Briefly:

(May 21, 2004) The six-month grace period for mutual fund dealers and salespersons with clients in provinces where they are not registered has expired, the MFDA said in a bulletin issued today.

The MFDA issued a regulation notice on out of province registration last October, requiring dealers and salespersons to address the situation by either applying for the necessary registration to continue servicing the client, or by transferring the account.

The transition period for rectifying out of province registration situations expired on April 29. Dealers and salespersons who are not properly registered will be required to sign an undertaking agreeing to resolve the issue and to cooperate with MFDA staff.

Failure to do so could result in disciplinary action, the MFDA warns.

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CSI revamps securities course

(May 21, 2004) The Canadian Securities Institute is launching a newly revised version of its popular Canadian Securities Course, which will include an online investing simulator, allowing students to hone their skills under current market conditions.

“The simulator allows students to move beyond theory and into the real world,” said Jay Flye, vice-president at the Canadian Securities Institute. “It’s a testing ground for them to refine their investing skills and strategies and to become confident advisors and investors.”

The simulator gives student $500,000 in virtual client money to manage, according to the virtual client’s risk profile. The simulator allows the student to trade equities, bonds and mutual funds.

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Quebec teen wins financial essay contest

(May 21, 2004) The Canadian Securities Administrators has awarded 17-year old Kim Ma of Montreal $2,500 for her essay submission to the Test Your Financial I.Q. contest.

Her essay outlined a savings plan which accounted for her risk tolerance and financial goals, using a diversified portfolio to grow her savings, the regulator said. More than 600 youths between the age of 14 and 18 entered the contest.

The CSA awarded $750 each to 11 regional winners, including Alberta’s Eva Hu, British Columbia’s Jocelyn Bootle, Manitoba’s Wendy Kwong, New Brunswick’s Raphaelle Theriault, Meredith Loveys of Newfoundland & Labrador, Matthew Grundy from the Northwest Territories, Nova Scotia’s Dominic Daemen, Ontario’s Clinton Cairns, Graham Watts of P.E.I., Saskatchewan’s Courtney Johnson and Yukon’s Helen Booth.

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Cost of living higher in April

(May 20, 2004) The consumer price index rose in April, following a downward blip in March, according to Statistics Canada. The year-over-year change in prices hit 1.6%, up from 0.7% in March.

Rising energy costs played a big part in the increase, with the core CPI rising to just 1.2% once energy and food are factored out. On a month to month basis, CPI rose 0.2%.

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Securities transactions rose in March

(May 19, 2004) Foreign investors returned to the Canadian market in March, following a net divestment in February. Foreign investment hit $6.2 billion, with $3.6 billion going into the stock market and $2.3 billion into bonds. Money market paper made up the remaining $300 million.

Canadian investors reciprocated, investing $1 billion in the foreign bond market, with $300 million of that heading to the U.S. There was a small net increase in foreign equity holdings, as a $1 billion sell-off in overseas stocks all but wiped out the $1.1 billion in U.S. stocks purchased.

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Unity buys Lincoln’s Canadian insurance operation

(May 18, 2004) Unity Life of Canada has announced regulatory approval for its acquisition of the Canadian insurance operations of Lincoln Heritage Life Insurance. The deal is effective as of January 1, 2004.

Policy administration services will be provided on behalf of Unity Life by GeniSys. Unity Life of Canada was the product of the amalgamation of Toronto Mutual Life Insurance Company and The Western Life Assurance Company.

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Greenspan set for fifth term as Fed chair

(May 18, 2004) U.S. President Bush has renominated Alan Greenspan as chair of the U.S. Federal Reserve for a fifth term, ending in 2008. The nomination now goes to the U.S. Senate for confirmation.

“Alan Greenspan has done a superb job as chairman and I have great continuing confidence in his stewardship,” Bush said. Greenspan, who is 78, was first appointed Fed chair in 1987.

His term as a member of the Federal Reserve — which cannot be extended — ends in 2006. It’s unclear if Bush will change the law to allow Greenspan to serve out his new appointment.

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Canada a leader in financial security

(May 17, 2004) Despite increasing threats, many of the world’s global financial institutions appear reluctant to increase security spending, a survey suggests. About 25% of respondents in Deloitte’s annual global security survey reported flat growth in their security spending.

“Financial institutions, particularly security officers, are facing greater challenges than ever,” says Deloitte’s Adel Melek. “They are fighting an on-going battle to overcome evolving security threats and to comply with an increasingly stringent regulatory environment but, at the same time, resources have stagnated.”

Security breaches have become far more common, with 83% of respondents reporting their systems were compromised in 2003, up from just 39% in 2002, with 40% of these breaches causing a financial loss.

Canada was singled out in the report as a leader in security, with top marks for executive commitment to security funding, and sharing first place for the number of firms which increased their security staff in the past year.

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CI takes management of fixed income funds in-house

(May 17, 2004) CI Mutual Funds has announced it will shift management of four fixed-income portfolios from J. Zechner Associates to CI’s own in-house Signature Funds Group, appointing James Dutkiewicz as lead portfolio manager.

“This team of analysts and managers was built to support Signature’s fixed-income requirements in other products and they have made significant contributions to the performance of those funds. The team is now in a position to accept these new mandates,” said Peter Anderson, CI president and CEO.

The affected funds are CI Canadian Bond Fund, CI Short-Term Bond Fund, CI Long-Term Bond Fund and Clarica Premier Bond Fund. The change is effective immediately.

“Zechner is a first-rate money management firm,” added Anderson. “However, it makes sense for CI to bring these portfolios in-house, given the Signature team’s extensive qualifications and experience.”

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Investors Group signs up Bissett

(May 17, 2004) Investors Group has announced plans to add new funds managed by Calgary-based Bissett Investment Management.

“Bissett provides Investors Group clients with a brand name investment manager with a proven track record,” said John Wiltshire, senior vice-president, products and financial planning. “We are very pleased to include Bissett Investment Management as part of a broad and diverse fund offering to our clients.”

The two new funds will be IG Bissett Canadian Equity and a corporate class version, IG Bissett Canadian Equity Class. At the same time, Investors Group is cutting ties with Sceptre Investment Counsel and merging the Sceptre funds into IG funds with similar mandates.

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05/21/04