Briefly:

(December 2, 2005) The IDA has suspended the membership of iForum Securities. At the same time, the AMF, Quebec’s securities regulator, announced that some of the firm’s assets have been sold.

According to the AMF, Industrial Alliance Securities has been successful in its bid for some assets of iForum. A joint bid by Quadrus Investment Services and Great-West Life Assurance was also accepted.

In November, Quebec financial regulators moved against iForum and Mount Real, alleging that 800 investors had been sold $65 million in unregistered and potentially worthless promissory notes.

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CRA announces interest rates for late tax filers

(December 2, 2005) CRA has released the interest rates that will apply to overdue taxes, CPP contributions and employment insurance premiums for January 1 to March 31, 2006. Overdue taxes will be charged 7% while the interest rate the government will pay on overpayments will be 5%.

The rate used to calculate taxable benefits for employees and shareholders from interest-free and low-interest loans will be 3%.

Overdue remittances on the GST, the harmonized sales tax and the air travellers security charge will be charged 2.4333%. Taxpayers who overpaid will be reimbursed at the same rate. The excise tax (non-GST) and the excise duty (except brewer licences) will be assessed at 7%, whereas overpayment of these taxes will be paid out at 5%.

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Panel completes research on single regulator

(December 2, 2005) The Crawford Panel on a singe Canadian securities regulator has wrapped up research and plans to present a discussion paper in Winnipeg next week.

The panel of corporate board members, current and former pension plan executives, lawyers and academics was established by Ontario government ministers in May 2005 and charged with the task of recommending a model for a common securities regulator, with a common body of securities law and a single fee structure.

Purdy Crawford, panel chair and legal counsel at Osler, Hoskin & Harcourt LLP will present the discussion paper next Thursday, December 8.

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Scotiabank appoints VP of information security

(December 2, 2005) Scotiabank veteran Kim McKenzie has been appointed to the position of executive vice president of Scotia intek, the company’s technology network. McKenzie, the former senior vice president, international banking systems, will oversee information security for all areas of Scotiabank.

Scotia intek provides technology infrastructure, network and communication design and support, application development and maintenance, and item processing

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Advisor reprimanded by BCSC

(December 1, 2005) A B.C. mutual fund salesperson has been banned from trading anything other than funds for three years after admitting to breaching know your client and suitability rules by recommending leveraged investments to clients.

Martin Raymond Hall will also be subject to strict supervision by his dealer for at least 12 months.

Hall was a registered salesperson at Foresight Capital from January 7, 1999 to July 3, 2002. During his employment at Foresight, Hall recommended to two clients that they purchase mutual funds using money borrowed against the equity in their homes.

The British Columbia Securities Commission said the clients had some or all of the following characteristics: low to average net worth, little or no investment experience, limited income and low risk tolerance.

The regulator said it decided against a sanction amount of $20,000 which would normally be required in such cases, since Hall has proven that he cannot pay the fine. He invested personally in the leveraged investment and lost about $40,000.

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Retirement income knowledge lacking: survey

(December 1, 2005) Three-quarters of Canadians do not know how much a typical government retirement pension is worth, according to a survey conducted by TriDelta Financial Partners.

TriDelta asked 500 Canadians: “How much do you think a 68-year-old who has lived and worked in Canada their whole life, and with an income of $55,000 in the current year, would earn annually in government pensions?” Seventy-five per cent did not know the correct answer: $15,600.

Only 18% of respondents were “very confident” that they were on track to meet their retirement goals. And even those who said they were “very confident”; 74% could not answer the retirement pension question.

According to Statistics Canada, government pension makes up more than 50% of retirees income for those 65 and older. For women over 65, it represents more than 65% of their income.

“I was not entirely surprised by these results.” said Ted Rechtshaffen, president and CEO of TriDelta Financial Partners. “Despite a focus on retirement planning, there remains a profound lack of knowledge on the subject among the general public.”

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New name for CompCorp

(December 1, 2005) CompCorp, the organization that protects Canadian policyholders in the event of a life insurance company failure, is changing its name to Assuris.

“The new name was chosen to better reflect the organization’s role and promote stronger recognition of the organization among consumers,” the not for profit corporation, which is funded by the life insurance industry, said in a statement.

“In the event a member company becomes insolvent, a stronger corporate identity will make us more effective in responding to policyholders and reducing their level of concern about losing their life insurance benefits,” said Gordon Dunning, president & CEO of Assuris.

“The absence of an insolvency of a life insurance company in the last 11 years and the current stability of the life insurance industry make this an ideal time to introduce our new name and logo to consumers with virtually no disruptions to the industry,” he added.

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Altamira introduces U.S. dollar savings account

(December 1, 2005) Altamira is launching a U.S. dollar version of its popular high-interest savings account, the $U.S. High-Interest CashPerformer.

The new product, offering a rate of 3.25%, provides a short-term parking place for investors with U.S. savings, Altamira says, and can also be used as an alternative to U.S. savings accounts where funds can be held for future expenses or travel.

Altamira also announced today that it is raising the interest rate on the Canadian High-Interest CashPerformer to 2.75%. December 1 marks the one-year anniversary of the product, which now has assets of more than $2.5 billion.

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RBC to acquire Abacus Financial

(November 30, 2005) RBC has announced it is buying European wealth management business Abacus Financial Services for an undisclosed sum. The deal has been approved by regulators and Abacus shareholders.

“Abacus’ talent, expertise and reputation for client service makes this an excellent fit on strategic, cultural and economic factors,” said Michael Lagopoulos, President and CEO, Global Private Banking, RBC.

Abacus has offices in London, Jersey, Guernsey, Edinburgh, Cheltenham and Amsterdam. As a result of this transaction, RBC’s global private banking business increases its assets under administration by $41 billion US.

Paul Patterson, head of Global Private Banking for RBC in Britain, will oversee the integration of the combined group.

RBC also announced its fourth quarter earnings today, reporting a profit of $522 million, compared to $514 million during the same period last year.

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RESP dealers dole out $152 million

(November 30, 2005) Four Canadian RESP providers say they have delivered $152 million in education assistance payments to more than 73,000 post-secondary students over the past year. More than 110,000 new pooled plans were established during the year, according to the RESP Dealers Association of Canada, which includes C.S.T. Consultants, Children’s Education Funds, Heritage Education Funds and USC Education Savings Plans.

“These are very impressive figures, for sure,” said Paul Renaud, chair of the association. “But more importantly, they indicate that more and more Canadian families are having the wisdom to save for their children’s post secondary education.”

According to Statistics Canada, the national average of university tuition and fees is nearly $4,400 per student per year. Those costs could rise as high as $14,000 per year, when residence and other expenses are added, the association notes.

“An RESP may not cover the full expense of post-secondary education for a student, but it will certainly go a long way — and may well make the difference in whether a child proceeds to the next level or not,” says Renaud.

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Dundee Securities appoints new CEO

(November 29, 2005) Dundee Wealth Management has announced the acquisition of KL Nova Financial, and appointed Kym Anthony, a partner in KL Nova, to head up Dundee’s securities arm.

KL Nova was recently formed by Kym Anthony and Lawrence Haber to participate in Canadian capital markets and to create and develop investment products using structured finance and alternative asset management.

“When Don Charter and I learned what KL Nova had developed, we saw it as a natural fit for Dundee Wealth to accelerate our growth,” said Dundee Wealth president Ned Goodman.

Charter is stepping aside from his role as chief executive officer of Dundee Securities and will be replaced by Anthony, who will also lead Dundee Private Investors, the Dundee Insurance Agency, and Dundee Mortgage Services.

Lawrence Haber has been appointed as executive vice president for Dundee Securities and the affiliated firms mentioned above.

Anthony has many years experience in the capital markets, rising through the executive ranks at CIBC and CIBC Wood Gundy. He was also CEO of TD Securities and most recently, was president and CEO of National Bank Financial. Anthony is also a former chair of the IDA.

