Briefly:

(December 23, 2005) Thirteen financial services companies made the Globe and Mail’s Report on Business magazine and La Presse annual “50 Best Employers in Canada” ranking, including five companies that cracked the list for the first time.

Edward Jones was named the third best place to work in the large firm category. The investment dealer’s partnership and profit-sharing opportunities as well as its investment in training and technology helped push it near the top of the list. Edward Jones placed 10th overall in the ranking, up from 21st last year.

The Co-operators was the only other financial services company to break the top 10 in the large company category. It placed ninth in that category and 25th overall, down from 16th last year. Three of the firm’s subsidiaries made the list in the medium-sized company category, including Co-operators Life Insurance Co. (#28 overall), L’Union Canadienne (#31), and H.B. Group Insurance Management Limited (#41).

Winnipeg brokerage Wellington West was number one in the medium-sized category and placed second overall. The firm, which didn’t make the list last year, was lauded for its share ownership plan, employee committees to provide direct feedback to senior management and for its fully paid health and dental benefits.

Other newcomers to the list include Coast Capital Savings Credit Union (#39 overall), Prospera Credit Union & Insurance Agencies (#19) HB Group Insurance (#41) and Conexus (#45).

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Middlefield announces fund IPO

(December 23, 2005) Middlefield Group has filed a preliminary prospectus for the new MG Dividend & Income Fund.

According to a release, the new fund is designed “to provide investors with an attractive level of stable monthly distributions as well as the potential for capital appreciation by investing in a broadly-diversified portfolio of income producing equity securities.”

Initially, the fund will be made up of 75% income trusts, with a heavy focus on oil and gas royalty trusts, and the remainder in common shares. Middlefield aims for the fund to pay monthly distributions and enhance value through capital appreciation. The initial “indicative” yield is 7.5% per annum, based on the issue price of $10 a unit.

Guardian Capital will serve as co-advisor to the fund along with Middlefield. The two firms will handle the income trust component of the portfolio, including the asset mix and security selection. Groppe, Long & Littell, a Houston-based oil and gas consulting firm, will be special advisor to the fund, providing analysis of the global economic and political forces impacting the price of oil and natural gas.

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Four new iUnits trade on the TSX

(December 23, 2005) Barclays Global Investors Canada unleashed four new iUnits on the TSX Friday.

The new funds on the exchange offer sector exposure, yield opportunities and protection against inflation, Barclays says. The funds include the iUnits Materials Sector Index Fund (TSX: XMA), iUnits Income Trust Sector Index Fund (TSX: XTR), iUnits Dividend Index Fund (TSX: XDV) and the iUnits Real Return Bond Index Fund (TSX: XRB).

Barclays Canada, a division of Barclays PLC, manages over $60 billion in Canadian assets, including over $10 billion in iUnits funds.

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CPP, OAS benefits increase New Year’s Day

(December 22, 2005) The federal government has announced increases in Canada Pension Plan (CPP) and Old Age Security (OAS) benefits to take effect January 1.

Those receiving CPP benefits as of December 2005 can expect their payments to increase by 2.3% in the new year, due to inflation indexing based on StatsCan’s calculation of the Consumer Price Index. CPP rates are adjusted once a year.

The basic OAS pension, paid to people 65 years of age and over, will rise 1% over the previous quarter to $484.63 per month. OAS rates are adjusted quarterly, based on the average CPI. Over the past year, OAS benefit rates have increased 1.7% overall. The maximum Guaranteed Income Supplement (GIS) and Allowance payments will also increase by 1% this coming quarter.

On top of the indexation increases, GIS and Allowance benefits will increase by $18 a month for single recipients and $29 a month for couples.

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OSC bans, fines registrant in locked-in RRSP scheme

(December 22, 2005) Ontario’s securities regulator has banned and fined Brian Peter Verbeek for his involvement in a locked-in RRSP scheme.

Earlier this year, the Ontario Securities Commission found that Verbeek participated in a plan in which holders of locked-in RRSPs purchased securities in private corporation in exchange from loans from those corporations for 60%-80% of the share purchase price.

“The holders were mainly low-income, unsophisticated investors having few investments beyond their locked-in RRSPs,” the OSC said, adding that Verbeek failed to consider the holders’ investment needs and the suitability of the high-risk private securities.

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

Verbeek’s registration has been terminated and he has been ordered to pay nearly $95,000 in costs. In addition, he has hit with a permanent cease trading ban, except for trading in his own RRSPs.

“We consider Mr. Verbeek’s past conduct to have been so abusive as to warrant apprehension of future conduct detrimental to the integrity of the capital markets,” the OSC panel said in issuing reasons for its decision.

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MFDA to hear fraud case

(December 22, 2005) The Mutual Fund Dealers Association has launched disciplinary proceedings against Scott Andrew Stevens, a former registered mutual fund salesperson with PFSL Investments Canada in Ontario.

Stevens is alleged to have misappropriated over $77,000 from three separate clients, telling them their capital would be used as a loan to a friend who was selling a piece of residential real estate.

Stevens allegedly pocketed the money for his own use and provided his clients with no documentation to indicate how the cash was used. The loans were supposed to be repaid in March 2005, but were not. PFSL dismissed Stevens after the allegations came to light and he is not currently registered in the securities industry.

The MFDA adds that Stevens has failed to cooperate with its investigation. The first hearing in the case is scheduled for February 9.

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TSX sets another record in 2005

(December 22, 2005) The year 2005 will take its place in the record books for the Toronto Stock Exchange, not only for the record high total value of trades clinched earlier this month, but also for the number of new listings on the exchange.

Already there have been 217 new listings added to the market, surpassing last year’s record of 204. Among these new listings, there were 132 initial public offerings and 46 graduations from the TSX Venture Exchange.

“We have seen strong listings activity across all sectors,” said Rik Parkhill, senior vice-president, Toronto Stock Exchange. “We are the seventh largest exchange in the world in terms of domestic market capitalization and we are world leaders in mining and energy listings and financing.”

Broken down by sector, 134 of the new listings were classified as industrials, 42 as oil and gas and 41 mining issuers. Structured products made up 97 of the listings, with 56 of these being investment funds or split share corporations, one exchange traded fund and 41 income trusts.

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Britain to use PlanPlus in CFP education

(December 22, 2005) Canadian-based PlanPlus has inked a deal with Britain’s Institute of Financial Planning to incorporate its online financial planning software into the IFP’s education program.

“We are excited about working with the IFP on this initiative,” said Shawn Brayman, President of PlanPlus. “The IFP is the champion of professional financial planning and the CFP standards in the U.K. and committed to the creation of a recognized career path for the profession of financial planning. We feel our student software will help to enhance the learning experience for the students and educators.”

The December 2005 release of PlanPlus for Students precedes the publication of its companion, the U.K. Edition of Personal Financial Planning, a Canadian textbook written by authors Kwok Ho, Chris Robinson from York University, published by Captus Press. The textbook is being localized for the U.K. market by Paul Granger and is scheduled for release next year.

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Norbourg claims deficient, says AMF

(December 21, 2005) Quebec’s securities regulator says many of the more than 600 compensation claims from clients who lost money in the Norbourg affair are incomplete.

In a release issued earlier this week, the AMF said all claims must contain detailed information, including the name of the firm and representative who sold the funds, the dates on which the funds were purchased, the amount claimed as well as accompanying support documentation, such as account statements and purchase forms.

“To date, the claims we have received do not contain all the information required to perform a full analysis of the facts,” the regulator said, recommending that investors use the compensation claim form available on its website.

The AMF adds there is no evidence that funds were misappropriated within the overall Norbourg distribution network, so only claims submitted by investors who purchased funds through group savings plan brokerage firms controlled by Vincent Lacroix are being reviewed.

Norbourg’s assets were frozen in August, amid allegations that Lacroix, who ran the company, misappropriated more than $84 million from Norbourg and the Evolution fund family.<./p>

“Allegations involving a firm’s owner do not imply that the firm’s staff is guilty of dishonest transactions,” the AMF added. “As the financing behind this affair is highly complex, we must take the time required to elicit all the evidence in this case.”

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OpenSky introduces new blue chip notes

(December 21, 2005) OpenSky Capital has launched the first series of principal protected Blue Chip Optimizer Notes, guaranteed by Citibank.

The notes offer investors access to a portfolio of eight North American blue chip companies, an annual simple rate of return of up to 14% over eight years and 100% principal protection at maturity.

Each year, on the anniversary date of the note’s issuance, the share with the best performance, as measured from the settlement date and capped at 14% of the starting share level, will be locked-in. The share is then discarded from the portfolio for the purpose of calculating future locked-in performances. Repayment at maturity will be calculated on the principal amount by adding each of the eight locked-in performances (to a maximum of $212 per note, including repayment of principal).

The new notes are available until February 3, 2006, with an up-front selling commission of 4%.

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Impax continues acquisition spree

(December 21, 2005) One week after purchasing three labour-sponsored funds from MDS Capital, Impax Capital announced it has reached a deal to acquire all the outstanding shares of Fairway Capital.

Fairway manages four closed-end investment funds listed on the TSX: Fairway Diversified Income and Growth Trust, Global Preferred Securities Trust, Fairway Investment Grade Income Fund and Nuveen Senior Floating Rate Income Fund.

“We are excited about teaming up with the principles at Impax who have an exceptional track record in the financial services industry,” said Andrew McKay, Chief Executive Officer of Fairway. McKay will assume CEO responsibilities at Impax.

As part of the agreement, Rockwater Capital is selling its 35% equity interest in Fairway to Impax.

On December 14, Impax announced the acquisition of the Medical Discoveries Management Corporation, manager of the Canadian Medical Discoveries Fund and Canadian Medical Discoveries Fund II; and Canadian Venture Capital Management Corporation, manager of the B.C. Medical Innovations Fund.

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Desjardins adds pair of seg funds

(December 21, 2005) Desjardins Financial has introduced two new segregated funds to its lineup, the Millenia III Bissett Canadian Balanced Fund and the Millenia III Jarislowsky Fraser Canadian Equity Fund.

“The Millennia III Bissett Canadian Balanced Fund is a solid performer that includes the Bissett Small Cap and Bissett Microcap Funds,” says Desjardins senior vice president Monique Tremblay. “The Millennia III Jarislowsky Fraser Canadian Equity Fund is a long-term performer with a great track record entirely invested in the Canadian market.”

The Bissett portfolio consists of seven Bissett fixed income and equity funds and is suitable for investors seeking a balance between income and long-term capital appreciation, Desjardins says.

The Jarislowsky Fraser fund includes the stocks of companies that enjoy solid earnings growth, mainly leaders in non-cyclical industries, Desjardins says, and is intended to investors seeking long-term capital appreciation while controlling risk exposure.

All seg funds in the Millennia III family offer a 100% principal guarantee at death. In addition, Desjardins says the amount of capital guaranteed is automatically adjusted each year.

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TSX discontinuing voting symbols

(December 21, 2005) The TSX Group is ending the practice of adding special voting symbols to stock abbreviations, such as NV for non-voting and SV for subordinate voting.

Effective immediately, the symbols will no longer be applied to new listings and current listings will be amended in a three-month transition period starting in early 2006.

In a release, the TSX said the changes are a result of an extensive consultation process with market participants, many of whom had been lobbying for an end to the additional symbols, which were introduced only last year.

The TSX is encouraging issuers to maintain transparency of their share voting structure to shareholders and will post details of subordinate and non-voting share structures on its website.

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IDA imposes lifetime ban on former rep

(December 20, 2005) The IDA has banned former broker William Edward Markell for life and imposed a $150,000 fine.

Markell worked at the Cornwall, Ontario office of BMO Nesbitt Burns. The IDA says he engaged in personal business activities with a client family, borrowing from them and helping to invest in private placements in which he had also invested, without informing his firm. Seventy-five thousand dollars borrowed from one client has not been repaid, the IDA says.

“The lender, in this case, will have to seek recourse in the courts or by other means, as, unfortunately, it cannot be obtained by the association,” the IDA noted.

Markell also made a false statement to his branch manager and requested that a family member of one of his clients confirm the statement.

Markell, who is no longer registered, failed to co-operate with the IDA’s investigation into his conduct.

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Acuity to offer closed-end trust

(December 20, 2005) Acuity Funds has filed a preliminary prospectus for the initial public offering of units of the new Acuity Diversified Total Return Trust.

The trust is a closed-end offering, intended to provide unitholders with monthly distributions, to enhance long-term return and to return upon termination at least the original issue price of $10 per unit.

The new product will invest in an actively managed diversified portfolio of securities consisting mainly of units of income funds and some equities — primarily dividend paying shares — which Acuity believes have the potential for substantial growth.

Acuity expects the trust to provide a 7% return in its first year.

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Sprott re-opens Canadian Equity fund

(December 20, 2005) Sprott Asset Management has announced that it will re-open the Sprott Canadian Equity Fund to new investors, effective January 3, 2006.

The company says the decision stems from ongoing research uncovering new investment opportunities for the fund, which has been already been capped twice — once in June 2004 and again in March 2005 after a short-lived two month opening.

“SAM reserves the right to re-cap the fund in the future should the growth rate of net subscriptions exceed the pace of valued investment opportunities during what we believe to be a difficult and long-term secular bear market,” Sprott said in a statement.

The fund’s primary objective is to outperform the broad Canadian equity market as measured by the S&P/TSX composite total return index over the long term of five or more years and to provide long-term capital appreciation. Minimum initial investment is $5,000.

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MFDA begins disciplinary proceedings against former PFSL advisor

(December 20, 2005) The MFDA has commenced disciplinary proceedings against former PFSL Investments Canada advisor Ernest Ming Chung Lo. The first appearance to schedule a date for Lo’s hearing takes place in Toronto on January 11, 2006.

The MFDA says Lo conducted business outside of PFSL, failed to observe standards of ethics and conduct, and failed to respond to two separate requests to provide a report to investigators.

Lo was registered as a mutual fund salesperson in Ontario with PFSL from November 1996 to December 2004. During that time he became acquainted with David Braganza, a former Level II life insurance agent. In settlement proceedings earlier this year, Braganza admitted he misappropriated investment funds from a client and had his insurance agent’s license revoked by the Financial Services Commission of Ontario.

Under what the MFDA calls “the Braganza Investment,” clients provided funds to Braganza and received receipts acknowledging the receipt and rates of return investors could expect over the short term. Braganza told Lo that the investments were used in bridge financing deals for margin calls, primarily in Europe.

Lo invested $55,000 of his own money and recommended the investment to one of his clients who in turn invested $10,000. Braganza defaulted on both loans and has failed to account for or return the investment or interest. PFSL terminated Lo in December 2004.

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Mackenzie proposes Keystone mandate changes

(December 20, 2005) Mackenzie Financial will hold a special meeting on March 17, 2006 for investors to vote on proposed changes to the investment objective of the Keystone AIM Trimark U.S. Companies Fund.

Under the proposed changes, the fund will be renamed the Keystone Dreman U.S. Value Fund to reflect the change in management, investment objective and strategy. The new investment objective shifts the funds focus to a contrarian value approach using low price earnings multiples as its primary criteria for stock selection.

The company says the proposal is part of an annual strategic review of all funds in the Keystone family.

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Interest error costs RBC $25 million

(December 19, 2005) Royal Bank has announced it will pay an interest rate adjustment to holders of non-registered GICs who were mistakenly paid simple interest, rather than compound interest.

“As soon as we discovered the problem earlier this year, we immediately conducted an in-depth review of client accounts that might be impacted,” said Jonathan Hartman, vice-president of investment products with RBC Royal Bank. “We have initiated a payment process for affected clients and are automatically adjusting tax slips for clients in 2005 so they will not have to re-file their tax returns for prior years as a result of interest payments they are receiving.”

The total payment will amount to $25 million, paid out to about 250,000 clients. The bank says the majority of clients will receive less than $50. Notification letters will be sent out on December 20.

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Mackenzie launches income trust fund

(December 19, 2005) Mackenzie Financial has added an income trust offering to its family of funds. The new Mackenzie Sentinel Income Trust Fund aims to capitalize on the strength of the trust market with the goal of providing income combined with long-term capital growth, the fund company says.

“The income trust asset class is here to stay and is an excellent component for people seeking monthly income,” said David Feather, president, Mackenzie Financial Services. “We want to make sure we’re offering the full range of income options available to Canadians, and adding the Mackenzie Sentinel Income Trust Fund to our already comprehensive Sentinel income brand helps us achieve that.”

The new fund will invest in core positions of each income trust sector, including Canadian income trusts, business trusts, royalty and resource trusts, real estate investment trusts, utilities and infrastructure trusts, as well as limited partnerships with investment objectives of producing income from similar business sectors.

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Rising energy prices to boost economy, says CIBC

(December 19, 2005) The Canadian economy will grow by 2.9% next year and 2.4% in 2007, says CIBC World Markets, thanks mostly to higher energy prices. CIBC predicts that oil prices will average over $70 US per barrel in 2006.

In a report released today, CIBC chief economist Jeff Rubin noted that the energy boom has created regional disparities not seen in Canada since the OPEC crisis of the 1970s and early 1980s.

Real economic growth is expected to soar more than 7% next year in Alberta, CIBC predicts, while the Ontario economy is expected to grow by less than 2%.

“With the energy trade balance poised to climb to a record 5% of GDP, the Canadian dollar is becoming a bona fide petro currency,” says Rubin. “While energy exports to the U.S. will be little affected by a soon to be 90 cent Canadian dollar, a soaring currency will saddle Canadian manufacturers with as much as 25% higher unit labour costs than their American competitors.”

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Foreigners snap up Canadian securities

(December 19, 2005) Foreign investors continued to buy Canadian securities in October, pouring $3.8 billion into stocks and bonds, according to StatsCan. Bonds attracted slightly more capital than equities, at $2 billion, with new provincial issues proving the most popular.

Canadian investors returned the favour, buying the same value in foreign securities, although showing a strong preference for bonds. In September, Canadians invested about $5 billion abroad.

The Brits were the top buyer of Canadian bonds, followed by investors from Asia, while Americans sharply sold off their holdings. Foreigners bought $2.8 billion worth of foreign denominated bonds, while U.S.-denominated bonds were sold off to the tune of $1.5 billion. Canadian denominated bond sales totaled $717 million. Money market investment remained flat.

Foreign investors bought a net total of $1.6 billion in Canadian equities in October, bringing the sum for the past four months to more than $9 billion.

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