Briefly:

(November 18, 2005) RBC Insurance has teamed up with The Edge Benefits to offer The Edge Critical Illness Plan, promising to provide simplified and enhanced coverage options.

“With easier qualification and increased flexibility for our base and builder coverage, clients can focus on recovery from their illness while receiving financial assistance in meeting the additional costs,” said John Young, president and CEO of RBC Life Insurance Company.

The plan is offered as an individual insurance policy and ensures base coverage when the applicant satisfies nine qualifying questions, without the requirement of a medical examination. It covers cancer, heart attack, stroke, coronary artery bypass surgery, major organ transplant, occupational HIV, kidney failure, aortic surgery, heart valve replacement.

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OSC finds Nepean man in violation

(November 18, 2005) The OSC has found a Nepean-based registrant to have participated in a scheme promising investors access to funds in locked-in RRSPs, in violation of the Securities Act and Rule 31-505.

From approximately August 1998 to June 2001, Brian Verbeek participated in schemes, organized by various promoters, whereby advertisements were placed in newspapers throughout Ontario and other provinces to attract clients. The advertisements offered “fast financial assistance” to persons wishing access to funds in their locked-in Registered Retirement Savings Plan.

He processed more than 670 transactions in excess of $17 million while registered with Fortune, Dundee and Buckingham.

The commission has concluded its sanction hearing on the case, but reserved a decision on whether Verbeek should be allowed to file written submissions until next week.

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Ontario’s export sales to remain stagnant, says EDC

(November 18, 2005) There will be no growth in Ontario’s export sales in 2005, says Export Development Canada, following a 6.7% expansion rate in 2004.

“Exports of energy and industrial goods will account for much of Ontario’s growth in the near term,” said EDC chief economist Stephen Poloz. “But falling shipments of autos, consumer goods, forestry products and transportation equipment will be the main drags on the headline figure.”

Growth will pick up moderately next year, the EDC expects, to 2%, thanks to a rise in auto exports, which are off 4% this year, due to high gas prices and rising interest rates.

Canadian export volumes are forecast to grow by 4% in 2006 following a modest 1% appreciation in 2005.

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Poll points to support for trust sector

(November 17, 2005) Nearly two-thirds of Canadians believe slapping new taxes on income trusts is a bad idea, according to a poll conducted for the Canadian Association of Income Funds.

Ottawa announced consultations on the income trust sector in September, a move that brought howls of protest from Bay Street and effectively stalled the trust market. According to IFIC, net redemptions in income trust mutual funds reached $190 million in October.

According to the Ipsos Reid survey, 66% of Canadians agreed that new taxes on trusts would be a “bad idea because the government is unfairly changing the rules on investors, including retirees and pensioners, who made investment decisions based on the previous rules.” Seventeen percent felt that taxing trusts would be a good idea.

And some Canadians seem to be connecting the recent falloff in the trust market and Ottawa’s consultation process. One-third said the drop in the value of income trust investments, “was caused mostly by statements from the Minister of Finance about the changing tax treatment of income trusts.”

However, just under half (46%) feel the decline was caused by economic forces. Only about one-quarter of households surveyed owned income trust units.

The random survey was conducted between November 8 and 10 and involved 1,000 adult Canadians. The results are considered accurate to within 3.1 percentage points, 19 times out of 20.

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How firms dealt with the rising dollar

(November 17, 2005) About half of Canadian firms surveyed by the Bank of Canada say they were adversely affected by the loonie’s meteoric rise in 2003 and 2004. About one-quarter reported a favourable impact and the rest said there was no effect.

The majority of firms who were negatively affected had significant export sales, often priced in U.S. dollars, the survey found, and tended to be in the manufacturing sector. Those that benefited were largely in retail and wholesale trade and in transportation.

The survey adds that some adversely affected companies resorted to cost-cutting before moving on to measures that required significant changes to their operations. “However, many firms chose to do nothing because demand for their products remained strong despite the appreciation.” Fully one-third of those surveyed said they had no plans to respond to the loonie’s jump.

The Canadian dollar appreciated by about 25% relative to the greenback over a two-year period, rising from 65 cents US in January 2003 to more than 82 cents US in January 2005.

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United appoints new sub-advisor for pool fund

(November 17, 2005) United Financial, the investment management division of Assante, has appointed QVGD Investors as the new sub-advisor for the Canadian Equity Small Cap Pool, included in both Optima Strategy and Private Client Managed Portfolios.

QVGD has been selected for its successful track record, disciplined investment management philosophy and the team’s extensive experience in Canadian small cap management, United said in a release.

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AGF boosts due diligence on Harmony

(November 17, 2005) AGF has announced the appointment of Wilshire Associates to act as an independent third party in conducting due diligence for its Harmony wrap program.

Wilshire’s responsibilities will include portfolio construction, manager search and selection, performance monitoring, conducting annual reviews as well as product innovation and marketing support.

“The due diligence process will remain a competitive advantage for Harmony, employing the same level of analysis in all aspects of due diligence,” said Randy Ambrosie, Executive Vice President, Sales and Marketing, AGF Funds. “As the managed accounts industry grows and advisors face more competition, AGF is committed to making Harmony one of the best programs in the industry.”

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Receiver appointed for Argentum funds

(November 17, 2005) Regulators in Ontario and Quebec have secured a court order appointing A. John Page and Associate as receiver/manager for Argentum Management and Research and its family of mutual funds.

The appointment authorizes the receiver to take control of all assets and to preserve any documents belonging to Argentum.

Two of the Argentum funds ceased distribution in March 2004, and a third ceased distribution in March 2005. “At present, material assets of the funds are located in Ontario, as are a significant number of investors in the funds,” the Ontario Securities Commission says.

“The appointment of the receiver protects the interests of unitholders by ensuring an orderly and transparent process for the collection, preservation, interim management and distribution of assets.”

Argentum was hit with a cease trade order and its funds were frozen in September.

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Brown to rejoin law firm

(November 16, 2005) Former chairman of the OSC David Brown will return to the Toronto law firm Davies Ward Phillips & Vineberg LLP, as of December 1.

“In his role as counsel to the firm, David will offer strategic counsel to members of the firm and clients alike with respect to a variety of complex matters,” said William O’Reilly, managing partner at Davies. “His experience at the OSC, his domestic and international policy perspective, as well as his years of private practice, will be an invaluable resource. David will also play an important leadership and mentoring role in our internal professional development program.”

Prior to his seven-year stint at the OSC, Brown was a senior partner at the law firm, with more than 29 years of experience in major corporate and commercial matters. His focus had been on mergers & acquisitions, corporate finance and corporate reorganizations.

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AMF assumes control of Quebec insurer

(November 16, 2005) Quebec’s financial regulator, l’Autorité des marchés financiers (AMF) has assumed provisional administration of the insurer La Vigilance, société de secours mutuels, as of November 15 and for a term of 7 days.

According to a press release from the AMF, the company’s finances have deteriorated to “an unsatisfactory position” after posting a net loss last year. The AMF also cites investments prohibited under the provincial insurance law and “management practices inconsistent with sound and prudent management practices.”

The AMF must, within the shortest time possible, present a complete report of its findings to the Minister of Finance, together with its recommendations.

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GMP sets conversion terms

(November 16, 2005) GMP Capital has set a limit on the number of common shares in the firm which can be exchanged for Class B limited partner units of Griffiths McBurney L.P., setting the maximum at between 12 million and 13 million. GMP is planning to convert itself from a corporate structure to an income trust.

Shareholders may exchange their shares for either two units of the trust plus a cash payment of $1.00, or two Class B limited partner units of Griffiths McBurney L.P. and a cash payment of $1.00.

The conversion, still subject to shareholder and regulatory approval, will be completed on or about December 1, 2005.

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Arrow launches U.S. long/short fund

(November 16, 2005) Arrow Hedge Partners has announced the launch of the Arrow Elmwood Fund, a US long/short equity fund advised by Elmwood Capital. The fund will invest in US small and micro cap stocks whose products and services are intellectual property driven.

“We believe the market is entering another cycle of technology investing and we see compelling opportunities over the next 5-10 years that investors should take advantage of,” says Rick Serafini, lead portfolio manager at Elmwood.

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YMG confirms discussions

(November 15, 2005) YMG Capital Management has confirmed that it is in discussions with a third party regarding a possible transaction. In a brief statement, the investment manager said no further comment would be issued “unless the situation warrants.”

YMG’s shares have been heavily-traded recently on speculation the firm could be sold or involved in a merger. Stock market regulators issued a 45-minute cease-trade order on Tuesday morning as YMG’s statement was released.

Founded in 1983, YMG has more than $15 billion in assets under management.

