| 24(1) | 900881 |
| D. Duff | |
| (613) 957-3498 | |
| Attention: 19(1) | EACC9380 |
July 27, 1990
Dear Sirs:
This is in reply to your letter of May 14, 1990 regarding investments in pooled fund trusts.
You asked for a technical opinion on whether an investment by one pooled fund trust in another pooled fund trust would be an investment in a marketable security per clause 5000(7)(a)(i)(A) of the Income Tax Regulations (the "Regulations") and whether the income derived therefrom would be included in the 95% requirement in the definition of pooled fund trust in subsection 5000(7) of the Regulations. Furthermore we are to assume that the second pooled fund trust is a unit trust, but not a mutual fund trust and is held either by numerous investors or only by members of a particular group Registered Retirement Savings Plan.
It is a question of fact whether such an investment is a marketable security. Generally, where a particular investment is capable of reasonably prompt conversion into cash and can easily be traded because a ready group of buyers exists and there are no legal or other impediments to the sale, the investment could be considered a marketable security.
We trust our comments will be of assistance.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate