The MFDA IPC covers customers who incur losses as a result of the insolvency of an MFDA Member Firm. Loss of customer assets may take the form of shortfalls in the amount and type of assets which are held by the Member Firm at the time of insolvency. The MFDA IPC’s objective is to return assets to customers or compensate customers when the assets are not available because the Member Firm has become insolvent.
Coverage is available in the amount of up to $1 million for each of a customer’s general and separate accounts. Most customers will have two “accounts” for coverage purposes, the aggregate of their trading accounts (general account) and the aggregate of their registered retirement accounts, such as RRSPs and RIFs (separate account). Securities, cash and other property of the customer that are unavailabe due to the insolvency of the Member Firm are covered by the MFDA IPC.
Customer losses which do not result from the insolvency of a Member Firm such as losses that result from changing market value of securities, unsuitable investments or the default of an issuer of securities, are not covered.
The MFDA IPC’s coverage of losses sustained by customers of insolvent Member Firms is within the discretion of the MFDA IPC. The Coverage Policy has been adopted to define the way in which the MFDA IPC uses its discretion to determine whether a customer is eligible for protection and the amount of that protection is available here: