The Mutual Fund Dealers Association of Canada Investor Protection Corporation (MFDA IPC), now part of the Canadian Investor Protection Fund (CIPF), provides protection for client assets in the event of a member firm's insolvency. Coverage is based on "separate accounts." A client's non-registered account is treated as one separate account, and their RRSP is treated as another. Each separate account is eligible for up to $1 million in coverage. In this case, the $550,000 non-registered account and the $950,000 RRSP account are both fully covered, resulting in total eligible coverage of $1,500,000.

A. The client is eligible for coverage because their assets are held at an MFDA (now CIRO) member firm, and this is the exact scenario the protection fund is designed for.

B. This amount incorrectly covers only the RRSP account, ignoring the separate coverage available for the non-registered account.

D. This amount incorrectly covers only the non-registered account, ignoring the separate coverage available for the RRSP account.

1. Canadian Investor Protection Fund (CIPF). (2023). CIPF Coverage. (The official CIPF website details the coverage rules, which maintain the principle of separate account categories inherited from the MFDA IPC and IIROC's CIPF. It specifies separate $1M limits for general accounts and registered retirement accounts).

2. Canadian Securities Institute (CSI). (2022). Investment Funds in Canada Course, Volume 1, Chapter 2: The Regulatory Environment, p. 2-21. (Explains the MFDA IPC coverage limits and the concept of separate accounts for determining total coverage).

3. MFDA Investor Protection Corporation. (Archived). Coverage - What's Covered. (Historical documentation from the MFDA IPC confirming the $1 million limit applied separately to different account categories, such as a general account and an RRSP).