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Investment Funds in Canada (IFC) Exam Questions and Answers

Question 81

What is the first step before becoming eligible for registration as a mutual fund dealing representative?

Options:

File a registration application through the dealer.

Complete the 90-day training program.

Pass the proficiency examination.

Pay the registration fee with the applicable securities administrator.

Question 82

What is the current yield on a $5,000 Government of Canada bond paying a 6% coupon and trading at a price of $102 (rounding to the nearest hundredth)?

Options:

5.88%

4.90%

6.12%

6.00%

Question 83

Jenny contributed $5,000 each year for five years to a spousal RRSP in Albert ' s name. In the sixth calendar year, Jenny did not contribute and Albert withdrew all the funds from the spousal RRSP. What are the tax implications of the withdrawal for Albert and Jenny?

Options:

No effect on Jenny ' s taxable income and Albert includes $25,000 plus income earned in the plan in his taxable income.

Albert includes $10,000 in his taxable income and Jenny includes $15,000 plus income earned in the plan in her taxable income.

Jenny includes $25,000 in her taxable income and Albert includes income earned in the plan in his taxable income.

Jenny includes $10,000 in her taxable income and Albert includes $15,000 plus income earned in the plan in his taxable income.

Question 84

Maalik opens an account for a new client, John. During the new account process, Maalik determines that he will need to confirm John’s identity. Which of the following statements about Maalik’s identification requirements is CORRECT?

Options:

If Maalik determines that there is anything suspicious about John’s transaction, he is required to report the matter to his dealer. The dealer must report the matter to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

If Maalik learns that John is the president of a state-owned company, Maalik is required to report John as a Politically Exposed Foreign Person (PEFP) to his dealer. If John is not a US person, the dealer must report the account to the Internal Revenue Service (IRS).

If John wants to make a large cash deposit of $10,000 or more, Maalik is required to collect personal information about John and report it to his dealer. The dealer must report the information to the Canada Revenue Agency (CRA).

If John attempts to make a suspicious deposit, Maalik is required to report the attempt to his dealer. The dealer must keep records of attempted suspicious transactions that are not reported to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Answer:

Explanation:

The statement that is correct about Maalik’s identification requirements is option A. According to Section 7 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), registered firms and individuals must report any suspicious transactions or attempted transactions to FINTRAC, which is Canada’s financial intelligence unit that collects, analyzes, and discloses information related to money laundering and terrorist financing activities. A suspicious transaction or attempted transaction is one that there are reasonable grounds to suspect that it is related to a money laundering or terrorist financing offence. Therefore, if Maalik determines that there is anything suspicious about John’s transaction, he must report the matter to his dealer, who must report it to FINTRAC within 30 days of making the determination. The other statements are not correct about Maalik’s identification requirements. Option B is false because Maalik does not need to report John as a PEFP to his dealer; rather, he must take reasonable measures to determine whether John is a PEFP or a family member or close associate of a PEFP, and if so, he must obtain senior management approval before opening an account for John, take enhanced measures to verify John’s identity, and conduct enhanced ongoing monitoring of John’s account activity. Option C is false because Maalik does not need to collect personal information about John and report it to his dealer if John wants to make a large cash deposit; rather, he must verify John’s identity using an original, valid, and current document or information from a reliable source, keep a record of John’s name and address and the date and amount of the deposit, and report any large cash transactions of $10,000 or more in Canadian currency or its equivalent to FINTRAC within 15 days of receiving the cash. Option D is false because Maalik does not need to report the attempt to his dealer if John attempts to make a suspicious deposit; rather, he must report the attempt directly to FINTRAC within 30 days of detecting the suspicion, regardless of whether the transaction was completed or not. References: [FINTRAC - Home], [FINTRAC - Reporting] , [FINTRAC - Guideline 2: Suspicious Transactions], [FINTRAC - Guideline 6A: Record Keeping and Client Identification for Financial Entities]

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Investment Funds in Canada (IFC) Exam Questions and Answers

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