Canadian Securities Course (CSC) Practice Exam · Question
Which of the following is the primary purpose of the 'Know Your Client' (KYC) rule?
The KYC rule's primary purpose is to gather information about the client's financial situation, investment objectives, and risk tolerance to ensure that all rec
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Question: Which of the following is the primary purpose of the 'Know Your Client' (KYC) rule?
Answer options: ✅ To ensure that investments recommended are suitable for the client.
- To maximize the investment dealer's commission revenue.
- To verify the client's identity for anti-money laundering purposes only.
- To limit the client's exposure to high-risk investments.
Correct answer: To ensure that investments recommended are suitable for the client.
Explanation: The KYC rule's primary purpose is to gather information about the client's financial situation, investment objectives, and risk tolerance to ensure that all recommendations are suitable for them.
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