meet to trade based on the laws of supply and demand.
Stock Exchange
An individual licensed to transact in the full range of securities. The term refers to employees of CIRO member firms only. Also known as a Registrant or Registered Representative (RR).
Investment Advisor
Securities representing ownership in a company. They carry voting privileges and are entitled to the receipt of dividends, if declared.
Common Share
The highest price a buyer is willing to pay for the financial instrument being quoted.
Bid Price
Organizations, such as pension and mutual fund companies, that trade in large-share quantities or dollar amounts.
Institutional Investor
Also referred to as the unlisted market. Securities are bought and sold over-the-counter with dealers acting as principals when buying and selling securities for clients.
Dealer Market
The lowest price a seller will accept for the financial instrument being quoted.
Ask Price
That part of the capital market in which short-term financial obligations are bought and sold.
Money Market
The ability of the market for a particular security to absorb a reasonable amount of buying or selling at reasonable price changes.
Liquidity
The market where investors trade securities that have already been issued.
Secondary Market
The difference between the bid price and ask price.
Bid-Ask Spread
Canada’s public venture marketplace, the result of the merger of the Vancouver and Alberta Stock Exchanges in 1999.
TSX Venture Exchange
The person for whom a broker executes an order, or a dealer buying or selling for its own account. May also refer to a person’s capital or to the face amount of a bond.
Principal
Financial technology companies that take advantage of computer technology to support or enable a variety of financial products and services.
Fintech
The role of an investment dealer when it acts on behalf of a buyer or a seller of a security and does not itself own title to the securities at any time during the transaction.
Agent
A company that acts as an intermediary by matching investors with the users of capital.
Investment Dealer
The process of confirming and matching security trade details.
Clearing
Investment fund using proceeds from shares and units sold to investors to invest in financial securities, redeemable on demand from the fund at the current net asset value per share.
Mutual Fund
A type of bank that is federally regulated and is a foreign bank branch of a foreign institution.
Schedule III Bank
The irrevocable moment when cash and securities are exchanged.
Settlement
Policies intended to separate and isolate investment decision-making persons in a firm from others in the firm who have undisclosed material information that could influence those decisions.
Firewall
Brokerage house that buys and sells securities for clients at a greater commission discount than full-service firms.
Discount Broker or Self-Directed Broker
Shares in this investment fund type are readily transferable in the open market and are bought and sold like other shares. Capitalization is fixed.
Closed-end Fund
A type of firm that offers products and services across the financial industry and participates fully in both the retail and institutional markets.
Integrated Firm
Type of bank that is Canadian-owned and regulated by the Bank Act.
Schedule I Bank
Type of bank that is incorporated and operates in Canada as a federally regulated foreign bank subsidiary.
Schedule II Bank
A type of fund that manages a pool of assets with the goal of supplying its beneficiaries with income during their retirement years.
Pension Fund
A type of financial intermediary that purchases instalment sales contracts from retailers and dealers at a discount.
Sales Finance Company
Provides electronic clearing services; physical and electronic facilities to deposit and withdraw depository-eligible securities; management of related ledger positions.
CDS Clearing and Depository Services Inc
An online investment service that provides clients with automated investment advice.
Robo-Advisor
Who protects me if the bank goes Bankrupt
CDIC - Canadian Deposit Insurance Corporation
What if I lose money because a mutual fund dealer I invest through goes bankrupt? What organization would protect me?
CIPF - Canadian Investor Protection Fund
Who protects the deposits of Credit Union Members?
PIC - Provincial Insurance Corporations
What if the investment I buy declines in value? What organization protects me?
No Protection
Which activity is a requirement of the Gatekeeper Role?
Collect client information that is accurate and complete.
Identify the general principle underlying Canadian securities legislation.
Full, true and plain disclosure
Federal regulatory agency whose main responsibilities regarding insurance companies and segregated funds are to ensure that the companies issuing the funds are financially solvent.
OSFI - Office of the Superintendent of Financial Institutions
Role of dealers and all of their employees who are responsible for protecting the markets from potentially illegal client activities; Universal Market Integrity Rules set out specific rules.
Gatekeeper Role
A web-based system that permits mutual fund salespersons and investment advisors to file applications for registration electronically.
NRD - National Registration Database
A person who is licensed to sell securities but is not permitted to give investment advice.
Investment Representative
Making a practice, directly or indirectly, of taking the opposite side of the market to clients, or effecting a trade for the advisor’s own account before effecting a trade for a client.
Front-Running
Independent organization that investigates customer complaints against financial services providers.
OBSI - Ombudsman for Banking Services and Investments
The general principle underlying Canadian securities legislation. All pertinent facts by those offering securities for sale to the public must be disclosed.
Full, True, and Plain Disclosure
Protects eligible customers in the event of the insolvency of an SRO dealer member.
CIPF - Canadian Investor Protection Fund
Forum for the 13 securities regulators of Canada’s provinces and territories to co-ordinate and harmonize the regulation of the Canadian capital markets.
CSA - Canadian Securities Administrators
A method of dispute resolution in which an independent arbitrator is chosen to assist aggrieved parties recover damages.
Arbitration
Recognized by Securities Administrators, with powers to establish and enforce industry regulations to protect investors and to maintain fair, equitable, and ethical practices in the industry.
SRO - Self-Regulatory Organization
A list, administered by the CRTC, where Canadians can register their telephone numbers to prohibit telemarketers and clients of telemarketers from calling the number.
NDNCL - National Do Not Call List
A federal Crown Corporation providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails.
CDIC - Canadian Deposit Insurance Corporation
Administers the regulatory framework surrounding Québec’s financial sector including securities, distribution of financial products and services, and financial institutions.
AMF - Autorite des Marches Financiers
Term that is used to refer to the controls that inhibit information sharing between various businesses and business units.
Firewall
Type of investment fund that continually issues shares to investors and redeems these shares on demand.
Mutual Fund
Federally regulated foreign bank subsidiaries that have been authorized under the Bank Act to do banking business in Canada.
Schedule II Banks
The Role that an investment dealer is taking when the firm does not assume ownership of securities at some stage in the buying and selling transaction with investors.
Agent
Term used to refer to the difference between what banks pay as interest on deposits and what they charge as interest on loans.
Spread
Kuy, a very successful and knowledgeable investor, has inherited $200,000 and wants to create a diversified portfolio while minimizing costs. Determine the type of investment firm that is best suited for this client.
Self-Directed Broker
A large furniture store wants to sell its consumer instalment contracts to generate cash. Determine the financial intermediary the store should contact.
Sales Finance Company
Which department is responsible for the portfolio management activities in a securities firm?
Front Office
Identify the process by which the number of securities and the amount of cash that has to change hands among the various exchange members each day is substantially reduced.
Netting
Identify the investment service that features portfolios created using algorithms based on modern portfolio theory and online client questionnaires.
Robo-Advisors
Thuy’s firm develops more efficient online financial planning applications for investors and investment advisors. Identify the type of firm Thuy owns.
Fintech
ABC Securities offers a wide range of products and services to both retail and institutional clients, as well as underwriting bond and equity issues. Determine the category of firm ABC belongs to.
Integrated Firms
XYZ Investments, an investment dealer, regularly takes positions in DEF Inc, a TSX listed equity, with a goal of improving liquidity in DEF while smoothing out unwarranted price fluctuations. Identify the role XYZ likely plays in the stock market.
Market Maker
Identify the role of capital investment in the economy.
Creating Growth
Non-financial domestic corporations are sources of capital. Identify what role these corporations play in the capital markets.
Not significant providers of permanent funds.
Identify the typical role of foreign investors in Canadian Capital markets.
Direct investment in Canadian industries.
Identify the characteristics of capital.
