Brokers typically place deposits for their clients at CDIC Member Institutions (MI) in two ways:
- In-client-name: where brokers place the deposit with an MI directly in the name of their client (i.e., as an agent).
- In-nominee-name: where brokers place the deposit and hold it at the MI as a nominee (i.e., in trust) for their clients.
Payout Process for Brokers
For in-client-name deposits
Deposits made by brokers as an agent for their clients (i.e., in-client-name) will be treated by CDIC as if the client made the deposit directly with the failed member.
All required information regarding these deposits and the related clients should be available to CDIC on the records of the failed member institution. Eligible in-client-name deposits are fully protected to a maximum of $100,000 (principal and interest) per deposit insurance category. CDIC will calculate deposit insurance coverage based on the categories within which brokers have placed the deposits. In this instance, CDIC will provide payment directly to the client in whose name the deposit has been made and not the broker.
For in-nominee name deposits
Deposits made by brokers on behalf of their clients (i.e., in-nominee-name) are treated by CDIC as a deposit held in trust where the broker is the trustee, and the clients are beneficiaries.
In this instance, CDIC will make the deposit insurance payment to the broker holding the eligible deposit as a nominee for their clients, and not directly to their clients. Once the payment has been issued, nominee brokers are expected to work with their clients to determine appropriate next steps. CDIC insures eligible nominee deposits up to $100,000 for each beneficiary (i.e., client) named in a trust, provided the nominee broker has met CDIC requirements and CDIC has the required beneficiary information.
Nominee brokers have up to three business days to provide required beneficiary information following a request from CDIC. This information will allow CDIC to calculate and reimburse these broker deposits. The beneficiary information CDIC requires includes:
- The Unique Client Identifiers (UCI) and related names and addresses.
- The type of special income arrangement, if any, associated with each UCI.
The beneficiary information must be provided in accordance with the Nominee Broker Data Requirements (NBDR). For details on all the required data elements and accepted formats for providing beneficiary information, including file encryption guidelines, please see the Nominee Broker Data Requirements (NBDR) page.
All NBDR files will need to be submitted through the Nominee Broker (NB) Portal. CDIC will provide submission instructions directly to the appropriate designated NB Portal users of each nominee broker.
Approach for reimbursement of in-nominee-name broker deposits
- Establish contact – CDIC directly contacts the nominee broker to establish a line of communication and outline the reimbursement process.
- Collect beneficiary information – CDIC will work directly with the nominee broker to collect the required beneficiary information through the NB Portal.
- Insurance calculation – CDIC calculates the deposit insurance payment based on the records of the failed member institution and the information/data provided by the nominee broker.
- Statement and payment – CDIC sends the insurance payment via wire transfer along with a statement itemizing calculations so the nominee broker can then allocate funds to their clients.
CDIC’s Nominee Broker Communication Process
CDIC’s reimbursement process for nominee broker deposits:
- Throughout the reimbursement process, CDIC will only communicate with the affected brokerage firm’s designated Senior/Signatory Officers.
- CDIC will contact the designated Senior/Signatory Officers on file with CDIC and registered on the NB Portal to initiate the reimbursement process and provide a high-level overview of the payout process.
- CDIC will provide all necessary documents and guidance, including NBDR submission instructions, to the designated Senior/Signatory Officers of the brokerage firm.
- CDIC will collect key client information from each broker, by means of the NBDR, which the broker will provide (upon request) to CDIC through the NB Portal. CDIC will provide specific instructions to brokers regarding how this information is to be securely provided by the broker through the CDIC NB Portal.
- CDIC will only provide payment to the affected brokerage firms and will communicate the expected timeframes for receipt of the insurance payment and accompanying statement to those brokers. Each firm is responsible for distributing the reimbursement of insured deposits to their client/beneficiaries.
For reasons of confidentiality, CDIC is prohibited from sharing any client deposit information with individual brokers or agents during the reimbursement process. Individual brokers or agents who work for or through a brokerage firm and who are looking for individual client deposit information should communicate directly with their firm.
If you have any questions about the nominee broker payout process or if you wish to confirm if your brokerage is affected, please contact us at brokers@cdic.ca.
FAQs for Brokered Deposits
What is a brokered deposit?
