The Mutual Fund Dealers Association of Canada today announced the establishment of the MFDA Investor Protection Corp.

The MFDA IPC is a protection plan for customers of mutual fund dealers that are members of the MFDA. It will start offering coverage of up to $1 million per customer account, covering all client assets held by the member in the event of insolvency, effective July 1.

The initial size of the MFDA IPC has been set at $30 million.

“We are very proud of this accomplishment and all parties involved deserve credit, including MFDA members, the MFDA and IPC boards of directors and the recognizing CSA jurisdictions. This is a major milestone in furthering our collective goal of investor protection,” said Larry Waite, MFDA president and CEO, in a release.

The long-awaited contingency fund was approved in May 2005 by the securities commissions in Alberta, BC, Nova Scotia and Ontario and by the Financial Services Commission in Saskatchewan. The final piece of the puzzle required to launch the fund was getting its initial line of credit approved.