Before starting Element 1, learn these basic terms. You will see them throughout the exam notes.

 

📈 Markets & Investments Terms:

• Securities → Investments or financial instruments, such as stocks and bonds, that can be bought or sold.

• Capital Market → The financial marketplace where companies and governments raise money and investors buy and sell investments.

• Canadian Securities Market → Canada’s system of markets, firms, investors, and regulators involved in issuing and trading investments.

• Equity Market → The market where investors buy and sell ownership shares (stocks) of companies.

• Debt Market → The market where investors buy and sell debt investments, such as government and corporate bonds.

• Market Volatility → How much and how quickly investment prices move up and down.

 

🏛️ Regulation & Investor Protection Terms:

• Securities Regulation → The laws and rules governing how investments are issued, sold, traded, and handled.

• Securities Regulator → A government authority responsible for administering and enforcing investment-related laws and protecting investors.

• Market Integrity → Making sure markets are fair, transparent, and free from manipulation and unfair trading.

• Confidence in the Market → Investors’ trust that financial markets are fair, reliable, and properly regulated.

• Enforcement → Investigating possible violations and taking action against people or firms that break the rules.

• Dealer Conduct → Rules and standards governing how dealers and representatives must behave when dealing with clients.

• Gatekeeping → The responsibility to identify and stop improper or harmful activities before they harm investors or markets.

• Mandate → The main purpose and responsibilities of an organization.

 

🏢 Dealers & Investment Professionals Terms:

• Investment Dealer → A firm that can buy and sell investments for clients and provide other investment services.

• Mutual Fund Dealer → A firm authorized to sell mutual funds and provide related services to clients.

• Registered Representative (RR) → A registered investment professional who can provide investment services and recommendations within their permitted activities.

• Compliance Officer → A person who helps ensure the firm follows laws, regulatory rules, and internal policies.

• Due Diligence → Taking reasonable steps to investigate, verify, and understand something before making a decision or taking action.

 

🏭 Issuers & Raising Money Terms:

• Security Issuer → A company, government, or organization that issues investments to raise money.

• Security Distribution → The process of selling newly issued securities to investors.

• Public Offering → When securities are offered for sale to the public to raise money.

• Prospectus → A document that provides investors with important information about an investment and its issuer before securities are offered to the public.

• Disclosure → Providing important information investors or clients need to make informed decisions.

 

🏦 Financial Strength & Stability Terms:

• Prudential Soundness → Making sure a financial institution has enough financial resources and proper controls to operate safely.

• Capital → Financial resources a firm maintains to support operations and absorb potential losses.

• Liquidity → The ability to have or obtain enough cash to meet obligations when they are due.

• Bank Soundness → A bank’s ability to remain financially stable and operate safely.