III. Trust Account Management
Protection Of Deposits
In the event of failure of a bank or trust company, the Canada Deposit Insurance Corporation (“C.D.I.C.”) insures deposit accounts of Canadian currency to a limit of $100,000.00.
Brokerages that have a pooled trust account at a chartered bank or trust company should be aware that, in order to protect each person who has funds on deposit in that account to the $100,000.00 maximum amount under C.D.I.C.,section 7-3 of the Rules requires that the brokerage provide to the financial institution within 30 days after April 30 every year:
- written notice that the account is a pooled trust account; and
- a list identifying each person on whose behalf money is held in that account and specifying the amount held for each person.
Annual reporting is not required if the account is with a credit union, as a limit of $100,000.00 applies to each person who has funds on deposit in the brokerage’s pooled trust account. As a result, brokerages that have pooled trust accounts at credit unions are not required to provide any notification to the credit union.