What is the consequence of failing to provide a client with the Fund Facts document before or at the time of purchase?

Question: What is the consequence of failing to provide a client with the Fund Facts document before or at the time of purchase?

Answer options:

• The client receives a discount on their purchase.
• The representative must pay a fine to the regulator. ✅ The client has the right to cancel the transaction within two business days.
• The fund company is required to automatically redeem the units.

Correct answer: The client has the right to cancel the transaction within two business days.

Explanation: As per Canadian securities regulations, if a Fund Facts document is not delivered to the client before or at the time of purchase, the client has the right to cancel the purchase within two business days of receiving the confirmation of purchase. This is an important investor protection measure.