Which of the following statements accurately distinguishes the Canada Deposit Insurance Corporation (CDIC) from the Canadian Investor Protection Fund (CIPF)?

Question: Which of the following statements accurately distinguishes the Canada Deposit Insurance Corporation (CDIC) from the Canadian Investor Protection Fund (CIPF)?

Answer options: ✅ CDIC protects eligible deposits at banks and trust companies, while CIPF protects client assets held at CIRO-regulated investment dealers.

• CDIC provides coverage for investment losses due to market fluctuations, while CIPF covers losses from fraud or insolvency of member firms.
• CDIC is funded by the Canadian government, whereas CIPF is funded by provincial securities commissions.
• CDIC covers a wider range of investment products including mutual funds and segregated funds, while CIPF is limited to cash deposits.

Correct answer: CDIC protects eligible deposits at banks and trust companies, while CIPF protects client assets held at CIRO-regulated investment dealers.

Explanation: CDIC insures eligible deposits at member financial institutions up to $100,000 per insured category. CIPF protects client assets (e.g., cash, securities) held in accounts at CIRO-regulated investment dealers if the firm becomes insolvent, up to $1 million per general account.