FAQ

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Below you will find answers to some frequently asked questions (FAQs), which are organized under the following headings:

General

Types of Property and Losses Covered

Coverage Limits

Confirming you have CIPF Coverage

Insolvency

Making a Claim to CIPF

Complaints about My Broker


General

1. How does CIPF help 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. In certain circumstances, CIPF's role may involve requesting the appointment of a trustee in bankruptcy. Client property can include securities and cash.

However, CIPF does not guarantee the value of your property. Find out more about what CIPF does and does not cover here.

2. How do I get CIPF coverage and how much does it cost?

If you have an account with a member firm that is used solely for investing in securities or in futures contracts, you’re automatically eligible for coverage. And because CIPF is funded by its member firms, you do not pay a fee for CIPF protection.

3. Are non-residents of Canada protected by CIPF? What about non-Canadian citizens?

Yes, non-residents and non-citizens are eligible for coverage. CIPF protection does not depend upon residency or citizenship.

4. I have accounts with more than one CIPF member firm. Is my protection shared over all of the member firms?

No, your protection is not shared. If you have accounts at different member firms, you have separate CIPF protection for the property being held on your behalf by each firm.

5. Is CIPF’s protection the same as CDIC’s?

No, CIPF’s protection is not the same as CDIC’s (Canadian Deposit Insurance Corporation). CDIC provides protection for Canadians’ cash deposits held in a Canadian bank.

CIPF ensures that property (securities, cash, futures contracts, and segregated insurance funds) belonging to clients is returned to them if the investment dealer holding their property becomes insolvent, within certain limits. However, CIPF does not guarantee the value of the property. All coverage provided by CIPF is subject to the CIPF Coverage Policy, as determined by the Board of CIPF from time to time. Find out more about what CIPF does and does not cover here.


Types of Property and Losses Covered

6. Are cash balances and securities held by a member firm for a client both eligible for CIPF coverage?

Yes. If the member firm becomes insolvent, CIPF’s role is to ensure that cash balances, securities and other property the firm is holding for its clients are returned to them, within certain limits. However, CIPF does not guarantee the value of the securities.

7. Are cash balances and securities denominated in a foreign currency eligible for CIPF coverage if they are held by a member firm for a client?

Yes. If the member firm becomes insolvent, CIPF’s role is to ensure that cash balances, securities and other property the firm is holding for its clients are returned to them, within certain limits. However, CIPF does not guarantee the value of the securities. Any claim to CIPF for missing property that is denominated in a foreign currency would be converted into Canadian funds, using the exchange rate in effect on the date of the member firm’s insolvency.

8. Does CIPF protect the value of my GICs (guaranteed investment certificates)?

No, CIPF does not protect the value of your GICs. If you have an account with a CIPF member firm, and the CIPF member firm becomes insolvent, CIPF works to ensure that any property (including GICs) being held for you by the firm at that time is given back to you, within certain limits. CIPF does not guarantee what the GIC will be worth.

We are often asked about insurance offered by the CDIC (Canadian Deposit Insurance Corporation) on these types of investments. CIPF is not related to the CDIC. For more information about the CDIC, and whether your investment qualifies for CDIC deposit insurance, contact the CDIC at 1 (800) 461-2342 or refer to their website at www.cdic.ca. Please note that CIPF member firms are not the same as CDIC member institutions.

9. I hold shares of Company X in my account with a CIPF member firm. Company X is now bankrupt. I still own these shares, but they have minimal value. Does CIPF protect me against this type of loss?

No. CIPF does not protect you from a drop in the value of investments for any reason.

10. My broker misled me into thinking the securities he recommended were safe and protected by CIPF. Now my firm (which is a CIPF member) and the entities that issued my investments are insolvent, and I have lost a significant amount of money. Can CIPF help me?

No, CIPF cannot help you to recover losses arising from misleading information or investments in entities that become insolvent.

CIPF’s mandate is limited to ensuring that property held in your account with a member firm at the time of insolvency is returned to you, within certain limits. If you had 100 shares in your account at the time of your broker’s insolvency, and the 100 shares were returned to you but lost some or all of their value, that loss of value is not covered by CIPF.

