December 1, 1989
Dear Madam:
This is in reply to you letter of September 22, 1989.
You ask us to confirm that a unit of a Canadian redeemable unit trust represents a "marketable security" for the purposes of subparagraph 108(2)(b)(iii) of the Income Tax Act ("the Act") and the definition of "pooled fund trust" in subsection 5000(7) of the Income Tax Regulations (the "regulations"). By "Canadian redeemable unit trust", we presume you refer to a "unit trust" as described in subsection 108(2) of the Act. You further ask us to indicate what Revenue Canada has previously indicated are marketable securities for the above purposes.
Generally speaking, it is our view that for the above-stated purposes, a marketable security is a security for which an established market exists through which the security may be freely traded. While this characteristics could exist with respect to a particular unit in a unit trust, whether or not it does exists is a question of fact.
We have previously expressed the view that stock futures, bond futures and commodity futures would normally represent marketable securities for the above purposes.
We trust the above comments will be of assistance.
Yours truly,
for Director Financial Industries Division Rulings Directorate