CSC Chapter 1: The Canadian Securities Industry

principal

The person for whom a broker executes an order, or a dealer buying or selling for its own account. May also refer to a person’s capital or to the face amount of a bond.

fintech

Financial technology companies that take advantage of computer technology to support or enable a variety of financial products and services.

agent

The role of an investment dealer when it acts on behalf of a buyer or a seller of a security and does not itself own title to the securities at any time during the transaction.

investment dealer

A company that acts as an intermediary by matching investors with the users of capital.

clearing

The process of confirming and matching security trade details.

mutual fund

Investment fund using proceeds from shares and units sold to investors to invest in financial securities, redeemable on demand from the fund at the current net asset value per share.

schedule III bank

A type of bank that is federally regulated and is a foreign bank branch of a foreign institution

settlement

The irrevocable moment when cash and securities are exchanged.

firewall

Policies intended to separate and isolate investment decision-making persons in a firm from others in the firm who have undisclosed material information that could influence those decisions.

discount broker or self-directed broker

Brokerage house that buys and sells securities for clients at a greater commission discount than full-service firms.

closed-end fund

Shares in this investment fund type are readily transferable in the open market and are bought and sold like other shares. Capitalization is fixed.

integrated firm

A type of firm that offers products and services across the financial industry and participates fully in both the retail and institutional markets.

schedule I bank

Type of bank that is Canadian-owned and regulated by the Bank Act.

schedule II bank

Type of bank that is incorporated and operates in Canada as a federally regulated foreign bank subsidiary.

pension fund

A type of fund that manages a pool of assets with the goal of supplying its beneficiaries with income during their retirement years.

sales finance company

A type of financial intermediary that purchases instalment sales contracts from retailers and dealers at a discount.

CDS Clearing and Depository Services Inc.

Provides electronic clearing services; physical and electronic facilities to deposit and withdraw depository-eligible securities; management of related ledger positions.

robo-advisor

An online investment service that provides clients with automated investment advice.