Canadian Securities Course (CSC) Level 1 Practice Exam

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What does the MFDA Investor Protection Corporation (MFDA IPC) protect?

It protects customers from natural disasters
It provides coverage for clients involved in legal disputes
It provides protection for eligible customers of insolvent MFDA member firms
It ensures cybersecurity for financial data

The correct answer is: It provides protection for eligible customers of insolvent MFDA member firms

The correct answer is C. The MFDA Investor Protection Corporation (IPC) provides protection for eligible customers of insolvent MFDA member firms. In the event that a member firm becomes insolvent, the MFDA IPC steps in to provide coverage and protection for clients who may have suffered financial losses as a result. This protection helps to instill confidence in investors and ensures that they have some recourse in case their investments are at risk due to the insolvency of a member firm. Options A, B, and D are incorrect because the MFDA IPC does not protect customers from natural disasters, provide coverage for clients involved in legal disputes, or ensure cybersecurity for financial data. Its main purpose is to protect eligible customers in the specific scenario of an insolvent MFDA member firm.