CPH Cheatsheet — High-Yield Rules, Workflows, Decision Tables & Glossary

Use this as your “what do I do next?” playbook for CPH scenarios. Pair it with the Syllabus for coverage and Practice for speed and judgment.

CPH in 60 seconds (what the exam rewards)

• Process > trivia: identify the issue, follow policy, escalate, document.
• KYC + suitability: always ask “is the recommendation suitable, and can I prove it?”
• Conflicts: disclose + mitigate + document (and get approval where required).
• Communications: fair, balanced, not misleading; no guarantees.
• Complaints / AML / MNPI: “stop → escalate → document” beats improvisation.

    flowchart TD
	  A["Scenario"] --> B["Get facts (KYC/KYP)"]
	  B --> C["Suitability + fair dealing"]
	  C --> D{"Conflict / Complaint / AML / MNPI?"}
	  D -->|Yes| E["Escalate + disclose + follow policy"]
	  D -->|No| F["Proceed with compliant action"]
	  E --> G["Document + retain records"]
	  F --> G
	  G --> H["Monitor / supervise"]

Official exam snapshot (CSI)

Official exam weightings (CSI)

CSI chapter map (curriculum)

These chapter titles and subtopics are from CSI’s CPH Curriculum page.

• Chapter 1 - Standards of Conduct and Ethics: Standards of Conduct and Ethics; Integrating Ethics with Industry Rules; Rules of Thumb to Guide the Conduct of Registered Representatives
• Chapter 2 - Ethical Decision Making: Overview of Ethics; Values/Ethics/Law; Value Awareness; Ethical Dilemmas; Ethical Decision Making
• Chapter 3 - The Canadian Regulatory Framework: General Principles; Key Government Players; Self-Regulatory Organization; Investor Protection Funds; Money Laundering and Terrorist Financing
• Chapter 4 - Working with Clients: Registration Requirements; Communication with the Public; Sales Literature guidelines; Dealing with Clients; Privacy and Cybersecurity
• Chapter 5 - Client Discovery and Account Opening: Opening Accounts; NAAF; Completing NAAF; Disclosures; Client Records
• Chapter 6 - Product Due Diligence, Recommendations, and Advice: Suitability; Product Due Diligence; New Issues and Prospectus Exemptions; Take-over Bids and Issuer Bids
• Chapter 7 - Trading, Settlement, and Prohibited Activities: How Securities Are Traded; Types of Orders; Sales and Trading Conduct; Prohibited Activities; Settlements/Transfers/Corrections
• Chapter 8 - Maintaining Client Accounts and Relationships: Accounting for Transactions; Margin Accounts; Cash Accounts; Communicating Trading Info; Client Complaints and Account Transfer Requests
• Chapter 9 - Putting it All Together: Review of Good Conduct and Practices; Case Study: The Chengs’ Accounts

Question cues → high-scoring moves

KYC + suitability (center of gravity)

KYC checklist (what to capture)

• Identity and authority (client, POA, corporate signing authority).
• Objectives: growth, income, capital preservation (be specific).
• Risk profile: willingness (tolerance) and ability (capacity).
• Time horizon: when funds are needed (short vs long).
• Liquidity needs: planned withdrawals, emergencies, known cash flows.
• Financial situation: net worth, income stability, debt load.
• Knowledge/experience: complexity the client can reasonably understand.
• Constraints: tax, legal, ethical restrictions, concentration, employer rules.

Suitability workflow (exam-friendly wording)

1. Confirm KYC is current and complete.
2. Understand the product/strategy (KYP).
3. Evaluate fit vs objectives, horizon, liquidity, risk capacity/tolerance.
4. Disclose key risks, costs, and trade-offs.
5. Document the rationale and client communications.
6. Monitor and update when circumstances change.

“Suitability refresh” triggers (memorize)

• Client’s goals, time horizon, liquidity, or income changes.
• Major life events (retirement, divorce, job change) or debt changes.
• Material market events that change risk/portfolio profile.
• New product or new strategy (especially complex/leverage).
• Ongoing monitoring indicates drift or concentration risk.

Suitability documentation mini-template

Write notes like a regulator will read them:

• Client need: what problem are we solving?
• KYC facts used: objectives, horizon, risk, liquidity, constraints.
• Product/strategy chosen: why it fits (and what alternatives were considered).
• Key risks disclosed: volatility, liquidity, credit, leverage, fees, tax impacts.
• Client confirmation: understanding + acceptance.
• Follow-up: review date / monitoring plan.

Know-your-product (KYP) — fast due diligence framing

When the question asks “what should the representative do?”, KYP is often the hidden answer.

New issues + prospectus exemptions (exam-level)

• Treat “new issue” conversations as high disclosure + high documentation scenarios.
• Know what the client is (and isn’t) buying: risks, liquidity, fees, and suitability fit.
• If eligibility/constraints matter (e.g., exempt distributions), the safe move is: verify requirements, escalate when unsure, document the basis.

Take-over bids + issuer bids (exam-level)

• These situations often test fair dealing, communications discipline, and following firm procedures.
• Focus on process: confirm what you can say, avoid speculation, and document client communications.
• When uncertain, the best answer is usually: pause → escalate (supervisor/compliance) → document.

Conflicts of interest — identify, disclose, mitigate, document

Common conflict patterns

Conflict checklist (do this every time)

• Identify who benefits and how.
• Determine whether it is avoidable, manageable, or prohibited per policy.
• Disclose before the client acts.
• Obtain approvals (supervisor/compliance) as required.
• Record disclosures, approvals, and the final outcome.

Client communications (email, ads, social, performance)

Safe principles

• Be fair, balanced, and not misleading.
• Avoid guarantees and promises about future performance.
• Present risks and limitations as clearly as benefits.
• Ensure required disclosures are clear and proximate (not hidden).
• Keep records of communications per policy.

Quick “allowed vs risky” table

What to say instead of a guarantee

• Replace “risk-free” with “lower risk relative to X, but still has Y risk”.
• Replace “will outperform” with “aims to achieve X objective, but outcomes vary”.

Privacy + cybersecurity (quick checklist)

• Verify client identity before discussing account details (especially for phone/email change requests).
• Share information on a need-to-know basis; avoid sending sensitive data over insecure channels.
• Treat “urgent” requests, new payee instructions, and credential resets as red flags: pause → verify → escalate.
• Don’t click unknown links or open unexpected attachments; report suspected phishing per firm process.
• Document and escalate suspected privacy/cyber incidents quickly (policy-driven timelines often matter).

Orders, trading, and best execution (scenario mechanics)

Order handling checklist

• Confirm the order is authorized (client or properly delegated authority).
• Confirm the order aligns with KYC/suitability (especially complex/high-risk).
• Capture instructions precisely (price, quantity, time-in-force, special terms).
• Route and execute consistent with best execution and firm policy.
• Document discussions and trade rationale when relevant.

Order types (exam-level)

Trade errors (what to do first)

1. Escalate immediately (supervisor/compliance/trade desk).
2. Correct per firm policy (don’t “quietly fix it”).
3. Document what happened, impact, and remediation.

Complaints — the lifecycle the exam expects

First actions (seconds matter)

• Stay calm; acknowledge receipt.
• Do not admit fault or offer unauthorized compensation.
• Document: who, what, when, desired remedy.
• Escalate to the right channel (supervision/compliance/complaints team).

Complaint handling table

Maintaining client accounts (Chapter 8 essentials)

Margin vs cash (exam-level)

• Margin accounts involve borrowing/leverage → higher suitability, disclosure, and supervision expectations.
• Margin deficiency / margin call scenarios are process questions: follow procedure, escalate appropriately, document.
• Cash accounts still require clear authorization, suitability thinking, and accurate confirmations/statements.

Statements, confirmations, and client communications

• Ensure trading information to customers is accurate and timely (confirmations, statements, corrections).
• When something is wrong: escalate → correct per policy → document.

Account transfer requests (what the exam wants)

• Verify identity/authorization and follow the firm’s controlled transfer process.
• Document the request, timelines, and client communications.
• Escalate when there are holds, disputes, or suspicious activity signals.

AML / sanctions — “escalate + document + don’t tip off”

Core AML mindset

• Does the activity make sense given the client’s profile and source of funds?
• Is there avoidance behaviour (structuring, reluctance to provide info)?
• Are there high-risk indicators (complex ownership, high-risk jurisdictions)?

Common red flags (exam-safe)

• Unusual deposits/withdrawals inconsistent with stated employment/income.
• Rapid in/out transfers with no clear purpose.
• Third-party transfers without a clear relationship.
• Reluctance to provide identification or beneficial ownership details.
• Use of multiple accounts to avoid reporting/controls.

What to do (in the answer choices)

1. Escalate to AML/compliance officer per policy.
2. Increase monitoring and recordkeeping.
3. File required reports (handled through the firm’s process).
4. Avoid “tipping off” the client about investigations/reports.

Market integrity: MNPI, manipulation, and client-first behaviour

MNPI quick response

• Stop: don’t recommend/solicit trades using the information.
• Escalate: compliance/supervision.
• Restrict: information barriers / watch/restricted list as applicable.
• Document: what was learned and actions taken.

