Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be
correct at the time of issue, may not represent the current
Position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Option as qualified investment for rrsp or rrif
Position TAKEN:
Trading requirement removed
Reasons FOR POSITION TAKEN:
Proposed legislation
5-940514
XXXXXXXXXX D. Duff
Attention: XXXXXXXXXX
April 20, 1994
Dear Sirs:
Re: Call Options as qualified investments for RRSPs and RRIFs
This is in response to your letter of February 17, 1994, requesting a ruling on whether certain options are qualified
investments for registered retirement savings plans ("RRSPs") or registered retirement investment funds ("RRIFs").
An option can be a qualified investment for RRSPs or RRIFs pursuant to paragraph 4900(1)(e) of the Income Tax Regulations ("Regulations) if it meets the two requirements therein. This provision requires the option to be listed on the Toronto Futures Exchange or a prescribed stock exchange in Canada and the option must give the owner the right to acquire property that is itself a qualified investment for an RRSP or RRIF. There is a proposed amendment to the Regulation to remove the requirement for an option to be traded. Consequently, an option would be a qualified investment if it entitled the holder to acquire property, all of which would be a qualified investment for an RRSP or RRIF.
We trust this is satisfactory.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
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