Canadian Securities Course (CSC) Practice Exam · Question
What is the primary objective of the Know Your Client (KYC) rule?
The Know Your Client (KYC) rule requires investment advisors to gather comprehensive information about their clients to ensure that all investment recommendatio
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Question: What is the primary objective of the Know Your Client (KYC) rule?
Answer options:
- To ensure all clients are able to purchase any investment product offered by the dealer. ✅ To gather enough information about a client to make suitable investment recommendations.
- To streamline the account opening process for new clients.
- To collect personal data for marketing purposes.
Correct answer: To gather enough information about a client to make suitable investment recommendations.
Explanation: The Know Your Client (KYC) rule requires investment advisors to gather comprehensive information about their clients to ensure that all investment recommendations are suitable for the client's financial situation, investment objectives, and risk tolerance.
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