CIRO Director and Executive Exam Guide, Study Plan & Practice Questions

Use this CIRO Director and Executive Exam guide when you need both the review pages and the chapterized lessons in one place. The Director and Executive exam is a governance-and-oversight exam, so the center of gravity is not line-level procedure. It is whether you can identify board, executive, and UDP responsibilities in the right order and connect them to risk ownership, escalation, and defence.

Quick links

• Study Plan
• Cheat Sheet
• FAQ
• Resources
• Practice CIRO Director and Executive Exam on Web

Current study snapshot

What this exam is really testing

Director and Executive Exam weighting

How to use this guide

• Keep governance and risk-control topics together instead of studying them as separate silos.
• Use the full guide when you need the section-level path through duties, liabilities, risk, and UDP oversight.
• Use the FAQ when you need to separate board oversight from management execution.
• Use practice questions for senior-level scenario work once the governance vocabulary is stable.

Practice this exam

Use this free guide for review, then Start CIRO Director Practice on Finance Prep for timed questions, topic drills, and detailed explanations.

In this section

• General regulatory framework
  Study the general regulatory framework element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Role and authority of the CSA and provincial or territorial regulators
    Understand the jurisdiction, mandate, and objectives of the Canadian Securities Administrators and provincial or territorial securities and derivatives regulators.
  • Role and authority of CIRO
    Understand the jurisdiction, mandate, and objectives of CIRO and its relevance to Directors and Executives of an Investment Dealer.
  • Exchanges and other marketplaces
    Understand the role of exchanges, alternative trading systems, crypto asset trading platforms, and foreign organized regulated markets.
  • Canadian Investor Protection Fund (CIPF)
    Understand the purpose, objective, governance structure, and funding model of CIPF.
  • Other financial regulators and agencies
    Understand the function and purpose of regulators and agencies such as FSRA, the Bank of Canada, IMET, FINTRAC, OSFI, privacy commissioners, OBSI, and key U.S. regulators.
  • Federal statutes governing and impacting the industry
    Understand the purpose and practical implications of the Bankruptcy and Insolvency Act, Part XII, for a securities firm bankruptcy.
  • Additional federal statutes
    Remember the purpose of the Bank Act in relation to stability, consumer protection, competition, and integrity.
• Investment Dealer business model and related areas
  Study the investment dealer business model and related areas element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Client types
    Analyze the risks, opportunities, and requirements associated with retail clients in an Investment Dealer business model.
  • Business models
    Analyze the risks, opportunities, and requirements associated with advisory, portfolio management, online advice, OEO, DEA, proprietary trading, and institutional trading models.
  • Services provided by the Investment Dealer
    Analyze the risks, opportunities, and requirements associated with underwriting, capital raising, M&A and corporate advisory services, trading and sales, and research.
  • Account types
    Analyze the risks, opportunities, and requirements associated with advisory, in-house managed, third-party managed, discretionary, fee-based or wrap, tax-deferred, margin, and derivatives accounts.
  • Basic types of securities
    Analyze the risks, opportunities, and requirements associated with equities.
  • Complex types of securities and products
    Analyze the risks, opportunities, and requirements associated with leveraged and inverse ETFs.
  • Types of derivatives
    Analyze the risks, opportunities, and requirements associated with options, forwards, futures, swaps, CFDs, and similar derivatives defined by CIRO.
  • Compensation structures
    Analyze the risks, opportunities, and requirements associated with commission-based compensation.
  • Profitability measures
    Analyze the meaning and use of gross, operating, and net profit margins for an Investment Dealer.
  • Development, evaluation, and delivery of products and services
    Understand requirements for development, evaluation, and delivery of products and services, including product risk characteristics and appropriate account usage.
  • Product due diligence requirements and exemptions
    Understand product due diligence requirements, including assessment, approval, and monitoring of securities and derivatives made available to clients.
  • Product due diligence policies and procedures
    Understand requirements for product due diligence policies and procedures that reflect the Investment Dealer business model.
• Offering and distribution of securities
  Study the offering and distribution of securities element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Prospectus requirements and the role of securities legislation
    Understand National Instrument 41-101, National Instrument 44-101, and provincial or territorial legislation relating to the offering and distribution of securities.
  • Selective disclosure and securities issuance
    Understand where information and filing relating to securities issuance can rely on selective disclosure and where legislative prohibitions apply.
  • Prospectus exemptions
    Understand commonly used prospectus exemptions under National Instrument 45-106, including exempt market securities and private placements.
  • Investor information and protections
    Understand the information and protections available to investors in relation to the issuance of securities, including information circulars and shareholder communication procedures.
  • Rights and obligations of the Investment Dealer when underwriting
    Analyze the rights and obligations of the Investment Dealer when underwriting securities issuers, including gatekeeping functions and types of underwriting.
  • Continuous disclosure requirements
    Understand public-company continuous disclosure requirements, including periodic, event-driven, and other disclosures.
  • Statutory rights of shareholders
    Understand shareholder rights to information, attendance and participation at meetings, voting on company resolutions, and declared dividends.
  • Additional common and civil law liabilities applying to issuers
    Remember common contract-law liabilities and remedies relevant to issuers, including damages, punitive damages, specific performance, declarations of voidness, and litigation costs.
• Corporate governance and ethics
  Study the corporate governance and ethics element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Components of effective corporate governance
    Analyze effective corporate governance components, including Board composition, Director qualifications, Board mandate, committee delegation, and segregation of duties.
  • Company bylaws
    Understand the impact of a company setting its own corporate bylaws for meetings, elections, removals, remuneration, dividends, transferability of shares, and records management.
  • ESG considerations
    Remember the relevance of environmental, social, and governance considerations for a Director or Executive.
  • Ethics and integrity in the securities industry
    Analyze how ethical behaviour relates to proper care, independent professional judgment, trustworthiness, honesty, fairness, and compliance with rules.
  • Ethics and integrity in corporate governance
    Analyze transparency, oversight, accountability, training, and awareness as governance applications of ethics and integrity.
  • Consequences and risks of unethical behaviour
    Analyze the legal, reputational, regulatory, and financial consequences of unethical behaviour.
  • CIRO conflicts of interest requirements
    Analyze CIRO obligations to avoid, manage, disclose, and resolve material conflicts of interest.
  • Outside activities
    Apply CIRO requirements relating to outside activities for Directors and Executives, including definition, pre-approval, and disclosure.
  • Personal financial dealings with clients
    Apply prohibitions and required actions relating to accepting consideration, settlement agreements, borrowing from clients, lending to clients, control or authority, and commingling of assets or funds.
  • Containment of confidential and material non-public information
    Analyze requirements for information barriers, firewalls, grey lists, restricted lists, research report disclosures, and cybersecurity controls.
• Duties, liabilities and defences
  Study the duties, liabilities and defences element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Strategic company objectives and positions
    Analyze strategic company objectives and positions using strategic analysis methods, option evaluation, and organizational strategy concepts.
  • Duties of Directors and Executives
    Analyze duties to perform with the care, skill, and diligence of a reasonably prudent person.
  • Fiduciary obligations
    Analyze fiduciary obligations to act fairly, honestly, and in good faith.
  • Potential legal liabilities
    Analyze potential legal liabilities arising from knowledge and authorization of illegal acts or misrepresentations.
  • Securities-related criminal penalties
    Remember securities-related criminal penalties, including absolute or conditional sentences, fines, imprisonment, parole or probation conditions, restitution orders, forfeiture of property, and committal for contempt.
  • Limitation of liability
    Understand the concept of limitation of liability, including indemnity.
  • Defences available to officers and Directors
    Understand legal defences available to officers and Directors, including reasonable diligence, due diligence, good faith reliance, and the business judgment rule.
• Risk management and internal controls
