The Canadian Investor Protection Fund and the China Securities Investor Protection Fund Co., Ltd have entered into a memorandum of understanding on Tuesday addressing cross-border cases involving brokerage firm insolvencies affecting clients of their respective member firms. Canada is the first country to enter into an MOU with the SIPF.

The MOU details the level of co-operation when dealing with investor claims for compensation as a result of cross-border insolvencies of member firms. It also encourages the exchange of information on a regular basis regarding the nature, role and experience of the two organizations.

“The CIPF and the SIPF recognize the potential for cross-border insolvencies of their respective member firms and the prospect of cross-border claims from investors,” said Rozanne Reszel, president and CEO of the CIPF. “Through this memorandum of understanding, both parties acknowledge their willingness to co-operate with each other to ensure that investors receive compensation promptly. Given the global nature of the investment industry, we believe that working collaboratively with our counterparts around the world contributes to the security and confidence of the investing public.”

CIPF has now entered into three such MOUs with securities protection funds around the world including the Securities Investor Protection Corp. in the U.S and the Financial Services Compensation Scheme in Britain.

“This first MOU of SIPF witnesses the great significance attached to promoting international co-operation and exchange work for SIPF,” said Zhang Yafen, vice chair of SIPF. “Under this MOU, both CIPF and SIPF will form a long-term and stable co-operative relationship, which will create a framework and platform for information sharing, personnel exchange and related consultation.

“Moreover, this MOU will also lay a foundation for both institutions’ further co-operation and thus promote each other’s investor protection work. It is hoped that in signing this MOU, both institutions will enjoy a common development on the basis of mutual complementarity and learning from each other,” she added.