Prohibited conduct patterns (conceptual)

Supervision and recordkeeping — compliance is an “audit trail”

Records the exam expects you to care about

• KYC updates and suitability rationale.
• Disclosures: conflicts, risks, fees, limitations.
• Trade tickets, order instructions, time stamps (as applicable).
• Client communications (email, messages, approved marketing).
• Complaint file: intake, investigation steps, response.
• AML escalation notes and monitoring actions.

Supervision cues

• High-risk products/clients → higher supervision and documentation.
• New representatives / new strategies → closer monitoring.
• Repeated errors/complaints → escalate for corrective action.

Math corner (light, but worth memorizing)

Returns

Total return \[ TR=\frac{V_1-V_0+I}{V_0} \]

What it tells you: Total return over a period = change in value plus income, relative to the starting value.

Symbols (what they mean):

• \(V_0\): starting value.
• \(V_1\): ending value.
• \(I\): income received during the period (interest/dividends/distributions).
• \(TR\): total return for the period.

How it’s tested (CPH style):

• Compute whether performance is positive/negative after including income.
• Identify the correct denominator (start-of-period value) in a return calculation.

Common pitfalls:

• Forgetting to include income \(I\).
• Dividing by \(V_1\) instead of \(V_0\).

Annualized return (if you need it) \[ R_{\text{ann}}=(1+TR)^{1/n}-1 \]

What it tells you: The constant annual compound rate that would produce the same total return over \(n\) years.

Symbols (what they mean):

• \(TR\): total return over the whole period.
• \(n\): number of years (or periods matching your return measurement).
• \(R_{\text{ann}}\): annualized (compound) return.

How it’s tested:

• Convert a multi-year return into an annual rate for comparison.

Common pitfalls:

• Using a simple average (\(TR/n\)) instead of compound annualization.
• Mixing period units (months vs years) without converting \(n\).

Real return (approx) \[ R_{\text{real}}\approx R_{\text{nominal}}-\pi \]

What it tells you: The approximate return after inflation (purchasing-power return).

Symbols (what they mean):

• \(R_{\text{nominal}}\): nominal return (not inflation-adjusted).
• \(\pi\): inflation rate.
• \(R_{\text{real}}\): real return (approx).

Exam note: This is an approximation; the exact relationship is \(1+r_{real}=\frac{1+r_{nom}}{1+\pi}\).

Trading math

Markup / markdown (percent) \[ %\text{Markup}=\frac{\text{Sell price}-\text{Cost}}{\text{Cost}} \] \[ %\text{Markdown}=\frac{\text{Cost}-\text{Buy price}}{\text{Cost}} \]

What it tells you: The dealer’s compensation (as a percent of dealer cost) when selling to or buying from a client.

Symbols (what they mean):

• Cost: dealer’s cost (inventory cost / acquisition cost).
• Sell price: what the client pays.
• Buy price: what the client receives when selling to the dealer.

How it’s tested:

• Identify whether a situation is a markup (dealer sells to client) vs markdown (dealer buys from client).
• Compute the percent spread using the correct base.

Common pitfalls:

• Using sell price in the denominator when the formula defines the base as cost.
• Mixing up which direction is markup vs markdown.

Current yield (bond) \[ CY=\frac{\text{Annual coupon}}{\text{Market price}} \]

What it tells you: A bond’s income yield today (coupon income divided by current price), ignoring capital gains/losses.

What it is NOT: Current yield is not YTM; it does not capture price pull-to-par or reinvestment assumptions.

How it’s tested:

• Compare two bonds’ income yield when prices differ.
• Identify “coupon / price” as the correct quick yield for income questions.

Glossary (CPH terminology)

