Use this syllabus as your checklist for RSE. Work top-down (topic → section → learning objectives), and keep a miss log so every wrong answer becomes a one-sentence rule.
Quick links:
- Practice: drill each topic as you study -> open RSE practice
- Official CIRO pages: Exam Hub and RSE page -> open
What’s covered
Know-Your-Client (KYC) and suitability (23%)
Firm-Client Relationship and Jurisdictional Considerations
- Explain the client relationship model used by an Investment Dealer and how the model impacts a Registered Representative's responsibilities to a retail client.
- Distinguish concepts of trust and agency in a retail securities relationship and identify implications for authority, disclosure, and documentation.
- Identify common conflicts of interest in the firm-client relationship and describe, at a high level, how conflicts are identified, avoided, addressed, and disclosed in the client's best interest.
- Apply firm procedures for working with clients residing in the United States (including snowbirds) and other foreign jurisdictions to a scenario, including identifying when additional restrictions or steps may apply.
- Determine the appropriate next steps when a client changes residence (or jurisdiction), including KYC updates, account restrictions, and required disclosures.
- Explain the respective roles of the Investment Dealer and the Registered Representative in establishing, documenting, and maintaining the client relationship.
- Recognize scenarios where the client relationship model, conflict management, or jurisdictional status requires escalation to supervision/compliance before taking action.
- Collect and categorize client financial circumstances for KYC (income, liquidity needs, assets, liabilities, net worth, and borrowing to invest) and explain why each affects suitability.
- Document personal circumstances and investment knowledge in KYC and explain how these factors influence product selection and communication needs.
- Define and document investment objectives, needs, and time horizon and map them to an appropriate investment approach at a high level.
- Document client constraints and restrictions (including ESG criteria, equity/diversity/inclusion considerations, and other preferences) and reflect them in recommendations.
- Explain why discussions with clients must be accurately documented and confirmed by the client, and apply this requirement to a scenario with a discrepancy or dispute.
- Explain the Registered Representative's primary responsibility for KYC, including the prohibition on delegating KYC and the obligation to keep KYC current.
- Identify common account opening records and acknowledgements collected by the Investment Dealer (identity verification, disclosures, account appropriateness, KYC, and trusted contact person refusal records).
- Apply identity verification and recordkeeping expectations to an onboarding scenario, including recognizing missing or inconsistent information.
- Determine when KYC updates are required based on client interactions, material changes, or new information, and document the update appropriately.
Risk Profiling, Appropriateness, and Suitability Triggers
- Explain the importance of a thorough risk profiling process and distinguish risk tolerance (willingness), risk capacity (ability), and risk need (required risk to meet goals).
- Apply behavioural aspects (knowledge, experience, preferences) to assess risk tolerance in a client scenario.
- Apply client financial situation, investment horizon, and liquidity needs to assess risk capacity in a client scenario.
- Analyze how required rates of return, market risk environment, and consequences of failure affect a client's risk need.
- Resolve conflicts between client expectations and the assessed risk profile by selecting an appropriate response (education, reframing goals, alternative solutions, or declining/escalating).
- Apply the account appropriateness obligation to a scenario and distinguish it from a trade-level suitability determination.
- Analyze the difference between account appropriateness and suitability determinations, including when each applies and how KYC feeds each process.
- Identify triggering events that require monitoring and a suitability review (material client changes, product/market research, and economic/political/social events).
- Analyze how updates or changes may impact portfolio suitability and determine whether rebalancing, product changes, or client communication is required.
Business Structures and Account Types
- Distinguish common business structures (sole proprietorship, partnership, corporation - private vs public, and co-operative) and identify how structure can impact investment opportunities and account setup.
- Select an appropriate account type (advisory non-managed, managed, discretionary) based on client needs, service level, and authority limits.
- Differentiate fee-based and commission-based advisory accounts and identify the client experience and cost implications of each.
- Compare cash accounts versus margin accounts, including key advantages, disadvantages, and suitability considerations.
