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Starting January 1, 2011, Canada’s Generally Accepted Accounting Principles will be replaced by International Financial Reporting Standards (IFRS), which may make life easier for companies interlisted on U.S. exchanges.

According to a CICA/RBC Business Monitor study in 2008, approximately 80% of respondents impacted by IFRS are prepared to make the changeover by January 2011.

The Accounting Standards Board (AcSB) and investors have indicated that businesses need to adopt a global language of accounting to compete internationally, and, as Canada only represents 4% of the global capital market, maintaining a uniquely domestic accounting practice does not seem beneficial.

IFRS is rapidly becoming the international language for accounting. Since 2005, all listed companies in the European Union have been complying with these international standards. Canada is expected to make the changeover at approximately the same time as India, Japan, Brazil, Israel and South Korea.

On track to meet the deadline, the Canadian GAAP is gradually moving away from U.S. GAAP. Currently, Canadian companies are required to reconcile their accounting practices to U.S. GAAP to participate in the American market.

Converting to IFRS will prove both cost and time effective, given that IFRS financial statements are generally accepted by the U.S. It’s still uncertain if the U.S. will convert to the IFRS or work toward a long-term convergence with the international principles.

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SEC slaps Morgan Stanley with fine

The SEC has charged Morgan Stanley and one of its investment advisors with disclosing misstatements of material information about money managers, and failing to disclose conflict of interest.

“Morgan Stanley said one thing and did another when recommending money managers who had not been properly vetted by the firm,” Scott W. Friestad, associate director of SEC’s enforcement division, said in the statement.

By steering clients to the unapproved managers, the firm and William Keith Phillips of Nashville, a former financial advisor, would have received substantial brokerage commissions and fees.

In a separate administrative proceeding that continues against Phillips, the SEC alleged that he aided and abetted and/or caused Morgan Stanley’s violations.

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TD replaces portfolio advisor

TD Asset Management Inc. has hired Newton Capital Management Limited (Newton) to be its new portfolio advisor for the TD Global Select Fund, effective on or about August 1, 2009.

Established in 1978 and headquartered in London, U.K., Newton is a subsidiary of The Bank of New York Mellon, and together with its affiliated companies, currently has over $48 billion US in assets under management.

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Crown Hill Fund appoints Jarislowsky, Fraser

Crown Hill Capital Corporation has appointed Jarislowsky, Fraser Limited — Canada’s largest independent investment counsel firm — as investment manager of its Crown Hill Fund.

The fund’s portfolio will stay in tune with Jarislowsky’s long-standing practice of staying conservative, and with a focus on generating income.

“As one of Canada’s most respected investment managers — with a singular commitment to long term growth, minimal risk and low fees — Jarislowsky is aligned with Crown Hill’s long-term strategy for the fund,” said Wayne Pushka, president of Crown Hill Capital Corporation.

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AlphaPro Fiera completes $30 million bond fund IPO

Jovian Capital Corporation and its subsidiary AlphaPro Management Inc. closed the initial public offering of 2.9 million Class A units and approximately 140,000 Class F units of the Horizons AlphaPro Fiera Tactical Bond Fund, for gross proceeds of more than $30.4 million.

Designed to provide investors with a stable stream of tax-efficient monthly distributions and the opportunity for capital appreciation, The fund is expected to automatically convert into an actively managed exchange traded fund (ETF) after June 30, 2010, and no later than December 31, 2010.

“This fund combines exposure to the expertise of Fiera Capital, one of the best fixed income managers in Canada and, after conversion, the benefits of an ETF structure — low cost, intraday liquidity and diversification, as well as the opportunity for stable income,” said Howard Atkinson, president of AlphaPro.

(07/21/09)