Missing property - This is property held by a member firm on your behalf that is not returned to you following the firm’s insolvency. Missing property can include:
- futures contracts
- segregated insurance funds
CIPF does not cover:
- Losses resulting from any of the following:
- a drop in the value of your investments for any reason
- investments that were not suitable for you
- fraudulent or other misrepresentations that were made to you
- misleading information that was given to you
- important information that was not disclosed to you
- poor investment advice
- the insolvency or default of the company or organization that issued your security
- Securities held directly by the client – meaning that you have received the share certificate or other ownership documentation for the investment that you own. CIPF coverage does not apply in this case since the firm is not holding this property for you.
- Other exclusions identified in the CIPF Coverage Policy.
Does CIPF guarantee the value of your investment?
No. CIPF’s role is to ensure the return of a client’s property held by a member firm, if the member firm becomes insolvent. CIPF does not guarantee the value of the property. An example showing how CIPF coverage works is provided below.
If a client bought one hundred shares of Company X at $50 per share through a member firm, and the share value on the day of the member firm’s insolvency was $30, CIPF’s objective would be returning the one hundred shares to the client because that’s the property in the client’s account at the date of insolvency. If the one hundred shares are missing from the account, CIPF would provide compensation based on the value of the missing shares on the day of the firm’s insolvency. In this example, that’s $30 per share.