Other types of losses not covered by CIPF include those resulting from the following:

  • fraudulent or other misrepresentations
  • a lack of information
  • unsuitable investments

Find out more about what CIPF does and does not cover here.


Coverage Limits

11. What is the limit on the amount of coverage?

For an individual holding an account or accounts with a member firm, the limits on CIPF protection are generally as follows:

  1.   $1 million Canadian for all general accounts combined (such as cash accounts, margin accounts and TFSAs), plus
  2.   $1 million Canadian for all registered retirement accounts combined (such as RRSPs, RRIFs and LIFs), plus
  3.   $1 million Canadian for all registered education savings plans (RESPs) combined where the client is the subscriber of the plan.

See What are the Coverage Limits? and the CIPF Coverage Policy for more information.

12. How do the CIPF protection limits work for property held in joint accounts?

If you have a joint account, unless otherwise evidenced in writing, your proportionate interest in the account will be presumed to be equal to that of the other person or people with an interest in the account. You would have CIPF protection for your proportionate interest in the joint account up to the limit that applies to all of your general accounts combined. The limit of coverage on all of your general accounts combined is $1 million.

13. The CIPF member firm that I have an account with told me that my account has “excess CIPF coverage”, over and above that offered by CIPF. How does that work?

Some member firms purchase private coverage to provide their clients with protection over and above protection provided by CIPF. It does not impact eligibility for CIPF coverage. Consult your account representative at your member firm for more information about any additional coverage your account may have.

14. I have two RRSP accounts at the same firm. Each plan has a different trustee. Are these accounts combined for CIPF coverage purposes?

Yes. All of your registered retirement accounts at the same firm are combined for purposes of determining the limit of CIPF coverage. The limit of protection for property in these accounts is $1 million.

15. What are the limits of CIPF protection if I have securities worth $1.5 million in my RRSP account, my spouse has securities worth $1 million in his or her RRSP account and we have $50,000 in cash and GICs in a joint non-registered general account?

Assuming that you and your spouse qualify for coverage, and these accounts are held with a member firm that has become insolvent:

  • You would have protection of up to $1 million for any securities that were missing from your RRSP account, and your spouse would have protection of up to $1 million for any securities that were missing from his or her RRSP account.
  • You would each have protection for your 50% interest in the joint account up to the limit that applies to general accounts. For each of you, the limit of coverage on all of your general accounts combined is $1 million.

16. What if my account is a margin account and I owe money to the investment dealer. Am I still protected?

Yes, but the amount of your claim for any missing cash, securities or other property held in your account at the date of insolvency would be reduced by the amount of the cash, securities or other property you owe to the member firm.

17. Are tax-free savings accounts (TFSAs) held in a client’s name at a member firm covered by CIPF?

Yes. A TFSA is eligible for CIPF protection. It is considered a general investment account for CIPF coverage purposes. The limit of coverage on all of your general accounts combined is $1 million.


Confirming you have CIPF coverage

18. What are the CIPF member firms, and how can I confirm that I am dealing with one?

Approximately 200 investment firms across Canada are CIPF members. Check here for a list.

19. I believe the investment firm holding my account is a CIPF member, but I can’t find them under the list of current member firms on this website.

Member firms sometimes market themselves under names other than their legal entity name, which is why you may not recognize them on the list. If your investment firm’s legal entity name is not on your statement, please check with your account representative at the firm. If you are unable to access the list of member firms on the CIPF website, please call CIPF at (416) 866-8366 or toll free at 1 (888) 243-6981.

20. I have an account with an affiliate of a CIPF member firm. Does CIPF coverage apply to my investments in this account?

Not necessarily. Accounts with entities other than a member firm, including a member firm’s affiliates, are not covered by CIPF unless the affiliate itself is also a member of CIPF.


Insolvency

21. If my investment dealer is insolvent, who should I contact for information about my account?

You should contact the trustee in bankruptcy or other insolvency official who has been appointed by a court to administer the insolvent firm. A trustee in bankruptcy is a person or corporation licensed by the Office of the Superintendent of Bankruptcy Canada to administer bankruptcy proceedings. More information relating to the Office of the Superintendent of Bankruptcy Canada can be obtained on the Government of Canada website at www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/home. In most cases, the court will appoint an insolvency official to administer the affairs of an insolvent member firm.

