Chartered Investment Manager (CIM) Practice Exam · Question
A Canadian CIM professional must adhere to the 'Know Your Client' (KYC) rule. What is its fundamental purpose?
The KYC rule is a cornerstone of regulatory compliance and fiduciary duty. It requires investment professionals to collect and maintain detailed information abo
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Question: A Canadian CIM professional must adhere to the 'Know Your Client' (KYC) rule. What is its fundamental purpose?
Answer options:
- To ensure the firm exclusively offers proprietary investment products. ✅ To gather enough information about the client to ensure investment recommendations and the portfolio are suitable.
- To identify the client's social media presence and online activity.
- To obtain the client's detailed tax history from the CRA.
Correct answer: To gather enough information about the client to ensure investment recommendations and the portfolio are suitable.
Explanation: The KYC rule is a cornerstone of regulatory compliance and fiduciary duty. It requires investment professionals to collect and maintain detailed information about their clients (financial situation, investment knowledge, risk tolerance, goals, etc.) to ensure the suitability of all investment advice and products.
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