Answers to a few questions asked at InvestRight Seminar on Vancouver Island
Last month, a colleague and I presented the BCSC’s Investright seminar to a group of 50 retired business and professional people in Ladysmith BC. We discussed tips on how people could protect themselves from fraud and how to avoid unsuitable investment products.
When we participate in events or give seminars, there are always great questions about who we are and what we do. Below are three answers to questions that we thought would be useful to share with our online audience.
Are offshore-listed companies risky?
This question arose from one of our warning signs of investment fraud when an investor is told that their money is going offshore so they don’t have to pay taxes. This warning sign does not apply to listed foreign companies, which are a big part of Canada’s market place. However, whenever a listed company operates in a jurisdiction with different legal and accounting environments, these differences lead to additional risks that investors should consider beyond those that would apply to an equivalent Canadian company.
Does the BC Securities Commission cooperate with other regulators in Canada?
We work with securities regulators across Canada and around the world to share information and conduct investigations. Many of the cases we’ve seen recently involve parties in multiple jurisdictions, leading us to cooperate with regulators in those jurisdictions. We tend to focus our efforts on individuals and companies based in BC who are alleged to have acted contrary to the public interest, and cases where investors are based in BC.
Are securities covered by CDIC insurance?
It is useful to ask your advisor whether the product you are considering is covered by insurance from Canadian Deposit Insurance Corporation (CDIC) or some other investor protection fund. Most securities are not covered by CDIC insurance because that insurance protects money deposited in Canadian banks and certain other financial institutions from failure by that institution.
Other investments may be protected by investor protection funds, such as Canadian Investor Protection Fund (CIPF) or the Mutual Fund Dealers Association’s Investor Protection Corporation (IPC). Whether you will be eligible for this coverage will depend on where your advisor works. This recent article in the Financial Post describes in laymen’s terms how CIPF works.
None of these funds protect against market losses or fraud that does not lead to insolvency. All have limits on coverage, ranging from $100,000 to $1,000,000.
For more answers to questions that people ask us, go to our Questions & Answers section of our website. You can also send us your questions by commenting on this post.
If you are part of a group of 20 or more would like to have the BCSC come and present InvestRight in your community, please contact:
Anne Rutherglen, Communications Coordinator
Email: [email protected]
Phone: 604-899-6731 or toll free: 1-800-373-6393