What Does CIPF do for Investors?
CIPF provides limited protection for property held by a member firm on behalf of an eligible client, if the member firm becomes insolvent. Member firms are investment dealers that are members of IIROC (Investment Industry Regulatory Organization of Canada). These investment firms are also automatically members of CIPF.
If you have an account with a member firm, and that firm becomes insolvent, CIPF works to ensure that any property being held for you by the firm at that time is given back to you, within certain limits. Client property can include securities and cash. In certain circumstances, CIPF’s role may involve requesting the appointment of a trustee in bankruptcy.
Does CIPF Guarantee the Value of your Investment?
No, CIPF does not guarantee the value of your investment. An example of how CIPF protection works is provided below. Note that all coverage is subject to the terms of the CIPF Coverage Policy and Claims Procedures.
If a client bought one hundred shares of Company X at $50 per share through a member firm, and the share value on the day of the member firm’s insolvency was $30, CIPF’s objective would be returning the one hundred shares to the client because that’s the property in the client’s account at the date of insolvency. If the one hundred shares are missing from the account, CIPF would provide compensation based on the value of the missing shares on the day of the firm’s insolvency. In this example, that’s $30 per share.
Do you Qualify for CIPF Coverage? Check here.