- Identify account opening documentation requirements and the type/amount of information required based on the Investment Dealer's business model, products, and services.
- Determine when one set of KYC information may be used across multiple accounts and when separate KYC information is required.
- Explain the purpose of a trusted contact person (TCP) and what a TCP arrangement permits and does not permit.
- Apply the process for establishing a TCP, including documenting the discussion and handling a client refusal.
- Identify when contacting a TCP may be appropriate (capacity concerns or suspected financial exploitation) and when it would be inappropriate.
- Recognize common indicators of diminished capacity and apply an appropriate response path, including escalation when needed.
- Recognize common indicators of potential financial exploitation and apply an appropriate response path, including escalation when needed.
- Apply conditions for using temporary holds in scenarios involving capacity concerns or financial exploitation.
- Document TCP-related decisions and actions (including holds, contacts, and refusals) to create an appropriate audit trail.
Relationship Disclosure, Confidentiality, and Welcome Package
- Explain the objective, frequency, and review expectations for the Relationship Disclosure document and identify the core content that must be addressed.
- Apply relationship disclosure expectations to a scenario, including identifying missing or unclear disclosures.
- Analyze why containment of confidential information is critical and describe how information barriers/firewalls support this objective.
- Explain the use of grey lists and restricted lists and identify scenarios where trading or communications restrictions may apply.
- Identify how investment banking, research, and corporate finance activities can create confidentiality and conflict risks, and determine when escalation is required.
- Apply cybersecurity and privacy principles to protect client information, including recognizing common control failures (e.g., insecure sharing or off-channel communications).
- Identify the purpose of key documents in an Investment Dealer Welcome Package (fee schedule, CIRO brochures, CIPF information, derivative risk disclosure, conflict disclosures, and complaint handling procedures).
- Apply Welcome Package and disclosure expectations to an onboarding scenario, including identifying which items must be provided and documented.
KYP, Suitability Determinations, Conflicts, and Standards of Conduct
- Apply product due diligence obligations in a scenario and distinguish what obligations rest with the Investment Dealer versus the Approved Person/Registered Representative.
- Apply Know-Your-Product (KYP) to an investment by evaluating structure, features, initial/ongoing costs, and key risks (including cost impact on outcomes).
- Apply retail client suitability determination requirements to a recommendation scenario, including mapping KYC to a recommendation and avoiding excessive switching (churning).
- Apply suitability and documentation expectations when client instructions are unsolicited or appear unsuitable, including identifying when to warn, document, decline, or escalate.
- Apply common types of investment actions (buy, sell, hold, deposit, exchange, or transfer) to a scenario and identify suitability and documentation implications.
- Apply conflict of interest management requirements in the client's best interest (identify, avoid, address, and disclose) to a scenario.
- Apply requirements for outside activities (definition, pre-approval, and disclosure) to a scenario.
- Apply requirements and prohibitions for personal financial dealings with clients (borrowing/lending, settlement agreements, accepting consideration, authority/control, commingling, partnerships, and investment clubs) to a scenario.
- Apply CIRO standards of conduct to scenarios involving a Registered Representative's dealings with clients or with their firm, including identifying conduct that would be inconsistent with expected standards.
Fixed income (8%)
Debt Market Regulation and Prohibited Practices
- Explain, at a high level, the purpose of regulatory requirements for debt markets to promote fair and efficient markets.
- Identify the requirement for firm policies and procedures for debt market activity and the types of controls such policies are intended to address.
- Identify prohibited practices in debt markets and distinguish obligations on the Investment Dealer versus obligations on the Approved Person.
- Apply debt market conduct expectations to a scenario involving a retail fixed-income transaction, including identifying when escalation is required.
- Recognize situations where a fixed-income recommendation or trade may create a conflict of interest or fairness issue and select an appropriate control or response.
- Explain how costs associated with acquiring and holding fixed-income products can affect investor outcomes and must be considered in recommendations.