  Study the risk management and internal controls element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Definition and objectives of risk management
    Understand the definition and objectives of risk management for an Investment Dealer.
  • Risk management in a principles-based regulatory environment
    Analyze risk management in a principles-based regulatory environment.
  • Regulatory expectations of risk management
    Understand regulatory roles and compliance responsibilities of Directors, Executives, the CFO, the CCO, and the UDP in risk management.
  • Definition and objectives of internal controls
    Understand the definition and objectives of internal controls.
  • Investment Dealer use of risk management frameworks
    Analyze an Investment Dealer's use of risk management frameworks, including risk tolerance, risk appetite, risk identification, measurement, limits, mitigations, and risk or compliance controls.
  • Independent risk management from a Director or Executive perspective
    Apply actions required to ensure appropriate independent risk management over infrastructure and higher-risk business lines.
  • Role of the auditor and auditor reports
    Understand the role of the auditor and auditor reports in relation to internal controls.
  • Risk, growth, and value creation
    Analyze the role of risk in growth and value creation and the role of risk management in preservation of value.
  • Reporting legal actions filed against the Investment Dealer
    Understand reporting requirements for legal actions filed against the Investment Dealer.
  • Risk identification, measurement, monitoring, control, and reporting
    Analyze risk identification, measurement, monitoring, control, and reporting in light of the nature, scale, and complexity of business lines and supporting activities.
  • Effectiveness of risk management tools
    Analyze the effectiveness of hedging as a risk-management tool.
  • Credit risk management policies and procedures
    Understand requirements relating to credit risk management policies and procedures.
• Significant areas of risk
  Study the significant areas of risk element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Definition of significant areas of risk
    Understand the definition of significant areas of risk for an Investment Dealer.
  • Managing significant areas of risk
    Apply requirements relating to managing significant areas of risk, including the appointment of Executives, their responsibilities, and documenting responsibilities.
  • Significant areas of risk specific to the Investment Dealer and its business lines
    Analyze significant financial risks, including financing arrangements, books and records, regulatory financial report filings, pricing internal controls, minimum capital levels, early warning tests, and controls protecting firm and client assets through segregation and safekeeping.
  • Impact and mitigation of significant areas of risk
    Analyze the impact of significant areas of risk on the Investment Dealer.
• Ultimate Designated Person (UDP) responsibilities
  Study the ultimate designated person (udp) responsibilities element of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.
  • Specific UDP responsibilities
    Analyze situations highlighting the UDP's responsibility to establish and maintain an effective compliance system and culture.
  • UDP monitoring and supervision responsibilities
    Analyze the UDP's monitoring and supervision responsibilities in cases of specific non-compliance.
  • UDP oversight of Executives managing significant areas of risk
    Analyze the role of the UDP in overseeing Executives, including the CCO and CFO, in managing significant areas of risk.
  • Early warning rules and related risks
    Apply the impact of and risks associated with early warning rules, including the need to maintain a positive risk-adjusted capital amount.
  • Ensuring issues raised by examination reports are addressed
    Understand the requirement for the UDP to ensure that issues raised by examination reports are responded to and addressed.
  • Annual risk questionnaires and risk trend reports
    Understand the purpose of annual risk questionnaires and risk trend reports in informing annual compliance risk assessments.
• CIRO Director and Executive Exam Study Plan
  CIRO Director and Executive Exam study plan with 30-, 60-, and 90-day tracks, weekly sequencing, and final-review priorities.
• CIRO Director and Executive Exam Cheat Sheet: Governance Review
  High-yield CIRO Director and Executive Exam cheat sheet for governance oversight, duties, liabilities, risk management, internal controls, significant risks, UDP responsibilities, and scenario traps.
• CIRO Director and Executive Exam FAQ
  Common questions about the CIRO Director and Executive Exam format, what it tests, study priorities, and how to use this guide.
• CIRO Director and Executive Exam Resources
  Official CIRO source pages and the best way to use them with this CIRO Director and Executive Exam guide.