IFIC Unit 2: Registrant Responsibilities
questions with answers
Define Ethics
The principles of conduct governing an individual or a group
Describe the MFDA's standard of conduct rules (4)
1. Deal fairly, honestly and in. good faith with clients
2. Observe high ethical standards and conduct in business dealings
3. Refrain from engaging in unbecoming business conduct and practices
4. Do not do anything that is detrimental to the public interest
Discuss best practices for proper conduct (7)
1. Understanding the client's financial circumstances
2. Presenting all investment recommendations fairly and without false or misleading statements.
3. Always making recommendations in the best interests of the client
4. Clearly distinguishing fact from comment when making recommendations.
5. Avoiding or thoroughly disclosing conflicts of interest that could be perceived to affect your judgement
in giving advice.
6. Protecting the confidentiality of client information
7. Maintaining your proficiency by acquainting yourself with new laws and regulations and new products
in the market.
What is the Compliance Regime?
, the system of controls and supervisor that makes sure that the firm complies with securities legislation
and manages the risks associated with its business. Ex. P&P, docs, training.
Describe the role of the compliance officers
responsible for establishing and maintaining compliance policies and procedures as well as monitoring
and assessing compliance. The COO must submit an annual report to the BOD detailing the compliance
assessment.
Describe the role of the Compliance Department
to ensure that all individual within the firm comply with the regulations outlines in p&p and MFDA rules.
Explain the requirements under the Client Relationship Model (CRM) (3)
1. Relationship Disclosure: clients must understand their obligations and those of the mutual fund
dealers and know what to expect with respect to service levels and cost.
2. Client Communications: must not be false, exaggerated, illegal, be inconsistent. Specific rules
pertaining to rate of return
3. Client Reporting: Account statements are required to be sent every 3 months.
Describe the rules of conduct regarding pre-signed forms
strictly prohibited
Describe the rules of conduct regarding excess trading
excess trading has little to no benefit to the client. typically used to generate commissions for the dealing
rep. Must explain as to why a trade was executed.
questions with answers
Define Ethics
The principles of conduct governing an individual or a group
Describe the MFDA's standard of conduct rules (4)
1. Deal fairly, honestly and in. good faith with clients
2. Observe high ethical standards and conduct in business dealings
3. Refrain from engaging in unbecoming business conduct and practices
4. Do not do anything that is detrimental to the public interest
Discuss best practices for proper conduct (7)
1. Understanding the client's financial circumstances
2. Presenting all investment recommendations fairly and without false or misleading statements.
3. Always making recommendations in the best interests of the client
4. Clearly distinguishing fact from comment when making recommendations.
5. Avoiding or thoroughly disclosing conflicts of interest that could be perceived to affect your judgement
in giving advice.
6. Protecting the confidentiality of client information
7. Maintaining your proficiency by acquainting yourself with new laws and regulations and new products
in the market.
What is the Compliance Regime?
, the system of controls and supervisor that makes sure that the firm complies with securities legislation
and manages the risks associated with its business. Ex. P&P, docs, training.
Describe the role of the compliance officers
responsible for establishing and maintaining compliance policies and procedures as well as monitoring
and assessing compliance. The COO must submit an annual report to the BOD detailing the compliance
assessment.
Describe the role of the Compliance Department
to ensure that all individual within the firm comply with the regulations outlines in p&p and MFDA rules.
Explain the requirements under the Client Relationship Model (CRM) (3)
1. Relationship Disclosure: clients must understand their obligations and those of the mutual fund
dealers and know what to expect with respect to service levels and cost.
2. Client Communications: must not be false, exaggerated, illegal, be inconsistent. Specific rules
pertaining to rate of return
3. Client Reporting: Account statements are required to be sent every 3 months.
Describe the rules of conduct regarding pre-signed forms
strictly prohibited
Describe the rules of conduct regarding excess trading
excess trading has little to no benefit to the client. typically used to generate commissions for the dealing
rep. Must explain as to why a trade was executed.
