Canadian Revenue Agency ("CRA") regulations place restrictions upon the types of positions that may be held in RSP/TFSA/FHSA/RRIF accounts with eligibility limited to those meeting the definition of a "Qualified Investment". Positions held in such accounts that do not meet this definition are referred to as "Non-Qualified Investments" and are subject to a CRA tax equal to 50% of the fair market value of the property at the time it was acquired or it became Non-Qualified.
Qualified Investments include the following instruments: an investment in properties, including money, guaranteed investment certificates (GICs), government and corporate bonds, mutual funds, and securities listed on a designated stock exchange. Note that certain investments, while Qualified, may not be offered by IB due to the product type itself or its designated exchange not being supported.
Non-Qualified investments include any property that is not classified as a Qualified Investment. Examples include stocks trading on NEX in Canada, as well as on PINK and OTCBB shares in the US.
Additional Information
- Refer to the CRA website links below:
- https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/registered-retirement-savings-plan-rrsp.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4040/rrsps-other-registered-plans-retirement.html (see "Qualified investment" definition)