Canadian Securities Course (CSC) Practice Exam · Question
In Canada, what is the 'Know Your Client' (KYC) rule primarily designed to achieve?
The KYC rule requires registrants to collect comprehensive information about their clients to ensure recommendations are suitable for their financial situation,
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Question: In Canada, what is the 'Know Your Client' (KYC) rule primarily designed to achieve?
Answer options:
- To guarantee client returns.
- To ensure all clients are wealthy. ✅ To gather information necessary to assess suitability and prevent illicit activities.
- To limit the number of trades a client can make.
Correct answer: To gather information necessary to assess suitability and prevent illicit activities.
Explanation: The KYC rule requires registrants to collect comprehensive information about their clients to ensure recommendations are suitable for their financial situation, investment objectives, and risk tolerance, and to assist in detecting suspicious activities.
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