Accredited investor — Investor meeting specific criteria that may allow access to certain products (policy-driven suitability considerations still apply).
Acknowledgement — Confirming receipt/understanding of a disclosure or document (often part of recordkeeping).
Advertising — Promotional communications subject to firm approval and record retention.
AML/ATF — Anti-money laundering / anti-terrorist financing program duties (monitoring, escalation, reporting via policy).
Approved person / registrant — Individual registered to perform regulated activities under firm supervision.
Assignment — (Options) Writer obligation triggered when holder exercises; relevant when discussing leveraged/high-risk products.
Authority to trade — The legal/contractual permission to place trades (client, POA, managed account agreement).
Beneficial owner — Natural person(s) who ultimately own/control an entity; key AML concept.
Best execution — Duty to seek the best overall terms reasonably available, consistent with policy and market conditions.
Branch supervision — Oversight controls (pre-trade/post-trade reviews, approvals, monitoring) to ensure compliant activity.
Capital preservation — Objective emphasizing low loss probability, often implying lower volatility/liquidity risk.
Churning — Excessive trading primarily to generate commissions, inconsistent with client interests.
Client-first / fair dealing — Principle that client interests and fair outcomes matter in recommendations and disclosures.
Complaint — Expression of dissatisfaction about products/services/representations requiring intake, documentation, and escalation.
Compliance — Framework of policies, monitoring, and controls that enforce rules and ethical standards.
Conflict of interest — Situation where personal/firm incentives could impair objectivity; requires mitigation/disclosure.
Connected issuer — Issuer with a meaningful relationship to the dealer/firm (heightened conflict/disclosure considerations).
Concentration risk — Overexposure to one security/sector/issuer causing disproportionate loss potential.
Consent — Client agreement/authorization; in exam answers, “informed consent + documentation” matters.
Discretionary trading — Trading without prior client approval for each order; requires strict agreements/approvals.
Disclosure — Clear communication of risks, costs, conflicts, and limitations, provided in time for the client to act.
Documentation — Written records supporting KYC, suitability, disclosures, client instructions, and outcomes.
Dual employment / OBA — Outside business activity requiring firm disclosure and supervision controls.
Escalation — Bringing an issue to supervision/compliance per policy (complaints, AML, conflicts, MNPI, errors).
Exempt product — Product with different distribution rules; suitability and KYC still apply.
Fair presentation — Communications that do not mislead by omission or selective emphasis.
Front-running — Trading ahead of a client/firm order to benefit from expected price movement.
Gifts and entertainment — Items of value that can create conflicts; subject to limits, approval, and recordkeeping.
Identity verification — Confirming who the client is; foundational AML requirement.
Inside information / MNPI — Material non-public information; do not trade or advise based on it; escalate.
KYC (Know Your Client) — Client profile used for suitability: objectives, risk, horizon, liquidity, constraints, identity.
KYP (Know Your Product) — Understanding product features, risks, costs, liquidity, and suitability fit.
Limit order — Order to trade at a specified price or better; controls price but risks non-execution.
Liquidity — Ability to access cash quickly without large price concessions or penalties.
Maintenance margin — Minimum margin level before a margin call; leverage risk concept.
Managed account — Account where an authorized portfolio manager makes discretionary decisions under mandate.
Market manipulation — Conduct intended to mislead market participants (false liquidity, artificial prices).
Market order — Order to execute immediately at best available price; price uncertainty trade-off.
Market integrity — Maintaining fair and orderly markets; avoiding manipulative or deceptive practices.
Misrepresentation — False or misleading statements/omissions; communications must be accurate and balanced.
Monitoring — Ongoing review of suitability and account activity; update KYC as needed.
Outside business activity (OBA) — Non-firm business or employment; requires disclosure, approvals, monitoring.
Personal trading policy — Firm rules governing employee trading to prevent conflicts and front-running.
Power of attorney (POA) — Legal authority to act for a client; must be verified and recorded.
Product suitability — Fit of the product to client needs and constraints; part of overall suitability.
Prohibited conduct — Activities disallowed by regulation/policy (insider trading, manipulation, unauthorized trades).
Recommendation — Advice to act; triggers suitability expectations and documentation requirements.
Record retention — Keeping required records for required timeframes; governed by regulation and firm policy.
Referral arrangement — Compensation for referring clients; requires disclosure and oversight.
Restricted list — List of securities with trading/solicitation restrictions due to MNPI/conflict concerns.
Risk capacity — Financial ability to bear losses (cash flow, horizon, net worth).
Risk tolerance — Emotional willingness to experience volatility and loss.
Sales practice — How recommendations and communications are conducted; must be ethical and compliant.
Sanctions — Restrictions on dealing with certain persons/entities/jurisdictions; escalated via compliance.
Source of funds — Where the money comes from; important AML and suitability context.
Stop order — Trigger-based order; execution price can vary after trigger due to gaps.
Suitability — Matching recommendations to the client’s profile and constraints, with documentation.
Supervision — Oversight ensuring activities are compliant and appropriately controlled.
Trade error — Incorrect trade or allocation; must be escalated and corrected transparently.
Trailer fee — Ongoing compensation embedded in some fund series; conflict/cost disclosure relevance.
Unauthorized trading — Trading without client consent/authority; major compliance breach requiring escalation.
Watch list — Monitoring list for heightened review (often prior to restricted list); compliance tool.

Always defer to your firm’s policies and current CSI/CIRO guidance for exact procedures and definitions; the exam typically rewards the safest compliant action with clear documentation.

Sources: https://www.csi.ca/en/learning/courses/cph/curriculum and https://www.csi.ca/en/learning/courses/cph/exam-credits