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Would CIBC cover Simplii if Simplii failed?
February 3, 2022
9:21 pm
Loonie
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Simplii is part of CIBC and is covered by CIBC's CDIC insurance.
If you had, let's say 500K at Simplii, and the Simplii division failed, would CIBC cover the extra 400K somehow or could they just let Simplii fail? I have assumed they would be liable for it, but am now wondering if that's right.

February 3, 2022
9:27 pm
HermanH
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I believe that CIBC would be responsible for all Simplii losses. I think that if CIBC had a branch office and named it 'Simplii', it would be the same case. AFAIK, Simplii is wholly owned by CIBC (not a franchise or any other such ownership entity.)

February 3, 2022
9:38 pm
Norman1
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The legal relationship is closer than that.

Simplii Financial is CIBC legally. Simplii is just a marketing brand used by CIBC.

One's Simplii branded account is legally a CIBC account. It isn't possible for Simplii to fail without CIBC failing.

February 3, 2022
9:45 pm
Loonie
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Thanks for the clarification.
That's what I had thought, but it wasn't as clear in my mind.

February 3, 2022
10:13 pm
Norman1
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It is clearer when one looks at the legal Simplii account agreements.

One party of the agreement is the client:

"You" and "your" mean the Simplii Financial client.

The other party is CIBC or another CIBC group company (like CIBC Securities Inc. for the Simplii Invest branded mutual fund accounts):

"We," "us" and "our" mean Canadian Imperial Bank of Commerce, and any member of the CIBC group of companies that provides you with a Simplii Financial product or service.

February 3, 2022
11:30 pm
Loonie
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Yes, that makes it clear that one's deal is with CIBC and no other.

February 4, 2022
3:04 am
Bruford
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So if I had $100K at CIBC and $100K at Simplii, only $100K in total is covered by CDIC?

February 4, 2022
3:50 am
Kidd
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Bruford said
So if I had $100K at CIBC and $100K at Simplii, only $100K in total is covered by CDIC?  

I'm no expert, but NO. Both 100ks are covered by cdic.

Look at the bigger picture. If the cibc came into question... in a default position, financially stressed to the point where help from the cdic was required? Canada as a country would be finished. SO, it wouldn't really matter. All your money would be worthless.

(You know, I've never considered canada a real country. We're more like that piece of land where they built the pig manure plant.) The Ukraine wants canada to send weapons of war? we can't make dog food.

February 4, 2022
4:40 am
Bill
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Correct, Bruford. Simplii is a just another name CIBC does business under. You'll find no CDIC listing for Simplii.

February 4, 2022
5:28 am
savemoresaveoften
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Loonie said
Yes, that makes it clear that one's deal is with CIBC and no other.  

Kidd said

I'm no expert, but NO. Both 100ks are covered by cdic.

Simplii is a marketing name NOT a bank. If u have 100k at both Simplii and CIBC, only 100k total is covered. If you look at Simplii's transit, its CIBC and just a transit# under CIBC. Simplii fails means CIBC fails.....

This is different from Tangerine setup where Tangerine is a separate legal entity from Scotia Bank. If you have 100k in each, both are covered.

February 4, 2022
9:37 am
Kidd
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Bill, SaveMoreSaveOften.

Years ago, the TD bank were asked about their cdic limits. Because the TD bank have many different investment departments. example TD bank, TD trust and whatever other names they use. a cdic claim would be made from each individual department.

meaning if you had 200k at TD bank. your claim would automatically be from td bank and td trust, giving you full 200k coverage.

February 4, 2022
9:58 am
Kidd
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added edit to post 11.

cdic td bank link. https://www.tdcanadatrust.com/products-services/index.jsp

The following TD Bank Group entities are CDIC member institutions
The Toronto-Dominion Bank
TD Mortgage Corporation
TD Pacific Mortgage Corporation
The Canada Trust Company

td bank explained, to cover your deposits, a 100k claim could be made from the above. to give you more than the 100k limit

February 4, 2022
10:31 am
Norman1
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Not true.

A deposit is only covered by the CDIC coverage of the CDIC member that issued it. It is not covered by the coverage of other CDIC members that happen to be in the same corporate family.

If one has $200,000 of deposits issued by TD Bank, then the deposits are only covered by the CDIC insurance of TD Bank. The deposits are not covered by the CDIC insurance of CDIC members TD Mortgage, TD Pacific Mortgage, or Canada Trust.

One needs to divide the $200,000 of deposits among the four CDIC members in the TD Bank group to have coverage from the four separate CDIC coverages.

February 4, 2022
10:44 am
AltaRed
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Agree with Norman1. If one has $100k in TD Bank and another $100k in TD Mortgage, they are each covered for $100k... but you cannot have $200k in TD Bank and think TD Bank and TD Mortgage each cover $100k of that. It matters which entity your deposits are at.

TD has 4 separate CDIC insured entities. https://www.cdic.ca/your-coverage/list-of-member-institutions/

February 4, 2022
10:44 am
HermanH
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savemoresaveoften said Simplii is a marketing name NOT a bank. If u have 100k at both Simplii and CIBC, only 100k total is covered. If you look at Simplii's transit, its CIBC and just a transit# under CIBC.

I think you mean the Institution number is the same for Simplii and CIBC (010). The transit numbers differ between Simplii and the various branches of CIBC. This sameness in institution numbers and difference in transit numbers is plainly evident if anyone tries to create an external link to Simplii and CIBC.

February 4, 2022
11:43 am
savemoresaveoften
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HermanH said

savemoresaveoften said Simplii is a marketing name NOT a bank. If u have 100k at both Simplii and CIBC, only 100k total is covered. If you look at Simplii's transit, its CIBC and just a transit# under CIBC.

I think you mean the Institution number is the same for Simplii and CIBC (010). The transit numbers differ between Simplii and the various branches of CIBC. This sameness in institution numbers and difference in transit numbers is plainly evident if anyone tries to create an external link to Simplii and CIBC.  

thats right, Simplii is institution# 010 which is CIBC. I just said it to mean Simplii is a transit# under CIBC, as in like a branch.

February 4, 2022
12:06 pm
Loonie
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It's true that the big banks all have several different entities, each with its own insurance. However, not all products are available from all of them.

February 4, 2022
1:17 pm
AltaRed
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Loonie said
It's true that the big banks all have several different entities, each with its own insurance. However, not all products are available from all of them.  

Agreed. In many cases, it is only via GICs and often only via brokers rather than directly with the issuer.

February 4, 2022
1:34 pm
Bill
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Kidd, those 4 TD entities are not "departments", they are in fact separate corporations, i.e. separate legal persons, each with its own $100K CDIC limit, can't "borrow" more limit from Corp B if your deposit is with Corp A even if the names are similar or part of the same corporate grouping. Words like division, department, corporation, etc have specific meanings, they are not interchangeable.

February 4, 2022
7:07 pm
Doug
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Loonie said
Simplii is part of CIBC and is covered by CIBC's CDIC insurance.
If you had, let's say 500K at Simplii, and the Simplii division failed, would CIBC cover the extra 400K somehow or could they just let Simplii fail? I have assumed they would be liable for it, but am now wondering if that's right.  

Absolutely 100%. Simplii Financial is essentially a virtual banking branch of CIBC. It is akin to the Kelowna branch of CIBC, or the Markham branch of CIBC. In this way, Simplii Financial could not fail without all of CIBC failing.

In situations like these, I prefer to K.I.S.S. 🙂

Cheers,
Doug

Disclosure: I am not a CIBC customer/depositor, but I do continue to hold CIBC common shares. I have never sold a CIBC common share since purchasing them in 2008.

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