Mobile, Scarce, and Sensitive to its Environment
Identify the transaction that takes place in the secondary market.
Resale of previously issued securities.
Identify a difference between auction and dealer markets.
Prices are publicly visible in the auction market but not in the dealer market.
Nicolae is considering selling his common shares of DEF Corp. Identify the price Nicolae would most likely receive if he were to enter an order to sell his shares.
Bid price
Select the exchange in Canada that deals exclusively with financial futures and options.
MX - Montreal Stock Exchange/The Bourse de Montreal
Choose the system that the Ontario Securities Commission requires firms to use to report unlisted trades in Ontario.
CUB - Canadian Unlisted Board
Identify the role that the Canadian Securities Exchange (CSE) plays in the Canadian marketplace.
Market for emerging companies.
Identify the security that has its value based on an underlying instrument.
Derrivative
Select the electronic fixed-income trading system that operates a retail and an institutional fixed-income marketplace.
CBID/CBID Institutional
Provides institutional investors with electronic access to federal bond bid and offer prices and yields from its six bank-owned dealers.
CanDeal
A joint venture of several CIRO member firms and operates as an electronic trading system for fixed income securities providing investors with real-time bid and offer prices and hourly trade data.
CanPx
Makes direct cash loans to consumers, who usually are unable to secure a loan from a bank. Consumer finance companies typically charge a higher interest rate than banks.
Consumer Finance Company
A type of registered pension plan in which the annual payout is based on a formula. The plan pays a specific dollar amount at retirement using a predetermined formula. Company contributes.
Defined Benefit Plan
A type of registered pension planwhere the amount contributed is known but the dollar amount of the pension to be received is unknown. Also known as a money purchase plan. Both company and employee contribute.
Defined Contribution Plan
Spreading investment risk by buying different types of securities in different companies in different kinds of businesses and/or locations.
Diversification
Confirming a transaction where no trade has been executed.
Bucketing
The responsibility of an investment advisor, mutual fund salesperson or financial planner to always put the client’s interests first. The fiduciary is in a position of trust and must act accordingly.
Fiduciary Responsibility
The policy pursued by the federal government to influence economic growth through the use of taxation and government spending to smooth out the fluctuations of the business cycle.
Fiscal Policy
The prospectus which supersedes the preliminary prospectus and is accepted for filing by applicable provincial securities commissions. The final prospectus shows all required information pertinent to the new issue and a copy must be given to each firsttime buyer of the new issue.
Financial Prospectus
An institution such as a bank, lifeinsurance company, credit union or mutual fund which receives cash, which it invests, from suppliers of capital
Financial Intermediary
Securities that generate a predictable stream of interest or dividend income, such as bonds, debentures and preferred shares.
Fixed-Income Securities
Making a practice, directly or indirectly, of taking the opposite side of the market to clients, or effecting a trade for the advisor’s own account prior to effecting a trade for a client.
Front-Running
A new issue of securities offered to the public for investment for the very first time. IPOs must adhere to strict government regulations as to how the investments are sold to the public.
IPO - Initial Public Offering
A legal entity that represents the collective financial interests of a large group. A mutual fund, insurance company, pension fund and corporate treasury are just a few examples
Institutional Client
Organizations, such as pension and mutual fund companies, that trade in large-share quantities or dollar amounts. They typically have a steady flow of money to invest.
Institutional Investor
Investment dealer that offersproducts and services that cover all
aspects of the industry, including full participation in both the institutional and the retail markets.
Integrated Firm
An individual licensed to transact in the full range of securities. IAs must be registered by the securities commission of the province in which he or she works. The term refers to employees of SRO member firms only. Also known as a Registrant or Registered Representative (RR).
Investment Advisor
A small retail or institutionalinvestment dealer that specializes in a specific market segment such as stock trading, bond trading, unlisted stocks, arbitrage, portfolio management, targeted industry research, underwriting junior mines, oils and industrials, mutual fund distributions, or tax-shelter sales.
Investment Boutique