Briefly:

(November 26, 2004) Goodman & Company, Investment Counsel is planning the merger of CMP Fund Corporation into the Canada Dominion Resource Fund Ltd., which will in turn be renamed Dynamic Managed Portfolios Ltd. (DMP).

CMP shareholders will be asked to approve the merger at an annual and special meeting on December 22, 2004. If approved, the merger will take effect after the close of business on a date to be determined by Goodman & Company, currently expected to be December 30, 2004.

The existing class of shares currently offered to investors by CDR will be re-designated as the DMP Resource Class. All the shares of CDR, including those issued to CMP shareholders as part of the merger, will become shares of the DMP Resource Class. Nine additional classes of shares will be created which will provide CDR and Goodman & Company the ability to provide a multi-class investment product to investors in the future.

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RBC hires Mondrian

(November 26, 2004) RBC Asset Management has named Mondrian Investment Partners Limited as sub-advisor for the RBC Private EAFE Equity Pool, effective November 29, 2004.

“Mondrian Investment Partners is a superb asset manager, with a disciplined and distinctive value-driven philosophy,” said Brenda Vince, president, RBC Asset Management Inc. “We are very pleased to add this quality manager to our lineup of sub-advisors available to our high net worth clients.”

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CMHC to expand securities holdings

(November 26, 2004) Canada Mortgage and Housing Corporation (CMHC) is set to include variable rate mortgages in its lineup of mortgage-backed securities (MBS).

“The enhancements CMHC is making to the MBS and CMB Program support the government’s commitment to ensuring the availability of low-cost mortgage funds to Canadians,” said Joe Fontana, minister of labour and housing. “This in turn enables more Canadians to access homeownership and improves accessibility to affordable housing.”

This enhancement, introduced last year under a pilot program, will be fully implemented and available to approved issuers effective December 1, 2004.

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OSFI head warns of reputation damage

(November 25, 2004) Financial institutions must guard their reputation closely, as it is the foundation of not only their business, but of the entire industry, according to Office of the Superintendent of Financial Institutions (OSFI) superintendent Nick Le Pan.

“There is no other basis for the financial services business than trust and confidence! And that goes to a firm’s reputation and why reputation is a zero tolerance risk,” Le Pan said in a speech to the Economic Club of Toronto. “Confidence and credibility is at the core of what financial institutions are all about. They take a long time to build up but can be undercut quickly. I am convinced that Canadian banks and insurers understand this. But I also believe that always dealing appropriately with customers and counterparties in complex far-flung organizations is sometimes a challenge.

Le Pan pointed out that his office is more concerned with firms following best practices, rather than rooting out “financial wrongdoers,” which he says is the purview of the OSC and the likes of New York Attorney General Eliot Spitzer.

“We will be putting out further information to financial institutions on our expectations for their management of reputation risk,” he said. “We aim not to be overly prescriptive but we believe it would be beneficial to indicate what we see best practices to be.”

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Guide to income funds hits bookshelves

(November 25, 2004) Just in time for Christmas, there’s a new investment guide hitting the shelves, entitled Canadian Income Funds: Your Complete Guide to Income Trusts, Royalty Trusts, and Real Estate Investment Trusts.

“Canadians are becoming more and more involved in their portfolios and they want to learn as much as they can about alternative investments,” said co-author Simon Romano, a partner at Stikeman Elliott LLP. “We wrote this book in order to help the average investor, as well as others, gain a better understanding of these funds and the benefits and risks associated with them.”

Romano teamed up with financial expert and co-founder of Swift Trade, Peter Beck. The book is published by John Wiley & Sons. It is available in stores and online starting November 25.

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CGAs call for upper-class tax cuts

(November 25, 2004) Canada’s certified general accountants are calling on the federal government to cut personal and corporate taxes, after Ottawa announced a “surprise” budgetary surplus this fall.

“We believe that if our tax-cutting proposals are implemented, they will contribute to conferring a competitive edge on all classes of Canadian taxpayers relative to U.S. counterparts,” said Everett Colby, FCGA, chair of the CGA-Canada’s Tax and Fiscal Policy Committee.

Current projections estimate the full-year surplus to be around $8.9 billion, which the CGAs say is sufficient to allow the taxable income threshold to be increased by 25%, meaning that the upper rates can be raised and expanded.

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AGF appoints Harmony manager

(November 25, 2004) AGF Funds Inc. has announced the appointment of McKinley Capital Management Inc. as portfolio manager on the overseas equity pool in Harmony, AGF’s tailored investment program.

McKinley Capital Management Inc. will manage the growth portion of the Harmony Overseas Equity Pool.

Harmony also announced the launch of a DSC purchase option for its pools and portfolios, which will be available for both the wrap and embedded series.

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Nortel reassures investors

(November 24, 2004) Despite missing three self-imposed deadlines and facing a regulatory one at the end of December, Nortel sounded a confident note today, issuing a release saying it has not been threatened with delisting from the New York Stock Exchange.

The company says it has consulted with the Office of the Chief Accountant of the SEC regarding the accounting for certain product sales and the OCA neither approved nor disapproved the company’s accounting. Nortel’s next next biweekly status update is slated for December 6.

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Investor confidence sags

(November 23, 2004) Investor confidence is waning, according to State Street Global Markets, which released its latest investor confidence report today. The reading for November dropped to 85.3, down from 89.2 in October.

“The willingness of global investors to take on additional risk across their portfolios is now above the levels of last summer, when doubts about the sustainability of U.S. and global growth reached their apex,” said Harvard University professor Ken Froot, who developed the index. “A balanced growth picture is now mixed with renewed concerns about the value of the U.S. dollar and the rate inflation, and underlying them, the U.S. federal budget and current account deficits.”

“As we drill down into the regional variances of the index, we see that investors from Europe appear highly concerned by developments in the Euro and U.S. dollar and are overall selling risky assets in relation to their portfolio holdings,” said index co-developer Paul O’Connell of State Street Associates. “By contrast, Asian investors are more buoyed by regional growth prospects. They are displaying stronger confidence and systematic buying across their portfolios, more so currently than investors in other regions. Investors in the U.S. are in between, though they continue to add to the risk of their portfolios in a relatively light manner.”

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Mavrix closes trust offering

(November 23, 2004) Mavrix Fund Management has announced the closing of its Mavrix Balanced Income and Growth Trust, which will invest primarily in income trusts.

The trust’s goal is to distribute income to investors equal to 7% per annum, based on the initial subscription price of $10.00.

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B.C. delays proclamation of new Securities Act

(November 22, 2004) The B.C. government has decided to delay proclamation of the province’s new Securities Act, scheduled for this month. No reasons were given for the postponement. The British Columbia Securities Commission (BCSC) says that means new rules and regulations recently published by the regulator will not come into force in November as expected.

“We acknowledge the significant efforts by many industry participants who have contributed to the development of the legislation and prepared for its implementation,” said BCSC chair Doug Hyndman in a recent statement. “We will work with the government on setting a new target date for implementation.”

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MFDA preps for first disciplinary proceeding

(November 22, 2004) The MFDA says its enforcement department has a current caseload of 165 active files and expects to bring its first disciplinary action before the end of the year.

In its monthly update, the MFDA says it has escalated 56 cases to the investigation stage and one to litigation. From January 1 to September 30, 2004, the enforcement department closed 274 cases for a variety of reasons: some were outside of MFDA jurisdiction; in other cases, warning letters were sent; and others were referred to a different regulatory agency.

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