Scotia Securities Inc. today announced that as a result of the elimination of the foreign content limit in registered plans, the Scotia RSP funds will be merged with their corresponding non-RSP Scotia mutual funds.

Unitholders of an RSP fund will exchange their units for units of the applicable corresponding fund on a dollar-for-dollar basis. This exchange will be considered a disposition by unitholders of units of the RSP funds at their current net asset value and may trigger a capital gain or loss for tax purposes. However, as the RSP funds were designed for investment through registered plans, the mergers should not trigger any tax liability for most unitholders.

Scotia intends to complete the mergers by December 9. Purchases of units of the RSP funds, including purchases under pre-authorized contribution plans, will be suspended on or prior to October 29.

Unitholders have the right to redeem units of the RSP funds up to the close of business on the day immediately preceding the merger date. Pre-authorized contribution plans and automatic withdrawal plans which were established using the RSP funds will be continued using the appropriate corresponding fund, unless unitholders advise otherwise.

“The removal of the 30% foreign content limit for RSPs creates a great opportunity for Canadian investors to increase their direct foreign content exposure,” said Karen Fisher, managing director and head of retail investments, Scotiabank, in a release.