February 13, 1992
Registered Plans Division Financial Industries
S. Kotlar, Director Division
D. S. Delorey
957-8953
Attention: Mrs. Sally Wilson
7-920401
24(1)
This is in reply to your Round Trip Memorandum of February 6, 1992 and further to our (Delorey/Wilson) telephone conversation concerning an enquiry you received from 24(1)
More particularly, 24(1) is concerned as to whether or not the grandfathering in subsection 8514(3) of the Regulations would be lost where the
24(1)
Such a share-for-share exchange is a disposition/acquisition. The Plan would thus be acquiring, after March 27, 1988, shares of the capital stock of a person connected with an employer who participates in the plan. It is therefore our view that the Plan would be acquiring a prohibited investment to which the grandfathering rule in subsection 8514(3) would not apply.
We note the statement in your acknowledgment letter to 24(1) that this Division would be replying to them directly. It is the practice of this Directorate to provide opinions to clients on specific transactions only where the transaction is proposed and the enquiry is submitted in the manner set out in Information Circular 70-6R2. We therefore would prefer that you reply to 24(1)
for Director
Financial Industries Division