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CPPIB commits $400 million to private equity

(November 15, 2005) The CPP Investment Board announced today that it is committing $400 million to the Canadian private equity and venture capital market. The board is spending $250 million on a Canadian small and middle market buyout fund of funds and $150 million on a Canadian venture capital fund of funds.

Both funds will be invested and managed by TD Capital Private Equity Investors.

“We are continuing to grow and diversify the private equity portion of the CPP reserve fund and increasing our commitment to the Canadian buyout and venture capital industries is part of this process,” said CPPIB vice-president Mark Wiseman. “We believe the combination of working with external managers while building internal capabilities will continue to be an effective approach.”

The CPPIB’s private equity commitments now total about $10 billion.

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Commodity rally continues, for now

(November 15, 2005) Despite another record-setting month for commodity prices in October, the long-running rally may soon become a victim of the sector’s success, according to a BMO Economics report.

“Higher prices are expected to slow demand growth and encourage increases in production of several commodities, relieving market tightness,” said Earl Sweet, assistant chief economist, BMO Financial Group. “However, performance amongst commodities is likely to be mixed.”

Price increases in energy, mineral and agricultural commodities helped boost the BMO Financial Group Commodity Price Index higher by 2.8% in October, countering a 1.9% decrease in forestry product prices. Oil and gas prices rose 5.1%, based almost entirely on a price spike in natural gas prices, while the agricultural sub-index rose 4.9%, fueled by higher global demand for wheat. The overall index has doubled since 2002.

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RBC teams up with CI on new notes

(November 14, 2005) RBC Financial Group and CI Investments have banded together to launch the new RBC CI Multi-Callable Deposit Notes, Series 1.

The notes provide 100% principal protection and have the potential for two distinct returns. If RBC calls the notes during any of four call periods over the six-and-a-half year term, the investor may receive 7% minimum simple annual return. If the notes make it to maturity, they will receive the full growth percentage of the basket at maturity date.

The issue price is $100 per note, with a minimum investment of $1,000 and a selling concession of 4%. The first call period runs from July 4, 2006 to January 4, 2007 and will be exercised at $107.00. The remaining call periods are between October 4 and April 4, each year through 2010, and exercisable at $115.75, $122.75 and $129.75 in each respective year.

The notes, which are being managed by CI’s Signature Advisors and marketed by Skylon Advisors, are trying to tap the market’s current distaste for low interest rates and the uproar over the federal government’s income trust consultation. “The Multi-Callable Notes are ideal for investors looking for alternatives to low-paying GICs or volatile income trust structures,” says David McBain, senior vice-president of CI and president of Skylon.

The notes are linked to the select Canadian, high income, dividend and corporate bond Signature funds. They are RRSP eligible and available until December 23, 2005.

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RBC rebrands Dain Rauscher

(November 14, 2005) After 96 years the name Dain Rauscher is being erased from the securities world after RBC Financial Group announced it is changing the name of its U.S. division to RBC Capital Markets.

The rebranding of its U.S. fixed income arm is designed to eliminate confusion and further integrates the Minneapolis-based operations of Dain Rauscher into RBC, which it acquired in 2001. The move is part of a plan the bank initiated more than a year ago.

The unification of RBC Capital Markets’ businesses is expected to increase client access to offerings such as credit and a wider array of investing products. RBC Capital Markets is the name under which RBC Financial Group conducts investment banking, institutional sales and trading throughout the world.

“The rebranding recognizes that we are one team, with one name, continuing to build a fixed-income powerhouse,” says Richard Pilosof, head of Global Debt Markets for RBC Capital Markets in a release.

RBC is the leading underwriter for municipal bond issues in the U.S. and is the fourth largest financial advisory practice in the nation.

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Omissions cost TD Waterhouse $20,000

(November 14, 2005) TD Waterhouse Canada has agreed to pay the British Columbia Securities Commission $20,000 after admitting to trading securities that were under cease trade orders.

The investment dealer executed trades on behalf of clients in the securities of Moneta Porcupine Mines and Stratcomm Media. The two companies have been under cease trade orders since September 1990 and November 2000 respectively.

Back in 2001, TD was one of a group of investment dealers that reached a settlement with the BCSC to create a system to prevent registrants from executing client trades of securities under cease trade orders. This resulted in TD creating its own cease trade order database in 2002, but in 2004 it discovered that Moneta and Stratcomm were inadvertently omitted from the list.

The failure in the system allowed clients to execute trades in the two companies since late September 2002.

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