5-9121305
Dear Sirs:
Re: De-listed shares as investments for an RRSP
This is in reply to your letter of June 5, 1991 pertaining to the eligibility of shares as qualified investments for an RRSP after they have been de-listed from a prescribed stock exchange in Canada.
As recounted by you in your letter, during our telephone conversations of May 22,1991 (Harding/19(1)) we advised that in our opinion the shares of a corporation which are de-listed from a prescribed stock exchange will continue to be qualified investments for an RRSP for so long as the corporation remains a "Public corporation" as that term is defined in subsection 89(1)(g) of the Income Tax Act (the "Act") and the shares do not otherwise become non qualified.
We stated at that time that this conclusion resulted from the provisions of subparagraph 89(1)(g)(iii) which provides that a corporation which was a Public corporation at any time after June 18, 1971 will continue to be a corporation until such time as it has elected or been designated not to be a public corporation pursuant to either clause 89(1)(g)(A) or (B).
The Department's Interpretation Bulletin IT 391 (copy enclosed) as referred to by Mr. Day of the Vancouver District Office discusses, in general, how a corporation may become a Public corporation by listing of its shares, by election or by designation and also notes that a corporation may in certain cases elect not to be a Public corporation. The bulletin, however, does not discuss in any depth what results will occur on the de-listing of shares and in that regard is not entirely clear. We have therefore taken this opportunity to refer this issue to our Publications Directorate for their consideration when they issue any revisions to the Bulletin.
We trust that this explanation of our position is satisfactory to your needs and apologize for any inconvenience that may have been occasioned to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch