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.
D. Duff (613) 957-3498
24(1)
Attention: 19(1)
July 27, 1990
Dear Sirs:
This is in reply to your letter of May 14, 1990 regarding investments in pooled fund trusts.
You asked for a technical opinion on whether an investment by one pooled fund trust in another pooled fund trust would be an investment in a marketable security per clause 5000(7)(a)(i)(A) of the Income Tax Regulations (the "Regulations") and whether the income derived therefrom would be included in the 95% requirement in the definition of pooled fund trust in subsection 5000(7) of the Regulations. Furthermore we are to assume that the second pooled fund trust is a unit trust, but not a mutual fund trust and is held either by numerous investors or only by members of a particular group Registered Retirement Savings Plan.
It is a question of fact whether such an investment is a marketable security. Generally, where a particular investment is capable of reasonably prompt conversion into cash and can easily be traded because a ready group of buyers exists and there are no legal or other impediments to the sale, the investment could be considered a marketable security.
We trust our comments will be of assistance.
Yours truly,
for Director Financial Industries Division Rulings Directorate
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