1. Canadian Investor Protection Fund An Overview
Presentation at CLS Breakfast Seminar
By: Ilana Singer, Vice-President & Corporate Secretary, CIPF
Date: November 2, 2017

2. Contents CIPF Protection1
CIPF Protection 2
How Does CIPF fit into the Canadian Regulatory System for Investment Dealers? 3
Which firms are CIPF Members? 4
Member Insolvency 5
Fund Size 6
Disclosure Policy 7
Examples 8
Research Findings

3. CIPF Protection
CIPF’s involvement is triggered on member firm insolvency.
Member firms are investment dealers that are members of IIROC. These investment firms are also automatically members of CIPF.
Currently, there are more than 160 member firms.
CIPF covers missing property - this is property held by a member firm on behalf of a client that is not returned to the client following the firm’s insolvency.
CIPF does not guarantee the value of the investments, or cover any drop in the value of the investments, even if the investment is in an entity related to the member firm.

4. How Does CIPF fit into the Canadian Regulatory System for Investment Dealers?

5. Which firms are CIPF Members?
A Member Firm is an investment dealer that is a member of IIROC. A list of member firms is available on the CIPF website. All such IIROC member firms are automatically member firms of CIPF.

6. Bankruptcy and Insolvency Act (Canada) Customer Name Securities
Member Insolvency
Part XII
Bankruptcy and Insolvency Act (Canada)
Customer Name Securities
Customer Pool Fund
General Fund
In a Part XII insolvency, CIPF works with trustee to determine:
Assets available in “customer pool” to distribute to clients
Clients eligible to share in customer pool
Pro rata distribution of customer pool
If customer pool not sufficient to satisfy client claims, CIPF will “top up” any clients that are eligible for CIPF coverage but only to the limit of CIPF’s coverage.
In insolvency situations where Part XII trustee is not appointed, clients claims are made directly to CIPF.

7. KEY INPUTS INTO THE MODEL
Fund Size
CIPF uses a credit based model to determine the size of the Fund required to carry out its mandate.
KEY INPUTS INTO THE MODEL
Probability of Default - the risk of a Member failing
Exposure at Default -initial exposure to CIPF
Loss Given Default -CIPF exposure after recoveries

8. CIPF Disclosure Policy Introduction
IIROC Dealer Member Rule 29.14
January 1, 2017
New Dealer Member Rule 29.28
New CIPF Disclosure Policy
May 1, 2017
Further amendments to CIPF Disclosure Policy relating to electronic brochure

9. Key Differences between Rule 29.14 and the new CIPF Disclosure Policy
CIPF Official Brochure
CIPF Membership Symbol
No reference to CIPF risk classification
CIPF Membership Symbol optional on written, visual and audio advertising
Advance approval from CIPF
Alternate CIPF Explanatory Statement
General Principles

10. CIPF’s New Disclosure Policy General Principles
Disclose CIPF Membership to clients.
No false or misleading or deceptive statement about CIPF.
Communicate about CIPF Coverage in same language as other client communication.
No reference to CIPF allowed on premises or advertising that relates to activities where CIPF protection is not available.
Compliance with General Principles
Make reasonable efforts to comply with the General Principles.

11. Examples of misleading and inaccurate disclosure

12. Examples of misleading and inaccurate disclosure

13. Examples of misleading and inaccurate disclosure

14. Research Findings
For investors, advisors are the key source of information about CIPF
Most advisors inform clients about CIPF coverage through a mix of printed materials and verbal conversations
It is best to inform advisors about CIPF through CE courses and internal firm training
Advisors prefer that communication about CIPF be made via compliance officers

15. Vice-President & Corporate Secretary
Questions?
Ilana Singer
Vice-President & Corporate Secretary
Tel: (416)
Website: