IFIC Mutual Funds Licensing Practice Exam · Question
Effective June 1, 2022, which of the following statements regarding Deferred Sales Charge (DSC) options for mutual funds is accurate under CIRO MFD rules?
Effective June 1, 2022, new purchases into mutual funds with DSC or other upfront sales charge options that would result in a sales charge schedule are prohibit
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Question: Effective June 1, 2022, which of the following statements regarding Deferred Sales Charge (DSC) options for mutual funds is accurate under CIRO MFD rules?
Answer options:
- DSC purchase options are prohibited for all mutual funds in Canada.
- DSC purchase options are permitted for systematic investment plans only. ✅ Existing DSC contracts can continue until fully redeemed or switched, but new purchases into DSC options are prohibited.
- DSC options are permitted for investors with investment timelines exceeding 10 years.
Correct answer: Existing DSC contracts can continue until fully redeemed or switched, but new purchases into DSC options are prohibited.
Explanation: Effective June 1, 2022, new purchases into mutual funds with DSC or other upfront sales charge options that would result in a sales charge schedule are prohibited. However, CIRO MFD rules allow existing DSC contracts to be serviced until they are fully redeemed, switched, or the applicable redemption fee schedule expires.
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