Canadian Investor Protection Fund (CIPF)

The Canadian Investor Protection Fund is a not-for-profit insurance program established by the provincial and territorial securities regulators across Canada. The Canadian Investor Protection Fund is designed to protect investors from the bankruptcy of an individual investment firm.

Accounts are covered for up to $1 million in shortfalls in an account with securities, commodity and futures contracts, segregated insurance funds or cash. A shortfall is the difference between the market value of the account and what the insolvent company can return to the customer. While investment firms rarely become insolvent, the CIPF exists to protect the investment accounts of customers.

The Canadian Investor Protection Fund only protects investors for losses that result from the insolvency of an investment firm. It does not protect investors from losses that occur because an investor put money in a fund that was not appropriate for their risk profle, because the investor was defrauded or manipulated, because poor information was given to a client or because a client was misled. There may be other recourse for investors who are victims of such behavior, but the Canadian Investor Protection Fund will not make such investors whole. 

CIPF insurance is purchased by member firms through the Canadian Investor Protection Fund. As long as you have an investment account with a member firm, you do not need to purchase additional insurance, and you benefit from the insurance at no charge. Even non-Canadian residents who have investment accounts with Canadian member firms can benefit from the insurance program.

The Canadian Investor Protection Fund is sometimes confused with the Canadian Deposit Insurance Corporation, a corporation established by the Canadian Federal government in 1967 to insure consumer banking deposits. The Canadian Investor Protection Fund is more generous than Canadian deposit insurance. Whereas consumer savings deposits are insured up to $100,000 Canadian, an investor can receive upwards of $1 million Canadian in investor protection.

Approximately 170 different financial services firms offer insurance from the Canadian Investor Protection Fund. If you wish to confirm that the securities firm you are transacting with is a member of the Canadian Investor Protection Fund, you should contact your investment advisor or representative, or you can call CIPF at (416) 866-8366 or toll free at 1 (888) 243-6981. If a member firm has become insolvent and you think you are owed insurance money, you should contact the bankruptcy trustee in charge of the particular case.