The AMF does not, however, guarantee all deposits received by registered institutions. These exceptions include:
- Deposits with a term in excess of five years, unless they are repayable, at any time, on demand by the depositor, after five years from the date of the deposit;
- Deposits made or payable in a currency other than Canadian;
- Deposits held outside Québec or only payable outside Québec;
- Funds used to acquire shares in a financial services cooperative;
- Funds used to acquire shares in a mutual fund.
In addition, certain securities available at registered institutions are not guaranteed by the AMF. These include:
- Equity sharesA company’s equity comprises share capital and retained earnings.
Equity can be determined by subtracting a company’s liabilities from its assets. This is what belongs to the company’s owners once all liabilities have been deducted. ;
- Mortgage-backed securitiesA mortgage-backed security is a type of security tied to a mortgage.
A mortgage loan (a loan secured by a mortgage) is a mortgage-backed security. ;
- BondsA bond is a security issued by governments and companies through which an investor lends money to the issuer.
In general, the government or company promises to pay the investor interest at a fixed rate and at certain intervals (for example, 2% per year). Interest is normally paid twice a year. At maturity, the government or company pays back a predetermined amount that is called the face value. The face value is usually $1,000.
There are several types of bonds:
Real return bond
- DebenturesA debenture is a fixed-income investment, similar to bonds, except that debentures are generally not backed by specific assets. Also called unsecured bond. issued by governments, municipalities and corporations;
- Treasury billsA treasury bill is a short-term investment guaranteed by a government. It reaches maturity within a year at most. At maturity, the government pays out a greater amount than the amount invested..
Paul made the following deposits with an institution registered with the AMF:
|Amounts deposited (including accrued interest)||Amount guaranteed|
Five year term deposit
Seven-year term deposit
Shares in mutual fund