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Clearing agencies in Ontario will soon be required to obtain a recognition order or an exemption, according to a staff notice from the Ontario Securities Commission (OSC).

Effective March 1, 2011, “the new mandatory recognition requirement for clearing agencies will provide the tools necessary to impose requirements on all entities that perform this critical role,” says Susan Greenglass, director of market regulation at the OSC.

“In helping facilitate securities transactions, clearing agencies play an important role in protecting investors and enhancing the efficiency of the capital markets,” says Greenglass.

The criteria the OSC will consider in deciding whether to give out a recognition order or an exemption will deal with issues such as governance, fees, rules and rulemaking, risk management systems and technology, financial viability and reporting, and operational reliability, among others.

The notice recommends entities that perform certain key functions or provide certain facilities be recognized and be subject to full clearing agency regulation and oversight. These functions include central depository, central counter-party, and/or guarantor functions.

However, an entity with limited activities does not present significant risk to the Ontario capital markets may not require full regulation. The exemption may be subject to certain terms and conditions, taking into account the nature of the functions performed by the clearing agency and the risks arising thereof, says the OSC notice.

The new mandatory recognition requirement is also applicable to foreign-based clearing agencies offering to provide their services or facilities to a person or company resident in Ontario.

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Macquarie opts for ValueOne Program

PriceMetrix has secured the contract to provide practice management support to the Canadian operations of Macquarie Private Wealth.

The ValueOne Program is already used by more than 10,000 investment advisors in North America. The program provides intelligence on investment advisor activity, detailed book metrics, relative performance, and enterprise-wide benchmarking against competitive practices.

“The ValueOne Program is a strategic investment that demonstrates our commitment to providing substantial resources to advisors to help them build their business,” said Bruce Kagan, executive director of Macquarie Group Limited and CEO of Macquarie Private Wealth Inc.

The firm is the result of Macquarie Group’s purchase of Blackmont Capital, finalized in January 2010.

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Barclays’ global outlook remains bullish

Investors will be rewarded for taking risk over the next few months as the global economic recovery continues, with the only substantial threat coming in the form of monetary tightening, according to Barclays Capital.

In Global Outlook: Party Continues, But Watch the Punchbowl, the firm says concerns about deficits and “double dips” are unlikely to undermine the global recovery, and recommends that investors maintain significant exposure to equity and credit markets.

“We have come a long way since March 2009, when our bullish call for markets raised eyebrows,” says Larry Kantor, head of research with Barclays Capital. “That call has played out, and markets have benefited from above-trend growth, below-trend inflation and exceptionally easy monetary policies. While valuations are no longer compelling, equities and credit should continue to benefit from this environment. With the exception of China, policy tightening is not yet appropriate for most economies, and investors should still be positioned aggressively.”

Major themes of Barclays Capital’s Global Outlook include:

• recommending significant exposure to equity and credit markets, balanced with a short position in U.S. Treasuries and a long position in volatility; • U.S. labor market improvement will establish sustainability of U.S. recovery, making Fed tightening more likely; • monetary tightening in China should slow growth in Asia and have a moderating impact on commodity prices; • Europe still lags, but production data points to revival in coming months; and • dollar to continue to perform well; weakness in sterling appears overdone

(03/19/10)