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Your mutual funds licence is the first step to trading mutual funds in Canada as regulated by Canadian laws. Read this blog article to find out how to begin your journey into getting your mutual funds licence.
In assets and investments, having a mutual funds licence is the key to engaging with firms and individuals. A mutual funds licence allows you to provide advice to firms, businesses, financial institutions, individuals, or any external party, as well as to sell mutual fund investments. This process is subject to heavy regulation. Mutual fund dealers and advisors, as registered representatives, are regulated by the Mutual Fund Dealers Association. Your mutual funds licence is the gateway to specialization in mutual funds and your success as a mutual fund dealer.
The mutual funds licence is vital to proving that every mutual fund dealer in Canada has the necessary educational background. The licence is the ticket to conducting mutual funds activities, as this industry is heavily regulated. A mutual funds licence involves a thorough process to determine if you meet the necessary educational requirements before approval is granted. Mutual fund dealers may also be tested on their ethical and work experience by the institution sponsoring their application.
Once you obtain your mutual funds licence, you are only permitted to engage in mutual funds related business. This is an exclusive licence.
Mutual fund dealers must undergo a process to get a licence that includes completing one of two proficiency courses, a written exam, and their application must be sponsored by a bank or mutual fund dealership after passing the test.
Here is the procedure:
All mutual fund dealers must complete a proficiency course. There are two course options:-
Those looking for higher positions such as chief compliance officer or branch manager must register for additional courses.
After completing one of the two courses, you can then take the appropriate written exam to pass the courses. There are three exams, the Canadian Securities Course (CSC) exam, Investment Funds in Canada (IFC) exam, or the Canadian Investment Funds exam.
You can select from either a remote proctored exam or an in-person exam at a dedicated test centre, providing a quiet and comfortable environment to write the exam.
Each examination consists of 100 multiple-choice questions divided by topic, tailored to the respective course. Candidates have three hours to complete the exam. Candidates have up to 3 attempts per exam to achieve a passing grade of 60%.
Once you have passed your examination, you must find a financial institution or mutual fund dealership to sponsor your licence application. Your employer will usually be your sponsor, otherwise, you will need to find an external financial institution that is willing to sponsor you. They will then file the necessary forms and submit your application to the provincial or territorial securities regulation.
When your application is approved, your sponsor must ensure that you complete a 90-day training program to gain a comprehensive understanding of the Canadian mutual funds industry.
Fees paid vary between provinces and territories; comprising system and application fees. You will have to pay additional fees if you want to register in more than one province or territory. After registration, your firm will pay an annual participation fee to your securities regulator.
When you submit your application, the provincial or territorial securities regulator may choose one of three outcomes
The terms and conditions may include:
Want to start your journey? Visit the Ashton College website (www.ashtoncollege.ca) and register for the Canadian Investment Funds Course. As an Academic Partner of the Investment of Financial Services Education Institute, this course aligns with requirements laid out by the IFSE to meet the proficiency requirements set by the provincial securities commissions for a mutual funds licence. Led by industry experts, the Ashton College course offers live and interactive sessions that will provide you with the necessary knowledge to succeed in your journey.
The information contained in this post is considered true and accurate as of the publication date. However, the accuracy of this information may be impacted by changes in circumstances that occur after the time of publication. Ashton College assumes no liability for any error or omissions in the information contained in this post or any other post in our blog.