If your member firm is insolvent and you don’t know who the insolvency official is, you may contact IIROC (Investment Industry Regulatory Organization of Canada), which is the organization that regulates investment dealers in Canada.

22. How is a trustee in bankruptcy or other insolvency official selected?

The appointment may be done at the request of the insolvent firm itself, certain creditors of the insolvent firm, or others. In certain circumstances, the appointment can be made at the request of CIPF. Depending on the circumstances of the insolvency, an insolvency official may be a trustee in bankruptcy, a receiver, a liquidator, a monitor, or other court-appointed official.

23. If a member firm is insolvent, what is CIPF’s role?

CIPF provides limited protection for property held by a member firm on behalf of an eligible client, if the member firm becomes insolvent. 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 returned to you, within certain limits. Client property can include securities and cash. However, CIPF does not guarantee the value of your property. Find out more about what CIPF does and does not cover here.

CIPF’s role may include, in certain circumstances, requesting the appointment of a trustee in bankruptcy.

24. How is client property returned to clients if a member firm becomes insolvent?

When an insolvency of a member firm occurs, CIPF works with the trustee in bankruptcy (if one is appointed) with the objective of returning any property that was being held for clients by the member firm at the date of its insolvency as quickly as possible. Since the insolvent firm can no longer carry on the function of holding property for its clients, it is generally necessary to transfer this function to another firm. As a result, client accounts may be moved to another investment dealer so that clients can access their accounts.

If a trustee in bankruptcy is appointed by a court, this trustee will typically be responsible to transfer client accounts to a new firm. If an insolvency official other than a trustee in bankruptcy is appointed by a court, this official will often be given the responsibility of transferring client accounts to another solvent firm.

CIPF protection will apply if the property being held on a client’s behalf is not available to be returned to the client. Certain limitations apply. Please see What Does CIPF Cover? for more information on what is covered and not covered.

25. My account statement from my broker shows that the securities in my account are held in segregation. Will those securities be returned to me in the event of the insolvency of the broker?

Not necessarily. It is possible that those securities will not be available to be returned to you if the broker becomes insolvent. The particular circumstances of insolvencies can vary widely. For example, one of the laws that may apply to an insolvency of an investment dealer in Canada is Part XII of the Bankruptcy and Insolvency Act (Canada). If Part XII applies, all client cash and securities held by the insolvent firm for its clients at the time of bankruptcy, other than customer name securities (registered in the customer’s name), would be included in a single “customer pool”. Any “shortfall” of client cash or securities would be allocated proportionately from the customer pool across all clients after payment of bankruptcy administration costs.

CIPF protection will apply if the property being held on a client’s behalf is not available to be returned to the client. Certain limitations apply. Please see What Does CIPF Cover? for more information on what is covered and not covered.


Making a Claim to CIPF

26. How do I make a claim to CIPF?

The information required to make a claim to CIPF is available from the CIPF website, or upon request to CIPF.

You must submit a proof of claim to CIPF within 180 days of the date of insolvency along with all documents and information to support the claim. If a trustee in bankruptcy is appointed by a court to manage the affairs of the member firm where you have an account, you may submit your claim form along with the supporting documentation to the trustee in bankruptcy, instead of CIPF. If no trustee in bankruptcy is appointed, the claim can generally be made directly to CIPF.

For more information, please refer to the CIPF Claims Procedures.


Complaints about my Broker

27. What should I do if I have a complaint about my investment dealer?

Your first course of action should be to contact your investment firm’s compliance department. If they cannot resolve the issue, contact the Investment Industry Regulatory Organization of Canada (IIROC) complaints and inquiries team toll free at 1 (877) 442-4322, or via email at investorinquiries@iiroc.ca. IIROC is the national self-regulatory organization that regulates investment dealers in Canada. CIPF is not a regulator and has no authority to investigate or regulate its member firms. You may also consider contacting the Ombudsman for Banking Services and Investments (also known as OBSI) for assistance at (416) 287-2877 or 1 (888) 451-4519, or ombudsman@obsi.ca.