Tuesday, February 12, 2013

IIROC and CIPF

Here is some information that might help out the person wishing to open an investment account in Canada. 

Protection and regulation are really two different things, depending on what you mean when you say “protection”. I define protection (for the purposes of this post) to be protection of my personnel funds in the case of another MF Global or PFG Best.  Even if the regulator does not do their job (put your hand up American regulators!!!!) you will still get your funds returned to you. 
I was part of the MF Global non-sense, got every penny back, and it didn’t take very long either. I had an MF Global account that was registered in Canada.
Definitions
IIROC - Investment Industry Regulatory Organization of Canada.
CIPF - Canadian Investor Protection Fund.
IIROC is the Canadian Regulator.  CIPF Members are Dealer Members of IIROC.
Mission Statement: To contribute to the security and confidence of customers of Canadian investment dealers by maintaining adequate resources to return assets to eligible customers in cases where a Member becomes insolvent.


In the unlikely event that the Member you are dealing with becomes insolvent, CIPF will ensure the securities, cash and other property that are held in your account are returned to you in accordance with our Coverage Policy
Investment dealer insolvency doesn’t happen very often.  In fact, since CIPF’s inception in 1969 there have been only 18 Member insolvencies. CIPF has made payments of $36 million, net of recoveries, and no eligible customers have suffered a loss of property.

So, for anyone outside of Canada (except AUSA residents), take a look at this page.... it tells you what and who is covered under CIPF.

http://www.cipf.ca/Public/CIPFCoverage/ ... olicy.aspx

Does it matter if I do not live in Canada, or if I am not a Canadian citizen or a Canadian resident?

No. CIPF coverage does not depend upon residency or citizenship. CIPF coverage is available to you when you open an account with a CIPF Member.
If you are living in the USA, forget it.  The U.S regulators are soooo terrible that they demand your money stays inside the U.S.  Imagine if this rule didn't exist, there would be a whole lot of American funds being transfer outside the country.  Other countries respect the regulator so they don't open accounts for Americans.  I have money sitting in the bankruptcy case with PFG – so I don’t have anything good to say about the US financial system. 

Disclaimer

The information presented on this site is for educational and entertainment purposes only. This site contains no suggestions or instructions that you must follow, do your own research and due diligence before committing your cash to the markets. Your on your own.