Your investments are protected, right? Well, maybe. A 2008 Mutual Fund Dealers Association of Canada (MFDA) report has recommended that provincial securities commissions expand protection for investors because the two key funds - the Investor Protection Corp. for mutual fund investors, and the Canadian Investor Protection Fund for brokerage industry investors - have significant gaps. Both compensation funds protect investors' assets up to $1 million in the event that financial firms go bankrupt .But failed investment firms such as Portus Alternative Asset Management Inc. and Norshield Asset Management (Canada) Ltd. were not licensed as mutual fund dealers, which are covered by the IPF. Rather, they were licensed as portfolio and mutual fund managers, which are not covered at all, the report notes.
The MFDA recommends that both the fund manager and portfolio manager categories of firms be required to join either the IPC or the CIPF to ensure seamless coverage. According to a G&M article , the Ontario Securities Commission said its staff do not agree that there are gaps in the regulation and oversight of fund managers and portfolio managers. "While mutual fund assets are not held at mutual fund dealers, these assets are held at qualified custodians which are IIROC members or Canadian financial institutions, such as banks . We suggest you check on your specific investments . The MFDA report .