The Importance of Regulatory Protection

In today’s economic climate, investors need to know the people they turn to for advice and counsel are reputable and licensed and that their investments will be safe.

Richardson GMP Limited is a dealer member of the Investment Industry Regulatory Organization of Canada (IIROC) www.iiroc.ca/English/Pages/home.aspx

All investments at Richardson GMP Limited are protected through the Canadian Investor Protection Fund (CIPF) www.cipf.ca

Some key points you should know about CIPF protection:

• CIPF covers the shortfall in a customer’s account(s) at an IIROC Dealer Member, up to $1 million, if the IIROC Dealer Member cannot return all of the customer’s assets because it is insolvent.
• Investments, including cash and GICs, in a customer’s account are returned. CIPF does not protect against market value loss, suitability or issuer default.
• A customer is an arms length person or entity with a fully disclosed account(s) carried on the books and records of the Dealer Member.
• Most customers will have a general account, which includes, for example, cash, margin, U.S. cash and U.S. margin accounts, and a separate account, which includes retirement account(s), for example, RRSP and RRIF accounts. Accounts held for the same purpose are combined for coverage purposes. The general account and each separate account are each eligible for $1 million coverage.
• The customer’s claim is determined after distributions by the trustee from the estate. Therefore, even if the customer’s account(s) is worth more than $1 million, except in exceptional circumstances, the $1 million coverage will be substantially more than the shortfall.
• Insolvency usually occurs when a Dealer Member has been suspended by IIROC and CIPF has appointed a trustee in bankruptcy.

How large is the CIPF Fund?

At August 31, 2008 the CIPF had a $530 million of resources comprised of the following:

• $330 million in Government of Canada and Provincial debt instruments
• $100 million Line of Credit from two Schedule 1 Canadian Banks
• $100 million Insurance from international commercial markets

In the unlikely event that the Fund is not sufficient to meet customer claims CIPF can assess the IIROC Dealer Members up to specific limits until all claims are satisfied.

These points must be read in conjunction with the CIPF policies which can be found on the CIPF website at Explore CIPF Coverage: Coverage Limits and Policies.

For further explanation, please visit the website or call CIPF at 416.866.8366 (Toronto area) or 1.866.243.6981.