CRA confirms that the FAPI of a widely-held non-resident unit trust which is majority-owned by an investment dealer or other FI generally must be computed under the mark-to-market rules

Where s. 94.2(2) deems a non-resident unit trust whose units are majority-owned by an investment dealer, or other taxpayer subject to the mark-to-market (or specified debt obligation) rules ("FI"), to be a controlled foreign affiliate of FI, then the CFA will itself generally be deemed to be a FI, so that in computing the foreign accrual property income of the CFA, the mark-to-market and SDO rules would apply. In commenting on this situation where the FI lacked the data to do this computation properly in Canadian dollars, CRA refused to provide any comfort that it would permit the use of a (rough and ready) "proxy" method.

Neal Armstrong. Summaries of 9 July 2015 T.I. 2013-0475421E5 under s. 142.2(1) – financial institution, s. 95(2)(f.14).