(September 1 – 11:30 ET) – The Canadian Investor Protection Fund will double current coverage limits to a maximum of $1 million and remove the $60,000 coverage limit on cash balances held by customers. These changes are effective September 1, 1999.
The Canadian Investor Protection Fund was established to cover customers’ losses of securities and cash balances that result from the insolvency of a Member firm. The CIPF is sponsored entirely by members of the securities industry through the sponsoring Self-Regulatory Organizations – the Toronto, Vancouver, Alberta and Winnipeg Stock Exchanges, The Montreal Exchange, The Toronto Futures Exchange and the Investment Dealers Association of Canada. It currently has marketable securities exceeding $160 million in its trust fund, and maintains a $100 million line of credit with two major Canadian banks.
As of September 1, 1999, accounts of eligible customers of a CIPF Member will be covered to the new maximum of $1 million dollars for any combination of securities and cash. The previous limit, set in 1992, was $500,000 including a maximum limit for cash balances of $60,000.
CIPF policies defining Separate Accounts for coverage purposes have also been changed. All registered retirement accounts of a customer will be combined and aggregated as a single Separate Account. A customer’s proportionate interest in a joint account will be combined with the customer’s General Account.
The changes to CIPF coverage to be effective September 1, 1999 have been determined by the Governors to only be available for losses of customers in respect of the insolvency of Member firms occurring after September 1, 1999. Eligibility and limits in respect of CIPF coverage are subject to the policies of the Governors and the terms of the Fund.
-IE Staff
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