Exam CIFC Topic 1 Question 46 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 46
Topic #: 1

Sagira is a Compliance Officer with WealthPath Investments Inc., a registered mutual fund dealer. Sagira routinely answers inquiries from the firm's Dealing Representatives and offers guidance.
Which of the following statements would Sagira likely agree is a permitted activity for Dealing Representatives to have with clients?

A. Positions of influence are permitted if the terms and conditions of the regulator are met and the activity is approved by the dealer. B. Borrowing from clients is prohibited, but personal loans to clients may be offered. C. Purchasing real property from clients is permitted if there is a written agreement in place and the firm is party to the agreement. D. Authority granted to a Dealing Representative over a client's account or finances must be documented under a Power of Attorney.

Suggested Answer: A Vote an answer

Explanation
A position of influence is an outside activity that places the Dealing Representative in a position of power or influence over a client or potential client, such as a trustee, executor, or director of a charitable organization. A position of influence may create a conflict of interest or a potential conflict of interest between the Dealing Representative and the client. Therefore, the MFDA rules require that a Dealing Representative must report any position of influence to the dealer and obtain the dealer's approval before engaging in such activity. The dealer must also ensure that the position of influence does not impair the Dealing Representative's ability to act in the best interests of the client and that the client is aware of the nature and extent of the position of influence12 References = Canadian Investment Funds Course (CIFC) - Module 1: The Financial Services Industry - Section 1.3: Know Your Client (KYC)3 and web search results from search_web(query="positions of influence and mutual fund dealers association rules")12
3: https://www.ifse.ca/wp-content/uploads/2021/08/CIFC-Module-1.pdf

by Monica at Jan 25, 2024, 05:42 PM

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