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Investment Dealer business model and related areas

Study the investment dealer business model and related areas domain of the CIRO Director and Executive Exam and the section-level rules, workflows, and control points it tests.

Chapter 2 follows the official CIRO Director and Executive Exam syllabus element Investment Dealer business model and related areas. This domain carries 9 questions (~12%), so your study depth should reflect both its weighting and how often it drives scenario-based judgment on this exam.

The strongest exam answers in this chapter usually do two things well: they classify the situation correctly before choosing an action, and they connect the rule to the actual business, client, market, finance, or supervisory consequence. That is usually where weaker answers lose precision.

Section Map

  • 2.1 Client types
  • 2.2 Business models
  • 2.3 Services provided by the Investment Dealer
  • 2.4 Account types
  • 2.5 Basic types of securities
  • 2.6 Complex types of securities and products
  • 2.7 Types of derivatives
  • 2.8 Compensation structures
  • 2.9 Profitability measures
  • 2.10 Development, evaluation, and delivery of products and services
  • 2.11 Product due diligence requirements and exemptions
  • 2.12 Product due diligence policies and procedures

Study Priority

  • Official weighting: 9 questions (~12%)
  • Learn the rule language, but spend most of your time on scenario translation: what changes in practice, what must be documented, what must be recalculated, and what must be escalated.

In this section

  • 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.
Revised on Thursday, April 23, 2026