4.5 Registered Plans, Account Protection, and Trusted Contact Persons
Key Takeaways
For 2026, the RRSP dollar limit is $33,810, the TFSA annual limit is $7,000 (cumulative room $109,000 since 2009), and the FHSA allows $8,000 a year to a $40,000 lifetime limit.
CIPF covers eligible clients of CIRO mutual fund dealers if the dealer fails: up to $1 million for general accounts, $1 million for registered retirement accounts and $1 million for RESPs, combined at each firm.
CIPF does not cover market losses, unsuitable advice, issuer failure, client-name mutual funds held directly at the fund company, or mutual fund dealer accounts served from Quebec (unless the firm is also an investment dealer); mutual funds are never CDIC-insured.
For every individual client, the dealer must take reasonable steps to obtain a trusted contact person and the client's written authorization to contact them about exploitation, capacity, a legal representative or the client's contact details.
A temporary hold requires a reasonable belief of financial exploitation of a vulnerable client, or lack of capacity; the dealer must document it, notify the client as soon as possible, review it, and every 30 days revoke it or confirm its continuation.
4.5 Registered Plans, Account Protection, and Trusted Contact Persons
Quick Answer: Much of a mutual fund branch's business is held in registered plans. The BCO must know the main plan rules and 2026 limits, because KYC, suitability, leverage and withdrawal decisions depend on them. The BCO must also be able to explain accurately what protects client assets: CIPF coverage if an eligible dealer fails, not CDIC deposit insurance. Since the senior investor protections of the Client Focused Reforms, every individual client must also be asked for a trusted contact person, and the dealer must follow strict conditions before placing a temporary hold.
Registered Plans at a Glance (2026)
| Plan | Key Rules | 2026 Figures |
|---|---|---|
| RRSP | Contributions are deductible and growth is tax-deferred; withdrawals are taxable. The plan must be matured (converted to a RRIF or annuity, or cashed out) by the end of the year the annuitant turns 71. | Dollar limit $33,810 (contribution room is 18% of prior-year earned income, up to the limit, less pension adjustments). |
| Spousal RRSP | The contributor gets the deduction; the plan belongs to the spouse or common-law partner. Withdrawals are attributed back to the contributor if contributions were made in the year of withdrawal or the two previous calendar years. | Uses the contributor's RRSP room. |
| RRIF | Income vehicle that receives RRSP assets. A prescribed minimum must be withdrawn each year, starting the year after the RRIF is set up; withdrawals are taxable. | Minimums are a percentage of value based on age. |
| TFSA | Contributions are not deductible; growth and withdrawals are tax-free. Amounts withdrawn are added back to contribution room on January 1 of the next year. Over-contributions are taxed at 1% a month. | Annual limit $7,000; cumulative room since 2009 of $109,000 for someone 18 or older and resident since 2009. |
| FHSA | First-time home buyers: contributions are deductible and qualifying withdrawals for a first home are tax-free. The account must be closed within its maximum participation period (generally 15 years, or by the end of the year the holder turns 71). | $8,000 a year (up to $8,000 of unused room carries forward); $40,000 lifetime. |
| RESP | Saves for a beneficiary's post-secondary education; growth is tax-deferred. The Canada Education Savings Grant (CESG) adds 20% on the first $2,500 contributed per beneficiary each year. | Lifetime contribution limit $50,000 per beneficiary; CESG up to $500 a year and $7,200 lifetime. |
| RDSP | Long-term savings for a person eligible for the disability tax credit, with government grants and bonds. | Lifetime contribution limit $200,000. |
Supervision Points for Registered Accounts
- Interest on money borrowed to contribute to an RRSP, RRIF, TFSA, FHSA or RESP is not tax-deductible. A leveraged RRSP contribution loan is a different strategy from non-registered leverage. Rule 200's daily minimum review covers leveraging in accounts other than RRSPs and RESPs.
- Suitability: Withdrawal timing (RRIF minimums, a home purchase from an FHSA, education withdrawals from an RESP) shapes the time horizon and liquidity needs on the KYC.
- Over-contribution and attribution: Representatives should flag risks of over-contributing (TFSA, RRSP) and of spousal RRSP attribution when advising on deposits and withdrawals.
- Ownership: RRSPs, RRIFs, TFSAs and FHSAs are individual plans and cannot be held jointly. An RESP has a subscriber and one or more beneficiaries, and may have joint subscribers only if they are spouses or common-law partners. Beneficiary and successor-holder designations must be documented.
