BCO Cheatsheet — High-Yield Rules, Workflows, Decision Tables & Glossary

Use this as your branch-level “what do we do next?” playbook for BCO scenarios. Pair it with the Syllabus for coverage and Practice for speed.

BCO in one picture (branch supervision loop)

    flowchart TD
	  A["Account opening + KYC complete"] --> B["Disclosure delivered + evidenced"]
	  B --> C["Suitability review (incl. leverage)"]
	  C --> D["Orders processed + supervision checks"]
	  D --> E["Ongoing monitoring + updates"]
	  E --> F["Complaints + investigations (if needed)"]
	  F --> G["Remediate controls + train staff"]
	  G --> A

Official exam snapshot (CSI)

* CSI notes: if you enrolled before July 5, 2023, your BCO exam is 3 hours long and consists of 90 questions.

Official exam weightings (BCO)

Sources: https://www.csi.ca/en/learning/courses/bco/curriculum and https://www.csi.ca/en/learning/courses/bco/exam-credits

The BCO’s three questions (use on every scenario)

1. Is the file complete? (KYC, forms, signatures, authority, updates)
2. Is it compliant? (disclosure delivered + evidence, suitability defensible, conflicts handled)
3. Is supervision documented? (reviews done, exceptions closed, escalations recorded)

If any answer is “no”, the best next step is usually: hold / fix / document / escalate.

Branch compliance essentials (high-yield checklists)

Evidence checklist (what should exist in the file)

• Account opening form(s) complete and signed
• KYC facts complete and current (with update triggers handled)
• Required disclosure delivered in required form with evidence
• Suitability rationale documented (especially for higher-risk situations)
• Notes of material conversations/changes
• Approvals and escalations recorded

Common “deficiency cues” in questions

• “Client profile is incomplete / outdated” → update KYC before proceeding
• “Disclosure was provided verbally” → missing required form/evidence
• “Client is borrowing to invest” → enhanced suitability + disclosure + supervision
• “Representative promised returns / cherry-picked performance” → unacceptable communication; supervise and correct
• “Complaint is informal / spoken” → still a complaint; log and escalate based on severity

Regulation + conduct (what matters at branch level)

The branch-level version of “standards of conduct”

• be fair and clear (avoid misleading statements)
• manage conflicts (identify, disclose, avoid/mitigate)
• keep records that prove what was done
• supervise representatives consistently (not ad hoc)

AML/ATF, telemarketing, and DNCL (high-yield)

• If you see unusual patterns or identity concerns: escalate and document.
• For telemarketing: assume there are consent and process constraints; use approved scripts/process and keep records.

Registration requirements (what the branch must be able to prove)

What “monitoring” means in practice

• representative remains properly registered/qualified
• restricted activities are not occurring
• continuing education is tracked and completed
• supervision evidence exists (reviews and follow-ups)

Account opening (high-yield branch workflow)

Account opening quality gate

If any of these are missing, the safest response is “stop and complete”:

• identity/authority is unclear
• KYC fields are blank or contradictory
• client objective/risk profile is missing
• documentation is unsigned or incomplete

Update triggers (the line to remember)

KYC must be updated when material facts change or when a scheduled review is due.

Disclosure (proof-of-delivery discipline)

Required mindset

Disclosure is not “did we mention it?”
Disclosure is “did we deliver it in the required form and can we prove it?”

Evidence patterns that score well

• dated delivery record (paper or electronic)
• client acknowledgement where required
• retention of the version delivered (or a system record showing it)

Suitability (including leverage)

Suitability is a “facts → decision → rationale” chain

Leverage: the supervision cue

If leverage is involved, assume:

• higher documentation expectations
• enhanced disclosure expectations
• heightened supervision and escalation risk

Performance evaluation + communications (high-yield math + rules)

NAV and NAVPU

\[ NAV=\text{Assets}-\text{Liabilities} \]

\[ NAVPU=\frac{NAV}{\text{Units outstanding}} \]

What it tells you: NAV is the fund’s net value; NAVPU is the per-unit price used for purchases/redemptions.

Common pitfall: confusing total fund NAV with unit price.

Holding period return (HPR)

\[ HPR=\frac{V_1-V_0+I}{V_0} \]

What it tells you: Total return over a period = value change plus income, relative to starting value.

Common pitfalls: forgetting income/distributions \(I\); dividing by \(V_1\) instead of \(V_0\).

Distributions and “why my account value didn’t go up”

When a distribution is paid, the unit price may drop by roughly the distribution amount, while the investor receives cash or reinvested units. Total return needs both components.

Performance communications: the compliance rule of thumb

If a statement could mislead a reasonable client, it’s a supervision issue. Use approved materials and keep evidence.

Complaints (workflow you must know)

    flowchart LR
	  A["Complaint received"] --> B["Log + acknowledge"]
	  B --> C["Escalate based on severity"]
	  C --> D["Investigate (preserve evidence)"]
	  D --> E["Resolve + communicate"]
	  E --> F["Remediate controls + training"]

High-scoring answer cue: choose the step that increases documentation and appropriate escalation.

Supervision + control systems (where the big marks live)

Two things a control system must do

1. prevent or detect deficiencies
2. prove it happened (evidence)

Branch checklists (what they’re really for)

• consistent reviews (not ad hoc)
• clear accountability (who reviewed what)
• closed-loop follow-up (exceptions resolved)

If you see repeated issues…

The best answer often includes: root cause → control change → training → monitoring.

Glossary (BCO terminology)

Branch supervision

• Branch Compliance Officer (BCO): the person responsible for branch-level supervision and compliance controls for mutual fund dealings.
• Exception: an out-of-policy or unusual event that requires review, documentation, and follow-up.
• Escalation: raising an issue to head office compliance/supervision based on severity, risk, or policy requirements.

Client onboarding and authority

• KYC (Know Your Client): collecting and maintaining client facts used for suitability decisions.
• Account type: legal structure of the account that affects documentation, authority, and obligations.
• Power of attorney (POA): legal authorization allowing someone to act on the client’s behalf (requires controls).
• FATCA (concept): tax compliance framework that can influence account documentation and reporting.

Disclosure and suitability

• Disclosure: delivering required information (fees, risks, conflicts, product documents) in the required form with evidence.
• Fund Facts: standardized mutual fund disclosure document required by rules (timing/evidence matters).
• Suitability: ensuring a recommendation/transaction fits client objectives and constraints.
• Leverage: borrowing to invest; increases risk and supervision/documentation expectations.

Complaints and investigations

• Complaint: any expression of dissatisfaction that should be logged and handled through a structured process.
• Investigation: fact-finding process with evidence preservation, documentation, and appropriate escalation.
• Remediation: fixing the control weakness that caused the issue (training, process change, monitoring).

Regulation and conduct (high-level)

• Standards of conduct: fair dealing, conflicts management, disclosure, and suitability expectations.
• AML/ATF: anti-money laundering and anti-terrorist financing requirements (risk-based, escalate red flags).
• DNCL: National Do Not Call List; telemarketing compliance has consent/process rules.