There are too many instances in the market today where it is thought that Segregated Funds and Mutual Funds are similar investment vehicles. At L&T Canada, we recognize that trying to fit the Segregated Fund products into a Mutual Fund Administration System is like trying to fit a square peg into a round hole. The Segregated Fund square peg does not fit into the round hole of the mutual fund administration model.
Segregated Funds and Mutual Funds are fundamentally different in terms of their legal structure and how they are taxed. The allocation of fund income and retention of income character when allocated to interests in Segregated Funds is fundamentally different from how the character of fund income is converted to dividend income and distributed under mutual funds. The distinctions are quite real, with the result that using mutual fund tax logic for segregated funds is very incorrect, and we recognize that.
Unitrax is built to allow for both Segregated Fund policies and Mutual Fund Accounts and contains environment level configuration rules to allow each client to determine the types of funds and the rules they will follow.
Unitrax contains modules that strictly adhere to the different Tax, Legislative, and Business rules for each product.
There are specific modules that correspond to TFSA, RRSP/RRIF/LIF, RESP, and RDSP. Each module is designed to meet the reporting requirements outlined by ESDC (where applicable), CRA and other regulatory bodies.
All Registered products can use either Segregated Funds or Mutual Funds as their investment vehicles and Unitrax will automatically be able to pick up the correct "rules" to apply to the product based on the investment vehicle.
Through thought partnership we distribute overview documentation on a monthly basis providing industry, regulatory and project updates as well as conduct monthly meetings with our clients to ensure that their business needs are met through a collaborative solution.
L&T Canada’s compliance team also participates in many IFIC and CLHIA groups/sub-groups around the Registered Products and other regulatory issues discussions.