| 19(1) | File No. 5-8731 |
| A.B. Adler | |
| (613) 957-8962 |
October 25, 1989
Dear Sirs:
This is in reply to your letter of September 14, 1989 in which you requested our views as to whether certain warrants would be qualified investments for a registered retirements savings plan (RRSP).
You advised that the warrants in question 24(1) give the holder the right to acquire a specifies amount of cash denominated in Canadian dollars, upon their being exercised as described in the offering circular provided by you. Further, it is your view that such warrants would be qualified investments for an RRSP under paragraph 4900(1)(e) of the Income Tax Regulations ("Regulations") by reason of the combined application of that provision and subparagraphs 146(1)(g)(i) of the Income Tax Act (the "Act").
For your information, as indicated in paragraph 23 of our Information Circular No. 70-6R we do not provide written opinions on proposed transactions. Further, we do not provide written opinions on proposed transactions. However, we are prepared to provide you with the following comments.
As indicated in paragraph 6 of IT-320R money that is legal tender in Canada can be a qualified investment for an RRSP under subparagraphs 146(1)(g)(i) and (iv) of the Act.
For purposes of paragraph 4900(1)(e) of the Regulations it is our view that the holder of a warrant or right described therein should be able if he chooses to do so, to exercise the right to acquire property referred to therein, for example, shares, regardless of price fluctuations.
Should you wish to pursue this issue further we suggest that you request a ruling.
We trust that our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate