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.
What is a 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.
Why should you get a mutual funds licence in Canada?
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.
How to get a mutual funds licence
Mutual fund dealers must undergo a process to get a mutual funds 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:
Take a Pre-licensing course
All mutual fund dealers must complete a proficiency course. There are two course options for applications of a mutual funds licence to take:
- Canadian Investment Funds Course (CIFC) – Available at Ashton College, an academic partner of the Investment of Financial Services Education Institute (IFSE) or the IFSE Institute itself.
- Investment Funds in Canada Course (IFC) – Offered by the Canadian Securities Institute.
Those looking for higher positions such as chief compliance officer or branch manager must register for additional courses.
Take the Exam
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, allowing candidates in remote locations, under COVID-19 related restrictions, or requiring flexibility to write the exam. You can also opt for 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 are given up to 3 attempts per exam to achieve a passing grade of 60%.
Sponsorship
Once you have passed your examination, you must find a financial institution or mutual fund dealership to sponsor your licence application. Yo ur 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.
Pay fees
Fees paid vary between provinces and territories; comprised of system and application fees. If you are seeking to register in more than one province or territory, additional fees will be charged. After registration, your firm will pay an annual participation fee to your securities regulator.
Wait for decision
When you submit your application, the provincial or territorial securities regulator may choose one of three outcomes
- Approve your application
- Refuse your application
- Approve your application with certain terms and conditions
If you have be issued your mutual funds licence with certain terms and conditions, the terms and conditions may include:
- A restriction on the duration of the registrant’s licence
- Limits to the registrants trading, underwriting, or advising to specific securities or classes of securities issuers
Where Can I Start?
Want to start your journey? Providing students with in-depth knowledge of mutual funds with lessons that put your skills and theoretical knowledge to practice, start by visiting Ashton College and registering 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, Ashton College courses offer live and interactive sessions that will provide you with the necessary knowledge to succeed in your journey. For more flexibility, live sessions are recorded and available for up to 7 days. Complete your CIFC exam and get licensed!
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