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Kirzner to chair investor advisory committee

(November 29, 2005) Eric Kirzner of the Rotman School of Management will chair the Ontario Securities Commission’s new Investor Advisory Committee.

The commission received 140 applicants for the 10-person committee, which also includes CARP’s William Gleberzon, forensic auditor Robert Goldin, lawyer John Hollander, information technology consultant Richard Manicom, Poonan Puri, associate professor of law at Osgoode Hall, financial consultant Kelly Rodgers, journalist Ellen Roseman, Whipple Steinkrauss of the Consumer Council of Canada as well as private investors Gloria Hutton and Pamela Reeve.

The IAC was established in response to commitments made by the OSC following a town hall meeting earlier this year. The committee will provide advice and guidance on any aspect of the OSC that has an impact on investors.

“We believe that direct investor input is critical to the health of Ontario’s capital markets and we are looking to the IAC to play a key role in our efforts to address issues of importance to retail investors,” said OSC chair David Wilson.

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>b>Bardswick to lead international insurance group

(November 29, 2005) Cooperators president and CEO Kathy Bardswick has been elected chair of the International Cooperative and Mutual Insurance Federation (ICMIF) for a four-year term.

The federation includes more than 400 insurance firms in 67 countries, who operate on the on the basis of the principles common to the cooperative movement.

Stock companies are also eligible for membership provided their stock is predominately owned by popularly-based organizations such as cooperatives or trade unions.

“ICMIF members from every corner of the world share common values. We are driven by long term objectives to add value for our policyholders and their communities,” says Bardswick. “Our shareholders expect solid financial performance as it relates to providing the financial wherewithal to be there long term for our policyholders. We have an economic and a social purpose.”

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Meritas appoints new sub-advisor

(November 29, 2005) (November 29, 2005) Socially responsible investing specialist Meritas Financial has appointed Davis Advisors as sub-advisor to the Meritas U.S. Equity Fund.

Davis, which already has several clients who employ social and environmental screens to their portfolios, will replace MMA Capital Management in January.

“We look forward to the contribution that we feel Davis can make to the fund,” said Meritas CEO Gary Hawton in a release. “Certainly their performance in the large capitalization blend U.S. equity asset class has been impressive.”

Over the past three years the $13 million fund had lost 3.5% versus a gain of 2.81% on the S&P 500 over the same period.

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Banks report higher profits

(November 29, 2005) Both the Bank of Montreal and Scotiabank today reported strong quarterly profits, earning $657 million and $811 respectively.

BMO’s profits were up 20% over the same time last year. Earnings came in at $1.27 per share, better than analysts had predicted, on revenue of $2.65 billion, up 16% from 2004.

“Operating results in the fourth quarter were up strongly from a year ago, notwithstanding higher provisions for credit losses and even after excluding certain significant items that increased earnings,” BMO president and CEO Tony Comper said in a release. “Each of our client operating groups enjoyed solid increases in net income, with business volumes up year-over-year.”

Scotiabank also delivered solid results in the quarter, with net income of $811 million, up 15% from 2004. Earnings per share rose to $0.80. For its fiscal year, Scotiabank made a record $3.2 billion profit.

“We had another year of record results and exceeded all of our 2005 targets,” said Scotiabank president Rick Waugh, President and CEO. “Our strategy of diversifying across three business lines — Domestic Banking, Scotia Capital and International Banking — combined with improvements in credit quality underpinned our strong results this year.”

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Ottawa must monitor trust decision, says IDA

(November 28, 2005) Ottawa has made the right choice by steering clear of new taxes on income trusts, says the IDA. At the same time, Finance Minister Ralph Goodale’s move to reduce corporate taxes may not produce the desired outcome, the brokerage industry association adds.

In a surprise move last week, Goodale said the federal government would reduce personal income taxes on dividends in an effort to level the playing field between corporations and income trusts.

“The market impact of the policy decision should be carefully monitored to assess its effectiveness,” says IDA senior vice-president Ian Russell.

