This document presents condensed study material for the Canadian Securities Course, focusing on the capital market and related concepts. It outlines the sources and users of capital, various market components including stock exchanges and trading systems, and the impact of economic policies on capital allocation. The material is developed by Dazia Consulting Inc. and is not affiliated with the Canadian Securities Institute.

1. Canadian Securities
Course ®
Condensed slides for study
review
Developed by Dazia
Consulting Inc. Chapter 2
The Capital Market
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AUTHORIZATION
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2. Disclaimer
• The trade-marks AFP, BCO, CSI, CSC, CPH, DFOL, FP1, FP2, FPSU, IFC, NEC, OLC,
PFP, PFSA, WME,
Wealth Management Essentials, Branch Compliance Officer, Canadian Securities Course,
Conduct and Practices Handbook Course, Investment Fund in Canada, New Entrants
Course, Wealth Management Essentials, Personal Financial Services Advice Reading,
Financial Planning 1, Financial Planning 2, Financial Planning Supplement, Applied
Financial Planning, and Personal Financial Planner are owned by the Canadian
Securities Institute (CSI®). The Canadian Securities Institute (CSI®) does not sponsor,
license or necessarily recommend these notes and study material for any of its courses.
Dazia Consulting Inc. is an independent supplier of educational services. Exam
preparation materials are not sponsored by any other industry organization.
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3. COURSE OUTLINE
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Lesson 1.
The Canadian
Securities
Market
1
Lesson 2.
The Capital Market
2
Lesson 3.
The
Canadian
Regulatory
Environment
3
Lesson 4.
Overview
of
Economic
Principles
4
Lesson 5.
Economic Policies
5

4. Capital: Real (land, building, goods), representational
(money, bonds, stocks)
• Capital is scarce, mobile and sensitive to its environment.
• Country risk factors
• Political environment
• Economic trends : Gross domestic product, inflation,
employment
• Fiscal policy : taxes & Government spending
• Monetary policy : money supply & foreign exchange
• Investment opportunities
• The labor Force : percent skilled and productive
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5. Capital Sources & Users
Sources of Capital
• Individuals
• Non-financial
domestic
corporations
(retained
earnings)
• Government
• Foreign investors
Users of Capital
• Individuals
• Business
• Governments
• Foreign
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6. 3 key components of financial
industry:
Instruments
• Fixed income
• Equities, stocks
• Derivatives
• Managed
products
• Structured
products
Market
• Primary = Initial
public offering
• Secondary =
Exchanges
Intermediaries
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7. Stock
exchanges
(Auction
market):
TS
X:
Senior equities and
some debt
instrument
TSX
Venture:
Junior
equities
TSX Alpha
Exchange
Montreal
Exchange (ME):
Financial future
and options
Natural Gas
Exchange
Canadian
Securities
Exchange
ICE Futures
(Winnipeg Commodity
Exchange):
Agricultural
futures and
options
Aequitas NEO
Exchange
Nodal
exchange
Energ
y
7
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8. Dealer Market
Auction market vs Dealer market:
■ Prices are publicly shown to clients via system for auction
market.
Dealer market:
- Dealer acts as
market maker
for a particular
security
- Large in
transactio
n volume
- The
unlisted
equity
market
: Much
smaller
volume
comparing to
Stock market.
Mostly junior
issues.
- ON requires
unlisted equity
be reported
through
Canadian
Unlisted Board
Inc. (CUB)
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9. Trading system:
• Alternative Trading System (ATS) or Proprietary
Electronic Trading System (PETS) or Non-SRO-
Trading System (NETS):
• privately own computerized network allowing
brokers to facilitate their institutional investors.
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10. Fixed income Trading system:
• CanDeal: Allows institutional investors an
access to federal bond bid and offers.
• CBID: Operates 2 distinct retail and
institutional market for fixed income
products
• Market Axess: Member of IIROC in
Ontario & Quebec
• CanPX: provides data of real-time bid and
offer prices and hourly trade of Gov,
provincial bonds,
• T-Bills and some corp bonds
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