Fixed-Income Products, Features, and Risk-Return Profiles
- Differentiate Government of Canada, provincial/municipal, corporate fixed-income securities, and guaranteed investment certificates (GICs) by key features and typical risks.
- Apply fixed-income terminology (par value, coupon rate, maturity date, term to maturity, price, yield to maturity, settlement, and covenants) to a scenario.
- Analyze advantages and disadvantages of fixed-income products for both investors and issuers.
- Analyze sources of fixed-income risk and return and identify how product features and costs change the risk-return profile.
- Explain how special fixed-income features (strips, floating-rate, callable/puttable, convertible, extendable, and sinking/purchase funds) affect cash flows, reinvestment risk, and price behaviour.
- Select an appropriate fixed-income product type or feature for a client scenario based on objectives (income vs total return), horizon, and risk profile.
Pricing, Yield, Duration, and Time Value of Money
- Calculate and interpret standard bond yields (current yield, approximate yield to maturity, and zero-coupon yield) using information provided.
- Interpret yield curves and relate curve shape or changes to economic expectations and interest rate risk at a high level.
- Apply relationships between coupon, yield, term-to-maturity, and price volatility to explain bond price sensitivity.
- Distinguish Macaulay duration versus modified duration and explain how each relates to price sensitivity.
- Use modified duration to estimate the change in a bond's price given a change in yields.
- Apply time value of money to compute the present value of a fixed-income security (or solve for a missing variable) given cash flow inputs and a discount rate.
Equities (10%)
Prospectus Requirements and Exemptions (Canada)
- Explain when a prospectus is required under National Instrument 41-101 and when a prospectus exemption under National Instrument 45-106 may apply.
- Distinguish primary versus secondary distributions and explain how prospectus requirements can apply to each.
- Explain how prospectus and disclosure concepts interact with takeovers, advertising/marketing, and timely disclosure requirements at a high level.
- Define exempt market securities and private placements and explain, at a high level, the purpose of the accredited investor concept.
- Apply prospectus/exemption concepts to a scenario to identify whether a transaction is likely in the public market versus exempt market, and what investor protections differ.
Common Shares and Canadian Depositary Receipts (CDRs)
- Differentiate classes of common shares by dividend rights, voting rights, and rights to surplus on dissolution.
- Explain the key features of Canadian depositary receipts (CDRs), including holder rights and how the CDR ratio affects exposure.
- Analyze risk/return and cost considerations for investing in common shares or CDRs in a scenario.
- Explain advantages and disadvantages of common share ownership for investors and the issuer.
- Explain how common corporate actions (dividends, splits/consolidations, and share buybacks) affect shareholder position and expected returns.
Preferred Shares and Comparisons
- Differentiate classes of preferred shares by dividend rights, voting rights, and rights on dissolution.
- Analyze risk/return and cost considerations for investing in preferred shares in a scenario.
- Apply the distinction between common and preferred shares to select an appropriate security type for a client scenario.
- Explain advantages and disadvantages of preferred shares for investors and issuers, including how priority and income features differ from common shares.
- Recognize how dividend taxation differences and investor objectives (income vs growth) may influence the choice between common and preferred shares.
Equity Valuation and Time Value of Money
- Apply time value of money concepts to estimate the present value of an equity security using a discounted cash flow (DCF) approach in a simplified scenario.
- Interpret key assumptions that drive DCF-style equity valuation (cash flows, discount rate, and growth) and how assumption changes affect value.
- Apply a price-earnings growth (PEG-style) model conceptually to compare equities, including recognizing limitations and common pitfalls.
- Select an appropriate equity valuation approach for a scenario based on the information available and the nature of the issuer (mature vs high growth).
- Explain how costs associated with buying/holding/selling equity securities can change investor returns and must be considered in analysis.
Securities analysis (11%)
Company Analysis Process and Industry Context
- Identify core documents and sources used in company analysis (financial statements, disclosures, and market information) and explain how each supports valuation and risk assessment.
- Explain how to provide clear, client-appropriate explanations of company analysis and valuation conclusions when a retail client requests them.
