Quote:
Originally Posted by macker
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Right CIPF would cover if he is referring to the brokerage going bankrupt, which we have since determined was the basis so this is the case. If it is one of the investments within the brokerage account it could potentially fall under CDIC or FDIC (Merrill?) as I am not sure of their inner workings. It was explained to me that if for example you are dealing with BMO and they are CIPF and they go bankrupt you would get your money back, whatever the value was at the time. In this BMO brokerage account you may hold a Bank of Nova Scotia GIC. If BMO goes bankrupt CIPF kicks in and if Bank of Nova Scotia goes bankrupt then CDIC kicks in...CDIC has a stronger backing as it is a Federal Crown Corporation meaning that the government is ultimately backing the investments vs CIPF which is investment industry managed and funded. BTW many investments don't qualify for CDIC coverage and there are limits to the amount that is covered.
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Well the CDIC is for deposits (bank accounts, GICs, etc.) where the CIPF is for the solvency of the dealers themselves. The CIPF is funded by the dealers, but also has a huge line of credit and well thought out contingency plans in the event that none of this covers the losses. Long-story short, I don't think that there is anything to worry about here.
What I actually wanted to post was this:
http://online.barrons.com/article/SB...231157995.html
Its an article where Barrons essentially calls this the bottom.