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National Bank Securities will make changes to its Strategic Portfolios, adjusting the weightings of their constituent National Bank Securities mutual funds.

The portfolios will be rebalanced between September 3 and September 24, 2010. A detailed notice giving all the details will be sent to all clients who own Strategic Portfolios.

“These changes will better position Strategic Portfolios in terms of meeting our clients’ needs for diversification, while fully respecting their risk profiles,” says Charles Guay, president and CEO of National Bank Securities.

Apart from the rebalancing, the Altamira Corporate Bond Fund will be added to the Strategic Portfolios program.

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Liquidity risk comes into focus: Dexia

Among the many risks that asset managers must take into account, there is a growing focus on one that has long been taken for granted: liquidity risk, according to a report by RBC Dexia and RiskMetrics Group.

Entitled ‘The Value of Liquidity’, the report sets out a new framework for valuing and measuring liquidity, which was at the centre of both the financial crisis of 2008, and the “flash crash” of May 6, 2010. And yet its very definition has been elusive.

“The notion of liquidity has never been more relevant, nor as frequently referenced as it is today,” says Fay Coroneos, head of risk and investment analytics at RBC Dexia. “It’s central to the understanding of risk in the asset management community, as a result it is imperative that there is progress in measuring, managing or controlling this elusive notion.”

The paper notes that although regulators currently call for Value at Risk (VaR) measures as part of a robust overall risk management process, there is a desire from the industry to further refine this measure.

“Liquidity risk has been central to most financial crises historically, and yet a clean definition of liquidity risk is elusive. In the past, issues such as market depth have been treated in isolation from funding and redemption concerns,” says Christopher Finger of RiskMetrics, co-author of the report. “It is crucial to examine the interaction between these components.”

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Investor group challenges single regulator

The Mouvement d’éducation et de défense des actionnaires (MÉDAC) has come out against the single national regulator, declaring that it will seek leave to intervene before the Supreme Court of Canada.

The Quebec-based group will argue that such a national regulator would be detrimental to both small investors and businesses. That claim is based on the belief that a national regulator — with offices in every province — would provide poorer scrutiny than provincial regulators with limited central policy-making ability.

MÉDAC points out that the OECD ranks Canada second in regard to securities regulation, and the World Bank considers the country fifth best in terms of investor protection.

A better approach, it says, would be to encourage further harmonization of securities regulation, and a reliance on the passport model of mutual recognition.

“Since 1997, we have contributed to the improvement of the good governance of our organizations and have defended with success the rights of shareholders,” said Claude Béland, president of MÉDAC. “We cannot remain silent in face of such a project which threatens their rights and their protection. It is essential that the small investors are heard.”

(06/17/10)