- Determine when collaboration or consultation with internal or external subject matter experts is appropriate for company analysis issues.
- Classify industries into sectors (consumer products, manufacturing, services, and technology) and interpret sector context in company valuation.
- Apply sector and industry context to a scenario to identify how peer comparisons and competitive dynamics can influence valuation and risk.
Financial Statements: Purpose, Structure, and Interpretation
- Explain the purpose and content of a statement of financial position (balance sheet) and how items are classified.
- Explain the purpose of the statement of changes in equity and how it relates to both the balance sheet and the statement of comprehensive income.
- Explain the purpose and content of the statement of comprehensive income, including major sources of income.
- Explain the purpose and content of the statement of cash flows and distinguish cash flows from operating, investing, and financing activities.
- Interpret the role of financial statement notes and the auditor's report, including identifying common limitations or red flags.
Ratio Analysis and Valuation Metrics (With Calculations)
- Calculate and interpret liquidity ratios (current, quick, and cash ratios) using information provided.
- Calculate and interpret leverage/solvency ratios (debt-to-equity, debt-to-assets, and interest coverage) using information provided.
- Calculate and interpret profitability and efficiency ratios (gross/pre-tax/net margins, ROA/ROIC, and turnover ratios) using information provided.
- Calculate and interpret equity ratios (dividend payout, retention rate, earnings per share, book value per share, and free cash flow to equity) using information provided.
- Analyze value ratios (e.g., price-to-earnings, dividend yield) using trend analysis and external comparisons to draw an investment conclusion.
Market Data, Restrictions, Indices, and Benchmarking
- Interpret exchange and regulator information for equities and fixed income (price, volume, yields, and market capitalization) to support analysis.
- Identify trading restrictions such as cease trade orders (CTOs) and explain how restrictions can affect trading decisions and valuation assumptions.
- Explain the purpose of market indices and how index values are constructed (market-value weighted, price weighted, equal weighted; price return vs total return).
- Apply indices to provide a market summary and to calculate performance versus an appropriate benchmark.
- Differentiate index concepts across asset class, sector, country, and international contexts and select an appropriate index for a client scenario.
Market Behaviour Analysis and Macroeconomic Drivers
- Differentiate fundamental, quantitative, and technical/statistical analysis and identify what each method uses to assess market behaviour.
- Analyze how assumptions and valuation approaches can change an analysis conclusion and identify common sources of model risk.
- Apply macroeconomic factors (interest rates, inflation, employment, and productivity) to explain expected security price and market movements.
- Analyze how asset class, volatility, market sector, economic cycle, and benchmark choice can affect performance expectations across different time horizons.
- Select an appropriate mix of analysis methods and information sources for a scenario and justify the choice.
Managed products and other investments (13%)
Types of Managed Products and Core Investor Considerations
- Differentiate major types of managed products (mutual fund trusts and corporations, income trusts, closed-end funds, REITs, ETFs, wrap/fund-of-funds structures, and pooled funds).
- Analyze how managed products can provide different exposures (income/growth, asset classes, sectors, geography) and how exposure selection supports client objectives.
- Analyze diversification versus concentration trade-offs in managed products, including how ESG and other ethical considerations can constrain the opportunity set.
- Explain advantages and disadvantages of managed products relative to direct investments, including cost, control, transparency, and operational considerations.
- Apply managed product selection factors to a scenario to match product type and exposure to a client's objectives, constraints, and risk profile.
Mutual Funds: Structure, Participants, Fees, and Pricing
- Explain the structure of mutual funds (trust vs corporate) and identify roles of key participants (trustee, manager, distributor, and custodian).
- Explain mutual fund fee structures and how fees affect investor outcomes over time.
- Explain daily pricing and net asset value concepts for mutual funds and how pricing relates to transactions.
- Analyze mutual fund investor considerations (advantages/disadvantages, provider considerations, risk-return sources, and risk-ranking methodologies).
ETFs and Fund Management Styles
- Explain how ETFs are created and how market price can differ from net asset value (NAV), including the impact on investors.
