Many people may not be familiar with Self Directed RRSPs (SD RRSPs) and how they may be used to supplement and complemented the more commonly used RRSP. While there are similarities to RRSPs, there are also significant differences, and understanding these is important in utilizing an SD RRSP to its best advantage.

A Self Directed Registered Retirement Savings Plan (SD RRSP) is a trust in which the Annuitant may hold investments that have not been specifically registered with CCRA for eligibility in an RRSP. These include: public securities; mutual funds; labour sponsored funds (WOFA in British Columbia; as well as shares in Canadian Control Private Corporations. In the latter case, a strict set of rules defines what CCPC shares may be held in an SD RRSP.

A B.C. VCC is a special corporation incorporated in British Columbia under the Small Business Venture Capital Act. It is a "specified security" in the Income Tax Act as qualifying for holding in an SD RRSP or SD RIF. For more information on BC VCCs and a description of the British Columbia 30% Tax Credit provided for investing in BC VCCs see the Equity Capital Program ("ECP")

Securities of wholly owned subsidiaries of public companies also qualify for holding in SD RRSPs and SD RIFs. This includes the bonds of Cinemage Leasing Inc

Securities can either be contributed to an SD RRSP, or they can be purchased by the SD RRSP or SD RIF directly. For more information see the Newsletter from Davidson & Company, Chartered Accountants.

Current SD RRSP & SD RIF Eligible Offerings

NetEquity Capital Partners is currently offering the following RRSP and RIF eligible products:

While securities may be qualified by CCRA for inclusion in an SD RRSP or SD RIF, trustees may also stipulate additional requirements for their inclusion in their trust program. A common restriction is that the SD RRSP also hold $50,000 in liquid securities.

Business Associates Who Handle SD RRSP & SD RIF Transactions NetEquity has found the following most accommodating of SD RRSP transactions, and has worked with them extensively. Olympia Trust is based in Calgary, and has positioned itself in the market to deal specifically with SD RRSPs and SD RIFs. Canadian Western Trust is based in Vancouver and has some additional services to provide clients. CWT will not however hold private securities in SD RIFs, and for RRSPs - other than for VCCs which it accepts openly - requires that private securities be sold to the client only through a Registered Representative, such as a broker or Mutual Fund dealer. If the security is sold directly by the Issuer or an unregistered but fully qualified Agent, in full compliance with securities regulation, CWT will not accept the security into its trust accounts. B2B Trust offers a diversity of services including SD RRSPs and RIFs. Restrictions are similar to Canadian Western Trust, excluding the Registered Representative restriction. Trust facilities are located in Toronto and Montreal, which is not quite as convenient as dealing locally. Should you have existing RRSPs and RIfs with other trustees, we have successfully placed our products with many other trustees. Each has its own documentation requirements and procedures, and must be consulted individually.

Documentation For SD RRSP & SD RIF Transactions NetEquity Capital Partners is prepared to assist interested investors with the creation of RRSP accounts, the purchase of securities by SD RRSP holdings, or the contribution of securities to SD RRSPs. Similar but usually slightly different documentation is required by each Trustee.

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