Chapter Two: The Canadian Securities Industry

54 Questions | By Smzachary | Updated: Mar 22, 2022 | Attempts: 130

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Chapter Two: The Canadian Securities Industry.

Questions and Answers

1.

What is the difference between a primary issue stock, and IPO stock and a non-IPO stock?
2.

What is a quasi-financial entity?
3.

What banks operate under the bank act under foreign subsidiaries.
4.

Explain what the following statement means: "The aggregate of all assessments in a calendar year may not exceed 1% of the aggregate gross revenue of all member firms of SRO in that year." CIPF collects funds from members of the SRO sponsoring firms"
5.

Explain: Acting as a principal vs. Acting as an agent.
6.

In secondary trading of debt securities, which role does the firm more typically play?
7.

Explain: The prudent portfolio approach vs. legal for life
8.

Why dosen't the bank act allow for selling of insurance related products directly through the branch system?
9.

Explain: Agent vs. Market Maker
10.

Explain: Dealers vs. Principal
11.

What degree of risk do the issuer and underwriter have in the underwriting process?
12.

In the primary market which party takes the risk; the issuer or the dealer?
13.

"Which of the following statements is correct regarding underwriting risk
- A.
  
  The financing and banking groups assume the risk of the underwriting as principals.
- B.
  
  The risk remains with the issuer until the issue is complete.
- C.
  
  The risk is shared equally between the issuer and the underwriters.
- D.
  
  The risk is borne primarily by the lead underwriter
14.

Give an example of the underwriting process using (a) CNR Company @ $20 (b) RBC Capital Markets (c) the TSX. Explain how profit is made.
15.

How does someone act as a principal in a secondary market?
16.

Another of the roles investment dealers (securities firms) play, when acting as intermediaries in the securities industry, is agent. Explain this statement.
17.

With the consolidation that has taken place within the securities industry over the twenty years, the distinction between principal and agency functions in the securities industry has all but dissapeared. Explain what this means.
18.

When a securities firm is acting as an agent, how much does it earn from its spread?
19.

Which function generally handles underwriting in the primary market?
20.

Who assumes the risk in an agent transaction?
21.

What is the difference between schedule II and III banks?
22.

What services do the banks typically include (excluding products offered by bank subsidiaries)?
23.

What services to the bank offer through subsidiaries?
24.

What are the services offered by trust companies?
25.

What are some services offered by credit companies?