- Analyze ETF access and trading characteristics and compare ETF advantages/disadvantages to mutual funds.
- Explain fund management styles (active vs passive, smart beta/factor investing, leveraged funds, and inverse funds) and identify appropriate use cases and risks.
- Analyze cost structures of ETFs and compare them to mutual funds, including recognizing when costs may not be obvious to the client.
- Identify key information sources and required disclosures for mutual funds and ETFs, including Fund Facts documents and ETF fact sheets, and explain their purpose.
- Calculate and interpret holding period return and distinguish money-weighted versus time-weighted rates of return.
- Evaluate fund performance using appropriate benchmarks and peer groups and recognize common comparison errors.
- Apply valuation concepts for managed funds, including calculating NAV per share (NAVPS) and interpreting total return measures.
- Calculate the number of mutual fund units or ETF shares purchased/issued given an investment amount and the stated NAV/price (including any stated sales charge/fees).
- Assess whether a performance benchmark is specified in advance, appropriate, measurable, unambiguous, reflective, accountable, and investable.
Costs, Taxes, Redemptions, and Product Selection Decisions
- Explain how loads/charges, turnover, and taxes can impact managed product performance at both the fund level and investor level (including withholding tax concepts).
- Interpret management expense ratio (MER) and trading expense ratio (TER) and assess expense ratios as part of due diligence.
- Analyze redemption implications (tax consequences, withdrawal plans, and gating/suspension of redemptions) and apply them to a client scenario.
- Apply factors to decide between managed and non-managed products, including the investor's decision and the Registered Representative's recommendation rationale.
Alternative Strategy Funds and Other Investments
- Differentiate types of alternative strategy funds and alternative assets (hedge funds, structured products, alternative investment funds, crypto-assets, private equity, and venture capital).
- Analyze structural features and fee models of alternatives (management fees, performance fees, hurdle rates) and how they affect incentives and investor outcomes.
- Analyze key risks and return drivers of alternatives (liquidity, leverage, valuation complexity, counterparty and operational risk) and how costs affect net performance.
- Explain the accredited investor requirement concept and apply it to identify when access to certain products may be restricted.
Portfolio construction (11%)
Asset Allocation, Asset Mix, and Rebalancing
- Explain the principles of portfolio construction and the role of asset allocation in meeting client objectives.
- Distinguish strategic versus tactical asset allocation and explain how rebalancing supports portfolio discipline.
- Select an asset mix strategy for a scenario and justify the choice using KYC information and client constraints.
- Analyze the costs of implementation and rebalancing (spread, commission, and time) and their impact on expected returns.
Risk Types and Risk Measures
- Identify key types of investment risk (interest rate, inflation, liquidity, capital, income, issuer, and financial crime risk) and match them to products or scenarios.
- Interpret what standard deviation and variance indicate about the risk of an asset or portfolio.
- Interpret beta and multi-factor exposures and explain how they relate to systematic risk and diversification.
- Interpret drawdown as a risk measure and identify when drawdown may be more informative than volatility for a client discussion.
Risk Management, Diversification, Hedging, and Short Selling
- Apply diversification and hedging concepts to reduce risk while pursuing return objectives in a scenario.
- Analyze factors that affect the expected return and risk of a portfolio and how those factors influence asset selection.
- Explain the process of short selling and the primary risks associated with short positions.
- Apply margin requirements and cash flow implications for long versus short positions at a high level, using information provided.
Portfolio Theory and Optimization Models
- Explain modern portfolio theory (mean-variance) and the concept of efficient diversification versus naive diversification.
- Identify how industry or issuer concentration can create diversification risk and apply an appropriate mitigation approach.
- Describe, at a conceptual level, the Black-Litterman model and Monte Carlo simulation and why they may be used in portfolio construction.
Asset Pricing Models and Efficient Markets
- Compare the purpose, advantages, and disadvantages of asset pricing models (CAPM, APT, and multi-factor models such as Fama-French and Carhart).