A brokered deposit is a deposit made by a broker or investment dealer at a CDIC member institution for one or more of their clients. There are two types of brokered deposits, and the reimbursement process will vary by deposit type:
- Deposits made in-nominee-name (nominee brokered deposits): Brokers place the deposit and hold it as a nominee (i.e., in trust) on behalf of their clients.
- Deposits made in-client-name: Brokers place the deposit directly in the name of their clients.
For more information about deposit insurance for brokered deposits, please see brokers and other financial professionals.
How are nominee brokered deposits protected by CDIC?
Eligible deposits held by brokers as a nominee (i.e., in nominee-name) for their clients are treated by CDIC as deposits held in trust. The nominee broker is the trustee depositor on record at the member institution, and their clients are the beneficiaries.
Coverage is extended to nominee brokered deposits under the trust deposit insurance category for up to $100,000 per beneficiary, provided that nominee brokers meet key disclosure requirements.
If the nominee brokered deposits are placed under another CDIC insured category (e.g., RRSP, RESP, RRIF, RDSP, FHSA or TFSA) then these deposits can receive separate CDIC insurance coverage of up to $100,000. For more information on how CDIC protects eligible deposits at each of our Member Institutions, please visit Your coverage.
How will CDIC provide insurance payments for in-client name brokered deposits?
CDIC will calculate deposit insurance coverage based on the insurance categories within which brokers placed the deposits. In this instance, CDIC will provide payment directly to the client and not the broker.
How will CDIC provide insurance payments for in-nominee name brokered deposits?
CDIC will calculate the applicable deposit insurance coverage based on the insurance categories within which brokers placed the deposits. CDIC will communicate with nominee brokers to inform them of the process and timelines to reimburse insured deposits. The insurance payments are based on the information collected by CDIC from the failed member and the affected nominee broker. In this instance, CDIC will only provide payment to the affected brokerage firms and will communicate the expected timeframes for receipt of the insurance payment and accompanying statement to those brokers. Each firm is responsible for distributing the reimbursement of insured deposits to their client/beneficiaries.
How long will it take for CDIC to pay nominee brokered insured deposits?
Nominee brokers are required to provide updated beneficiary information within three (3) business days upon request by CDIC. After receiving beneficiary information from the nominee broker, CDIC expects to pay nominee brokered deposits, as soon as possible, and in most cases, it will be within days. However, if the nominee broker submits incomplete beneficiary information, then the payments could be delayed.
I am a broker/agent for a brokerage firm. What can I do to accelerate the payment process for my clients?
For reasons of privacy and confidentiality, CDIC can only discuss deposit insurance payments with the designated brokerage contact provided to CDIC. CDIC is prohibited from sharing any information with individual brokers, broker agents or directly with the clients of the firm.
CDIC handles the nominee broker reimbursement process directly with the brokerage firm’s management. Any questions individual brokers or agents might have should be raised with their firm. CDIC will advise on timeframes for reimbursement of in-nominee-name deposits with brokerage firms.
For deposits that brokers may have placed with the failed member in their clients’ name, CDIC will reimburse the funds directly to the client in whose name the insured deposit has been made.
As a nominee broker, how many days do I have to provide client/beneficiary information to CDIC?
Nominee brokers must provide beneficiary information to CDIC within three (3) business days following CDIC’s request of the required information.
CDIC will reach out to the designated Senior Officers of brokerage firms to communicate file transmission instructions and to coordinate the insurance payout process.
As a nominee broker, where can I find the Nominee Broker Data Requirements (NBDR)?
The specifications for formatting the nominee broker data submission can be found on the following page: Nominee Broker Data Requirements (NBDR).
I am a client of a broker who placed my money at a failed member. My broker has told me to call CDIC. How do I get my money back?
CDIC will calculate deposit insurance coverage based on the insurance categories within which brokers placed the deposits. How you get your money back will depend on how your broker placed the deposit.
If your broker placed your deposits in your name, then CDIC will reimburse you directly using the information in the failed member’s records.
If your broker placed your deposits in their name, then the broker is acting as a trustee on your behalf. In this instance, CDIC makes payments directly to your broker who will in turn contact you about next steps for handling your funds.
Please contact your broker if you have specific questions about your brokered deposits.
What if my client has more than $100,000 in nominee brokered deposits held at a failed institution?
CDIC protects eligible nominee brokered deposits held at a member institution to a maximum of $100,000 per deposit category per beneficiary. Depositors with deposits above the $100,000 limit can file a claim for unprotected balances with the court-appointed liquidator.