Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Will the manner in which certain money market securities are issued and held in the CDS system effect their status as qualified investments held by a registered plan
Position?
A general position has been developed that will mean securities issued and held via the CDS system will continue to be treated the same as securities not processed through the CDS.
Reasons:
In our opinion the CDS ensures a registered plan’s beneficial ownership of the securities is clear and poses no problem to the administration of the provisions of the Act.
XXXXXXXXXX 982414
W. C. Harding
Attention: XXXXXXXXXX
November 27, 1998
Dear Sirs:
Re: Qualified Investments for Registered Plans
This is in reply to your letter of September 16, 1998, in which you requested confirmation that Revenue Canada will consider a trust governed by a plan registered under the Income Tax Act (the “Act”) holds a bond, debenture, note or similar obligation for the purposes of the Act where such a security is issued and processed through the Central Depository for Securities (“CDS”) system.
Based on our understanding that the CDS is a book entry system for the recording of ownership of securities (to facilitate the clearance and settlement of the security transactions) we have accepted that where registration and trading of a security is maintained by the CDS and the security is otherwise a qualified investment for a particular registered plan, the security will be a qualified investment for that registered plan where the plan is the beneficial owner of the security.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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