- Use CAPM to calculate expected return (and interpret risk) for an asset or portfolio using risk-free rate, beta, and market risk premium inputs.
- Interpret asset pricing model outputs in a portfolio decision context, including recognizing key limitations and assumptions.
- Explain implications of the efficient markets hypothesis (EMH) for active versus passive portfolio management.
Active and Passive Portfolio Management Techniques
- Differentiate active equity management techniques (top-down vs bottom-up, sector rotation, growth vs value, and market timing) and identify risks of each approach.
- Differentiate passive equity management techniques (buy-and-hold and tracking/indexing) and explain key trade-offs such as tracking error and fees.
- Distinguish passive and active fixed-income management techniques (index matching, immunization, duration management, bond swaps, and sector rotation) and select an approach for a scenario.
Investment recommendations (12%)
Objectives, Constraints, Behavioural Finance, and Client Decision-Making
- Analyze the relationship between a client's objectives/needs, risk profile, and expected performance outcomes.
- Analyze how non-financial constraints (ESG criteria, equity/diversity/inclusion considerations, and other preferences) impact the opportunity set and suitability.
- Apply behavioural finance principles to a client scenario and select an appropriate approach to reduce decision errors.
- Recognize common behavioural biases (cognitive, information-processing, emotional, and capital-market biases) and match a practical mitigation technique to each.
Suitability and Product Selection for Retail Clients
- Apply retail suitability determination requirements to select suitable products, including considering the firm's product shelf constraints and the client's net worth and liquidity needs.
- Incorporate cash management planning and savings strategies into an investment recommendation scenario.
- Explain features of government pension programs and apply them to a client scenario when making retirement-related recommendations.
- Apply KYC information to select an appropriate account structure and initial product mix for a retail client.
Portfolio Selection Workflow and Conflict Resolution
- Choose a portfolio for a client using KYC information, including objectives, time horizon, and risk profile.
- Assess a client's current portfolio composition and identify risk level and potential shortfall relative to objectives.
- Select an investment management strategy appropriate to a client scenario and justify the choice.
- Resolve conflicts between a client's expectations and risk profile using communication, alternatives, and documented rationale.
- Apply cash flow analysis concepts at a practical level to assess whether a proposed portfolio or investment action can realistically meet the client's cash needs and constraints.
Investment Actions, Alternatives, and Cost Impacts
- Determine when significant changes in KYC information trigger a reassessment of recommendations and potential portfolio actions.
- Analyze how an investment action can unexpectedly affect concentration or liquidity and select an appropriate risk control response.
- Assess how costs can impact client returns and incorporate cost impacts into a recommendation.
- Generate and compare a reasonable range of alternative actions for a client scenario before finalizing a recommendation.
Recommendation Process and Financial Goal Calculations
- Analyze the pros/cons and risks of each recommended product or investment action and communicate them in client-appropriate language.
- Explain what a recommended investment action can accomplish for a client (and what it cannot) based on goals and constraints.
- Apply a structured process to secure the client's commitment to a recommended action, including documenting consent and rationale.
- Use time value of money to calculate either (a) the regular investment required to meet a future objective, or (b) the regular income supported by a lump-sum investment (present value of an annuity).
Tax Planning and Complaint Handling
- Apply basic personal and corporate tax planning strategies (registered accounts, deductions/credits, income splitting, and tax loss harvesting) to an investment recommendation scenario.
- Select an appropriate tax-preferential account (FHSA, RRSP, RESP, TFSA) for a stated client goal and constraints, and explain the main planning tradeoff at a high level.
- Differentiate corporate active versus passive income at a high level and apply integration/notional account concepts (e.g., CDA, RDTOH, GRIP) to a simplified tax-aware planning scenario using only information provided.
- Apply Canadian capital gains taxation concepts (capital gains/losses, tax treatment, and common minimization strategies) to a scenario.
- Apply Canadian income taxation concepts for investment income (interest and dividends: eligible, non-eligible, and foreign) to a scenario.
