Canadian CANNAINVESTOR Magazine August / September 2017 - Page 147

In that regard, what follows is a high-level overview of the some of the major categories of qualified investments:

Money and deposits (such as GICs) with a Canadian bank, trust company, or credit union. Money denominated in any currency is a qualified investment provided that the fair market value of the “money” does not exceed its stated value as legal tender. Exceptions would include rare coins and other forms of money held for collectible value. In addition, for the more technologically-inclined among us, according to the CRA, digital currencies, such as Bitcoin and Ether, are not considered to be money issued by a government of a country and therefore are not qualified investments.

Securities listed on a designated stock exchange. Securities are qualified investments where they are listed on a designated stock exchange. This includes Canadian exchanges such as the Canadian National Stock Exchange; the Montreal Exchange; the TSX Venture Exchange; and the Toronto Stock Exchange. Major stock exchanges in the United States (e.g. New York Stock Exchange and the NASDAQ) as well as in Europe and Asia are also considered designated stock exchanges2. Securities in this category include all types of listed bonds, common or preferred shares as well as units or debt issued by a corporation, limited partnership, exchange traded fund, mutual fund, income trust or REIT. It should be noted that securities traded over-the-counter are generally not qualified investments; however they may qualify if they satisfy certain other qualification conditions.

Warrants and Options. In addition to warrants and options that are listed on a designated stock exchange, certain unlisted warrants, options and similar rights are eligible so long as the issuer of the warrant, option or right deals at arm’s length with each person who is an annuitant or a beneficiary of the RRSP. In addition, the underlying security must itself be a qualified investment and must be a share, unit or debt of the issuer of the right (or a non-arm’s length party), or a warrant issued by the issuer (or a non-arm’s length party) to acquire such share, unit or debt.

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2The full list of designated stock exchanges is quite extensive and is published on the Department of Finance Canada website: http://www.fin.gc.ca/act/fim-imf/dse-bvd-eng.asp.