Account Protection: What Clients Are and Are Not Protected Against
CIPF Coverage
Since January 1, 2023, the Canadian Investor Protection Fund (CIPF) has covered clients of CIRO investment dealer and mutual fund dealer members (the former MFDA Investor Protection Corporation merged into it). If a member firm becomes insolvent, CIPF returns the client property the firm held for the client but cannot deliver, within these limits for an individual:
| Account Group (combined at the same member firm) | CIPF Limit |
|---|---|
| All general accounts (cash, margin, TFSA, FHSA, etc.) | $1,000,000 |
| All registered retirement accounts (RRSP, RRIF, LIRA, LIF, etc.) | $1,000,000 |
| All RESPs where the client is the subscriber | $1,000,000 |
CIPF does not cover:
- market losses or a drop in the value of investments, unsuitable investments, misrepresentation, or poor advice;
- the insolvency of the issuer of a security;
- mutual funds registered in the client's name and held directly at the fund company, unless the member otherwise has custody or control of them; or
- a mutual fund dealer account served from an office in Quebec, unless the member is also an investment dealer.
That is why the distinction between client name accounts (assets held in the client's name by someone other than the Member, such as the fund company) and nominee name accounts (assets held through the Member or its custodian) matters when explaining coverage. Account statements must say whether the account is eligible for coverage by an investor protection fund and name the fund (NI 31-103 s.14.14).
CDIC Is Not Investor Protection
The Canada Deposit Insurance Corporation insures eligible deposits at member institutions, up to $100,000 per insured category. Mutual funds are not deposits and are never CDIC-insured, even when sold in a bank branch by the bank's related dealer. Representatives must never imply otherwise, and the dealer's disclosure documents say so.
Trusted Contact Persons (MFD Rule 2.2.1(1)(c))
For every individual client, the Member and Approved Person must take reasonable steps to obtain:
- the name and contact information of a trusted contact person (TCP); and
- the client's written authorization to contact that person to confirm or ask about:
- concerns about possible financial exploitation of the client;
- concerns about the client's mental capacity to make financial decisions;
- the name and contact information of the client's legal representative, if any; and
- the client's contact information.
A TCP has no authority to give instructions or make transactions. A client may decline to name one, in which case the representative records the request and the refusal and asks again at later reviews. The requirement does not apply to clients that are not individuals.
Temporary Holds (MFD Rule 2.2)
A temporary hold is a hold on the purchase or sale of a security for a client, or on the withdrawal or transfer of cash or securities from the account. A Member may place one only if it reasonably believes:
- the client is a vulnerable client (one who may have an illness, impairment, disability or aging-related limitation that puts them at risk of financial exploitation) and financial exploitation has occurred, is occurring, has been attempted or will be attempted; or
- the client lacks the mental capacity to make decisions involving financial matters.
When it places a hold, the Member must:
- Document the facts and reasons for placing, and any decision to continue, the hold;
- Give the client notice of the hold and the reasons as soon as possible;
- Review the facts as soon as possible and on a reasonably frequent basis to decide whether the hold should continue; and
- Within 30 days, and within every 30 days after that until the hold ends, either revoke it or give the client notice of the decision to continue it, with reasons.
Branch staff who suspect exploitation should escalate to the BCO and head office at once. Contacting the TCP, where authorized, is often the first step.
A client of a CIRO mutual fund dealer in Ontario holds a non-registered account and a TFSA through the dealer (both in nominee name), plus an RRSP. The dealer becomes insolvent and some property is missing. What CIPF coverage limits apply?
Up to $1,000,000 for the non-registered account and TFSA combined, plus $1,000,000 for the RRSP
Up to $1,000,000 for each of the three accounts separately, $3,000,000 in total for this client
No coverage at all, because CIPF protects only the clients of CIRO investment dealer members
$100,000 per account, the same as the CDIC deposit insurance limit for eligible bank deposits
Under CIRO Mutual Fund Dealer Rule 2.2, a dealer places a temporary hold on a redemption because it reasonably believes an elderly client is being financially exploited. What must the dealer do next?
Transfer the client's assets into the trusted contact person's own account for safekeeping until it is resolved
Keep the hold in place indefinitely without telling the client, so that the suspected exploiter is not alerted
Report the client to FINTRAC and close the account the same day, returning the proceeds to the client by cheque
Document the reasons, notify the client promptly, review often, and every 30 days revoke the hold or confirm it continues
Which statement about a trusted contact person (TCP) under CIRO Mutual Fund Dealer Rule 2.2.1 is correct?
The dealer must take reasonable steps to obtain a TCP and the client's written authorization to contact them
The dealer must refuse to open an account for any individual client who declines to name a trusted contact person
A TCP must be obtained for corporate and trust accounts, but the requirement does not apply to individual clients
The TCP may give trading instructions on the client's behalf whenever the client is unavailable to the representative
Sections you finish are checked off in the contents.