CIRO CCO case studies
CIRO CCO · Put your knowledge to work in context.
The CIRO Chief Compliance Officer Exam is the proficiency examination that individuals must pass to be qualified as a chief compliance officer at a dealer member regulated by the Canadian Investment Regulatory Organization (CIRO). It is intended for senior compliance professionals who will carry responsibility for a firm's compliance and supervision program, rather than for entry-level registrants. The CIRO CCO case studies are 5 cases and about 3,062 words.
1The Suitability File That Doesn't Add Up
A registered representative at a mid-sized dealer has recommended a leveraged ETF strategy to a 71-year-old client whose account file lists annual income of 38,000 (mostly pension and CPP), investable assets of 210,000, and a stated objective of 'income with capital preservation.' The client signed a new account application 14 months ago. The rep's notes describe the client as 'sophisticated, wants growth.' Over the last six months the account has traded 41 times, generating 9,400 in commissions against a portfolio that has fallen from 210,000 to $176,000.
645 words, about 3 min2The Capital Shortfall Nobody Reported
A dealer member's CFO prepares the monthly financial report. Risk-adjusted capital has fallen to 5.8% of the minimum required, down from 8.2% two months earlier, driven by an unhedged equity position in a proprietary trading book and a $4.2M receivable from an affiliate that is now 95 days past due.
554 words, about 3 min3The Client Who Wants to Trade on a Rumor
An institutional sales trader at a dealer receives a call from a hedge fund client who says a contact at a mid-cap issuer told him the company will announce a takeover bid for a smaller competitor 'within two weeks.' The client wants to buy call options on the target and asks the sales trader to 'keep it quiet.' The sales trader has no relationship with the issuer and did not solicit the information. The target is thinly traded; the options are illiquid.
567 words, about 3 min4The Complaint That Should Have Been Reported
A dealer member receives a written complaint from a client alleging that a representative made unauthorized trades in her RRSP over an 11-month period, totaling roughly $85,000 in principal. The branch manager investigates, concludes the client 'probably authorized the trades verbally,' and closes the complaint with a letter to the client.
523 words, about 3 min5The New Product That Skipped the Gate
A dealer member launches a structured note linked to a volatility index, marketed to retail clients with a minimum investment of 10,000. The product was designed by the dealer's structured products desk.
773 words, about 4 min