Mr. Davies holds mutual funds through a dealer firm that suddenly declares bankruptcy. He is concerned about recovering his investments. Assuming the dealer is a member of the Canadian Investor Protection Fund (CIPF), which of the following statements accurately describes the protection available to Mr. Davies?

Question: Mr. Davies holds mutual funds through a dealer firm that suddenly declares bankruptcy. He is concerned about recovering his investments. Assuming the dealer is a member of the Canadian Investor Protection Fund (CIPF), which of the following statements accurately describes the protection available to Mr. Davies?

Answer options:

• CIPF protects eligible clients up to $1,000,000 for all general accounts combined, covering cash and securities. ✅ CIPF protects eligible clients up to $1,000,000 per separate account (e.g., RRSP, TFSA, non-registered), covering both cash and securities.
• CIPF protects eligible clients up to $1,000,000 for securities and an additional $100,000 for cash.
• CIPF protects eligible clients up to $750,000 for securities and an additional $250,000 for cash, per separate account.

Correct answer: CIPF protects eligible clients up to $1,000,000 per separate account (e.g., RRSP, TFSA, non-registered), covering both cash and securities.

Explanation: CIPF provides protection for eligible clients in the event of insolvency of a CIPF member firm. The coverage limit is $1,000,000 for each separate account, such as a RRSP, TFSA, or non-registered account, and this limit applies to both cash and securities held within that account.