For the purposes of CIPF coverage, an account must be

  1.   with a member firm,
  2.   used solely for either holding or trading in securities or commodity and futures contracts, and
  3.   fully disclosed in the records of the member firm. This is normally shown by receipts, contracts and statements issued by the member firm.

Client (also called a Customer)

A client is an individual, corporation, partnership, trust, trustee, executor, administrator or other legal representative, unincorporated syndicate, or unincorporated organization. Note that CIPF will sometimes use the terms “client” and “customer” interchangeably.

Customer pool

This term is used in the context of an insolvency administered under Part XII of the Bankruptcy and Insolvency Act (Canada). If this law applies to the insolvency of a member firm, the trustee in bankruptcy establishes the customer pool fund under section 261(2) of the Bankruptcy and Insolvency Act (Canada). The customer pool fund includes:

  • All securities and cash held by or for the account of every client of the member firm (other than customer name securities), and
  • All securities and cash held by or for the account of the member firm.

For complete information on this term, please refer to sections 261(2) and 262 of the Bankruptcy and Insolvency Act (Canada).


IIROC stands for the Investment Industry Regulatory Organization of Canada. IIROC is the national self-regulatory organization that regulates investment dealers in Canada.

Insolvent / Insolvency

For purposes of CIPF coverage, a member firm is generally considered insolvent on the date that a court appoints a trustee in bankruptcy, receiver, liquidator or similar type of insolvency official for the member firm. If such an official is not appointed, CIPF generally considers a member firm to be insolvent on the date clients no longer have unrestricted access to their accounts if, for example, the member firm is suspended by IIROC.


The company or other legal entity that issues securities is often called the “issuer” of securities. For example, in exchange for funds invested in Company X, investors may receive securities issued by Company X. In this example, Company X is the issuer.

Loss Calculation

This relates to the calculation of compensation for missing property, which is property held by a member firm on a client’s behalf that is not returned to the client following the member firm’s insolvency.

CIPF will provide compensation for the value of missing property as at the date of the member firm’s insolvency, subject to limits prescribed in the CIPF Coverage Policy. The date of insolvency of the member firm, for purposes of the calculation, will be determined by CIPF further to the terms of the CIPF Coverage Policy.

The maximum amount of compensation that CIPF will pay to a client is calculated after taking into account:

  • the delivery to the client of property to which the client is entitled, and
  • the distribution to the client of any assets of the insolvent member firm, less
  • any amounts owing by the client to the member firm.

CIPF may also reduce a client’s claim for compensation if the client is entitled to receive, or has received, compensation from any other source.

Sample Calculation of Loss

100 shares of Company X are held by a member firm for client prior to insolvency

100 shares of Company X are not returned to client due to insolvency of member firm

Client’s purchase price of the shares was $50 per share

Value of the shares on the date of the member firm’s insolvency was $30 per share

Amount client owes to member firm is $1000

Loss for CIPF Coverage Purposes = 100 shares x $30/each less $1000= $2000

Note that not all losses that may arise are covered by CIPF. For example, 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

Member Firm

This is an investment dealer that is a member of IIROC (Investment Industry Regulatory Organization of Canada). A list of member firms is available here. All such IIROC member firms are automatically member firms of CIPF.

Portfolio manager

A portfolio manager is a firm authorized to provide advice to a client with respect to investing in, buying or selling any type of security. If a client allows it, the portfolio manager can also make investment decisions without the client’s permission (called “discretionary authority”). In most cases, a portfolio manager is not a CIPF member. Check here for a list of CIPF members.

Advising representatives are individuals (like a financial advisor) acting on behalf of a portfolio manager, who provide advice to clients with respect to investing in, buying or selling securities.

Portfolio managers and the advising representatives they engage must register with their provincial or territorial securities regulator. You can check the registration category or categories of a firm or individual through the Canadian Securities Administrators’ National Registration Search database.


Property refers to securities, cash balances, commodities, futures contracts, segregated insurance funds or other property, received, acquired, or held by, or in the control of, the member firm for the client, including property unlawfully converted.

If securities are held directly by a client, meaning that the client has received the share certificate or other ownership documentation for the investment that he or she owns, CIPF coverage does not apply since the member firm is not holding this property for the client.


A “security” is a type of financial instrument. Examples of securities include: bonds, GICs (guaranteed investment certificates) and shares or stock of a company. A share or stock is an ownership interest in a company issued by that company. The company or other legal entity that issues the securities is also often called the “issuer” of securities.


The term shortfall is used in the context of insolvencies administered under Part XII of the Bankruptcy and Insolvency Act (Canada). It refers to the difference, as determined by the trustee in bankruptcy, between property available to be returned to clients and property that the member firm owes to its clients at the date of bankruptcy of the member firm.

This glossary provides simplified explanations of terms used on this website. The CIPF Coverage Policy will govern exclusively in determining any claims.