- Apply regulatory requirements governing complaint handling (recognition, process, resolution, reporting, and prohibited practices) to a scenario.
Execution and market integrity (6%)
UMIR Best Execution and Abusive Trading
- Apply best execution concepts under UMIR to an order execution scenario with client constraints.
- Identify abusive trading activities under UMIR (manipulative/deceptive practices, artificial pricing, and improper orders/trades) and select an appropriate response.
- Identify front running in a scenario and determine the appropriate escalation or control response.
Gatekeeping Responsibilities and Escalation
- Explain the purpose of UMIR gatekeeping obligations for Investment Dealers and their representatives.
- Use knowledge of a client's typical financial activity and patterns to identify suspicious transactions and determine whether escalation is required.
- Determine escalation and reporting steps for suspicious transactions or possible insider trading, including considering whistleblower frameworks and firm/regulator reporting obligations.
Order Types and Short Sales
- Select an appropriate order type (limit, market, immediate-and-cancel, fill-or-kill, on-stop, iceberg) for a scenario based on execution priority and risk constraints.
- Explain how order types change execution certainty, price control, and market impact in a client scenario.
- Apply short sale concepts to a scenario, including identifying key risks and when specialized authorization or controls may be required.
Trade Execution, Settlement, and Cash Account Controls
- Describe the steps for placing orders and handling order errors or changes in a controlled and documented manner.
- Identify common types of Canadian marketplaces (e.g., exchanges and ATSs) and explain at a high level how venue choice can affect execution, liquidity, and reporting.
- Explain the settlement and delivery process for securities transactions (using the current settlement cycle) and apply it to a scenario.
- Apply foreign exchange transaction considerations and currency conversion needs to a scenario involving foreign securities.
- Explain the purpose and practical application of the cash account rule and apply it to a scenario involving payment, settlement, or trading restrictions.
- Apply the restriction process for overdue cash accounts to a scenario, including identifying an appropriate control action and documentation/escalation.
Margin Accounts and Client Reporting
- Explain the use of long and short margin accounts, including special margin situations and the need for specialized trading authorizations.
- Apply client reporting requirements to a scenario, including trade confirmations and account statements and disclosure of fees and commissions.
Monitoring, reporting and maintaining client relationships (6%)
- Apply the process of monitoring and evaluating portfolio performance with consideration of market/economic conditions and client circumstances.
- Determine whether a portfolio remains aligned with client needs and constraints and identify when follow-up or rebalancing may be warranted.
- Identify how changes in the market, economy, or client circumstances can drive monitoring priorities and communication needs.
- Document monitoring outcomes and any related client communications to maintain an appropriate audit trail.
- Explain how investment performance is measured and disclosed, including how comparative performance is determined.
- Select and apply appropriate benchmarks for assessing performance and recognize when benchmark use is misleading.
- Explain how transaction costs, taxes, fees, and charges affect client returns and should be considered when disclosing and interpreting performance.
- Explain the purpose of multi-factor regression in performance measurement and the types of conclusions it can (and cannot) support at a high level.
- Analyze return calculations for individual securities or portfolios over a specified timeframe and interpret the result.
- Interpret absolute risk and risk-adjusted return metrics (standard deviation, Sharpe, Treynor, Jensen) and apply them to a comparison scenario.
- Compare performance against benchmarks and identify plausible drivers of outperformance or underperformance at a high level.
Communications and Recordkeeping Requirements
- Apply CIRO requirements for communications with clients and the public, including appropriate professional titles, avoiding misleading communications, and social media/off-channel communication risks.
- Identify records that must be maintained related to account appropriateness, suitability, KYC, KYP, conflicts of interest, sales practices, and compensation arrangements.
- Analyze incentive practices and compensation arrangements that could create conflicts and determine the required documentation, controls, or escalation.
Sources: https://www.ciro.ca/registered-individuals/proficiency/exam-hub
and https://www.ciro.ca/registered-individuals/proficiency/exam-hub/retail-securities-exam