The IDA’s submission on trusts, released today, suggests a more neutral tax system to ensure trusts are driven by economic rather than tax reasons. “The association had recommended in discussions with the minister the reduction of dividend tax rates in conjunction with lower corporate tax rates to achieve neutrality in the tax treatment between the corporate and trust structures.”

“The IDA does not view the taxation of trusts as a viable policy option.” The submission concludes.

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Dodge calls for more infrastructure investment

(November 28, 2005) Canada’s public and private sectors must work together to resolve the country’s “infrastructure deficit,” says Bank of Canada governor David Dodge.

In a speech today, Dodge said the timing was right for infrastructure investments, since governments are committed to the concept and the private market has an appetite for longer-term financial assets.

Pension and endowment funds are now allocating an increasing share of their portfolio assets to infrastructure investments, in an attempt to increase returns and better manage risk through portfolio diversification. Dodge said. “These funds are increasingly looking for longer-term assets that provide a better match to their liabilities. So far, much of this investment has gone to projects in other countries. This is partly because the domestic markets for public-private partnerships in these other countries are more developed than ours.”

“There is a pent-up need for those investments in Canada,” he said.

“The right infrastructure can support and encourage initiatives to increase productivity,” Dodge added. “Finding innovative and reliable ways to fund this country’s current and future infrastructure requirements is a key element of any effort to improve Canada’s productivity and raise living standards for Canadians.”

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CI completes Synergy fund mergers

(November 28, 2005) CI Investments has completed a series of fund mergers, mostly involving the amalgamation of Synergy-branded funds into CI offerings with similar mandates.

The six mergers, approved by investors last week, include the amalgamation of Synergy Canadian Fund into CI Corporate Class Limited, a tax-efficient mutual fund corporation that allows investors to switch among its 42 fund classes without triggering a disposition for tax purposes.

This change was prompted by the elimination of the foreign property rule for registered plans, as Synergy Canadian Fund classes were considered Canadian content for registered plans and CI Corporate Class funds were considered foreign content, CI says.

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CIBC, CI team up on new deposit note

(November 28, 2005) CIBC and CI Investments have launched the CIBC CI Global Insights Deposit Notes, Series 1, which gives investors the opportunity to add global diversification to their portfolios with the security of principal protection at maturity, the two firms claim.

The notes offer the potential for up to 200% exposure to a basket of three global equity mutual funds managed by CI Investments (Synergy Global Corporate Class, 40%, CI International Value Fund, 40%, and CI American Value Fund, 20%). They employ a dynamic allocation strategy that increases exposure to the funds when performance is positive and reduces exposure to the funds when performance is negative. CIBC provides 100% principal protection at maturity and any distributions made by the funds will be reinvested in the structure.

“The Canadian market has been one of the best-performing developed markets in the past few years, resulting in the typical Canadian investor’s portfolio being heavily skewed to Canadian content,” said David R. McBain, Senior Vice-President of CI Investments and President and Chief Executive Officer of Skylon Advisors, which is marketing the note in conjunction with CI.

“Prudent portfolio construction and new investing opportunities would suggest rebalancing is in order to increase global exposure and improve the overall risk characteristics of investment portfolios,” he adds.

The notes will be available through advisors until January 20, 2006 at an issue price of $100 per note and a minimum investment of $5,000.

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Institutional investors want hedge funds: study

(November 28, 2005) According to a study from the Bank of New York and U.S.-based consulting firm Casey, Quirk & Associates, institutional investors south of the border are getting into hedge funds on a large scale.

The report projects that investor capital in hedge funds will increase from $60 billion US $300 billion US in the next five years.

According to the study, defined benefit plans account for 40% of institutional hedge fund capital, which is roughly evenly split between public and private plans.

The trend is leading pension plans to alter their investment policies and strategies. As a result, hedge fund investment firms will have to expect “different product demands and return expectations.”

The hedge fund business, according to the study, will “result in more mature business models than are typical today.” Filed by Joel Kranc, Benefits Canada

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