Canadian securities and mutual fund regulator represented by IIROC & MFDA regulations cover extensively scenario one and three. Below is a matrix of all possible scenarios with suitability and solicitation considerations possible between an agent and a client. The matrix below assumes the following
Note: This matrix assumes/consider
• new accounts only not transferred accounts
• that the dealer has the caapcity to assess unlimited range of products suitability
• the account in this case is not discretionary or managed account
• order/recommendation pertains mutual fund products or products supervised by MFDA
SUITABILITY: SCENARIOS THREE & FOUR
The SROs require that dealer members and IAs: learn basic facts associated with every order/account accepted to fulfill KYC rule, ensure any order accepted is bounded by good business practices, and ensure that any recommendation made are suitable for clients.
Suitability
It is important to emphasize that suitability determination is screening filter number one for accepting order/recommendations whether this order/reccommendation is originate at the agent or the client. At the initial account openning the completion of New Account Application Form (NAAF) with a degree of accurateness and ensuring there are no discrepancies with KYC form is crucial prior to the acceptance of any order.
SCENARIOS THREE-Solicited/Unsuitable: Registrants & Standards of Conduct
Agents registered to sell securities and mutual funds i.e. registrants must adhere to Canadian securities code of conduct. Under Standard A-D Duty of Care, which includes knowing your client and performing due diligence, unsolicited orders is assigned added level of attention. It is important to recognize that exercizing duty o...
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...ompliant with KYP rules. A record of communication between agent/client has to be maintained. Last but not least, since the investment decision is made outside of the agent/client relationship, an assessment of this business relationship maybe in due action. In addition, if a pattern of suitable/unsolicited transactions is apparent, an agent has to emphasize that other levels of service available that are available to the client that may serve them better.
Works Cited
Fisher, Colin and Lovell, Alan. Business Ethics & Values: Individual, Corporate, and International perspectives. 3rd Edition. Prentice Hall. England. 2009. p.p. 335
Chapters 8, 18, & 26.Canadian Securities Course. CSI GLOBAL EDUCATION INC. 2013
MFDA Staff Notice #0069: Suitability. Created Apr.2008. Revised Feb. 2013
MFDA Staff Notice #0025: Suitability Obligations for Unsolicited Orders. Feb. 2004
Electronic confirmations are often used to verify bank balances, but they can also assist in the verification of a company’s vendors. Therefore, I am going to request confirmations from Wayland Manufacturing Company’s vendors after the client accepts my request. The electronic confirmations will prove each vendor’s existence as well as the accuracy of the accounts payable subsidiary ledger balances. Evidence collected from third-party sources must remain confidential and I maintain my integrity by only seeking evidence I am authorized to review. If I decide to request Cash electronic confirmations without consent, I am violating integrity, confidentiality, and professional due care (AU Section 330-The Confirmation Process 1998) (Arens, Elder, & Borsum 2013) (AICPA Code of Professional Conduct
This structure was beneficial for the decision-making and profit generation for the clients and gave incentive to the fund manager to get a good investment performance. If clients were solely focused on investment performance and the entire peer group also kept to adopt the traditional model, this approach proved effective to business growth.
CRD- We should also provide the CRD to the client prior to verification for legal and compliance reasons.
Vanguard Case Analysis After reading through the Vanguard case, there were a few difficult forks in the road that Vanguard seems to be facing. The company’s future can be greatly affected by some of these difficult choices. Vanguard has to decide whether to change their investment offerings, further develop Internationally, or to simply advertise to increase their client base. Top managers at Vanguard have to step up to the plate and rollout detailed plans as to what path the company should take regarding some of these issues. Through our in-class discussions, the majority of the students argued on one major problem that Vanguard was facing.
Cohen, S., Grace, D. (2010). Business ethics: Canadian edition. Don Mills, Ontario: Oxford University Press.
Trevino, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right. New York: John Wiley.
The five forces entail the threat of substitutes, the supplier power, and the threat of new entrants, the buyer power, and the existing competitors. The first force introduced in this paper is the threat of substitutes. This market force has a huge leverage in the market. One the primary drivers of this market force is Non-Profit Organizations or other organizations that will not charge upfront costs to accommodate clients. For example, some Realtors have attempted to imitate the Foreclosure Defense procedures by helping clients negotiate a loan modification for free and if the client is not satisfied with the modification agreement they offer to short sale the property. Opportunely, for our company, we have more resources than Non-Profit Organizations and the more capable then other real estate office. We serve our client’s best interest and do not mislead the clients with creating false hopes. In addition, one particular advantage T&A has been able to offer their resources and time to help those...
The main purpose of the Trust Capital Securities is to provide the Bank of Montreal with a cost effective means of raising capital for Canadian bank regulatory purposes. The Bank of Montreal performs as an administrative agent in the BMO Capital Trust. The Bank issued an initial public offering of $450,000,000 of trust subordinated notes all over Canada on December 18, 2008 and may also issue further series of trust
Trevino, L., & Nelson, K. (2011). Managing business ethics - straight talk about how to
Seawell, Buie 2010, ‘The Content and Practice of Business Ethics’, Good Business, pp. 2-18, viewed 22 October 2013, .
Ross, S.A., Westerfield, R.W., Jaffe, J. and Jordan, B.D., 2008. Modern Financial Management: International Student Edition. 8th Edition. New York: McGraw-Hill Companies.
William Sharpe, Gordon J. Alexander, Jeffrey W Bailey. Investments. Prentice Hall; 6 edition, October 20, 1998
In 1934 the Securities Exchange Act created the SEC (Securities and Exchange Commission) in response to the stock market crash of 1929 and the Great Depression of the 1930s. It was created to protect U.S. investors against malpractice in securities and financial markets. The purpose of the SEC was and still is to carry out the mandates of the Securities Act of 1933: To protect investors and maintain the integrity of the securities market by amending the current laws, creating new laws and seeing to it that those laws are enforced.
The Bank of Canada is Canada’s central bank, whose current Governor is Mike Carney. It was founded in 1934 by the Bank of Canada Act of the same year. The country’s banking system was quite stable even before the Bank of Canada was established, mainly thanks to its branch banking structure, and showed little interest in central banking in the early 1900s. In addition, the banking system was somewhat being regulated by the Canadians Bankers’ Association. However, as the Great Depression took Canada by storm, talks about its then financial state were brewing. Some even questioned the country’s ability to meet larger demands. The central bank was formed from the Act in 1934, and starting running in 1935, but as a privately owned institution. Then, when William Mackenzie King was re-elected as Prime Minister after a full term by Richard Bennet, the new government made an amendment to the Bank of Canada Act, making the bank publicly owned by 1938, as it is today (Bank of Canada: History). Its primary objective was to be able to support financial and economic wellbeing of our country (Go Currency: Bank of Canada). In that way, it has many roles and functions as a central bank, which I will expand in the coming paragraphs.
Treviño, L. K., & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right Fourth ed., Retrieved on July 30, 2010 from www.ecampus.phoenix.edu