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(January 15, 2008) The Canadian Securities Administrators (CSA) has issued a report on its oversight of the IDA, saying its members are “generally satisfied that the IDA is in compliance with the relevant terms and conditions” to qualify as a self-regulatory organization.

But there were several “significant deficiencies” noted in the report, including procedural problems, supervisory issues and previously noted deficiencies that have still not been addressed.

The Alberta Securities Commission in particular was critical of the IDA, saying that an arrangement to allow a B.C. resident to oversee the Prairie Regional Office had left the region underserved.

“When questioned, several IDA personnel indicated that the vice-president, Western Canada, is seldom in the Prairie Region office and does not generally have a great deal of direct contact with staff,” the ASC’s report says. “The absence of a resident supervisor has contributed significantly to several deficiencies noted during the review.”

The regulator complained that the IDA had insufficient staff in Alberta and that executive-level registration decisions were being made outside the province.

The ASC was also critical of the IDA’s attitude toward registration, which the regulator said was treated as simply “an administrative exercise,” granting registration to individuals who met the bare minimum requirements.

“In practice, IDA staff are not encouraged to undertake a reasoned consideration of each application; instead, a perfunctory review is performed based on a rigid and overly detailed set of checklists,” the ASC report says. “Reducing registration to an administrative function is the most poignant indication of the IDA’s differing views regarding registration.”

Each provincial regulator has posted its version of the report on its website. For the ASC version, click here.

For the IDA’s response, click here.

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IG launches two income/growth funds

(January 15, 2008) Investors Group has announced the launch of two new funds aimed at the retirement market’s need for both income and growth.

Investors Global Real Estate Fund will invest primarily in REITs and real estate stocks, with a goal of providing capital growth as well as distributable income.

The company also points out that real estate traditionally has a low correlation to both fixed income and equities. The fund will be sub-advised by LaSalle Investment Management (Securities) L.P. and its affiliates.

The second new fund, Alto Monthly Income and Global Growth Portfolio, will take a moderately aggressive investment profile, while providing an income stream to investors.

“The addition of these new mandates gives Canadians additional options for both growth and income opportunities in their retirement,” said John Wiltshire, senior vice-president of product and financial planning at Investors Group. Both funds are available to Canadian investors immediately.

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Dalbar lauds service excellence

(January 15, 2008) The financial services research firm Dalbar has named the best customer service providers for 2007, giving top marks to BMO Mutual Funds for mutual fund service for the second year in a row.

“The BMO team clearly demonstrates that service is a top priority for the firm, and it gives us great pleasure to once again recognize them with this distinction,” said Michelle Slute, Dalbar’s manager of client relations.

Franklin Templeton and AIC received the Key Honour Awards, with Dalbar recognizing the firms for “delivering excellent service to their English-speaking clients.”

National Bank Securities Advisory Service and Franklin Templeton were both heralded for their French language service.

Dalbar bases the awards on evaluations made over the calendar year measuring a company’s quality of performance in product knowledge, professionalism, and its ability to provide value-added service.

The 2007 awards mark the 14th year that Dalbar has tracked customer service excellence in the financial services sector.

RBC Direct Investing took home the 2007 Direct Brokerage Service Award.

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Laurentian joins CanDeal

(January 15, 2008) Laurentian Bank Securities has inked a deal with CanDeal, making the bank a contributing dealer to CanDeal’s Canadian Money Market (CAMM) market.

Laurentian is the ninth dealer to join the CAMM market. Laurentian Bank is already a liquidity provider in CanDeal’s market for government-backed bonds, having signed on in 2006.

“CAMM is the only destination of its kind and is proven effective by institutional money managers that embrace it,” said Jayson Horner, president and CEO of CanDeal. “We welcome Laurentian’s contributions to this new market.”

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Mackenzie offers T-series corporate class

(January 15, 2008) Mackenzie Financial has introduced T-series shares to its capital class funds, allowing for tax-efficient distributions in the form of return of capital.

“The combination of these features on one investment platform provides investors with tremendous flexibility,” says David Feather, president of Mackenzie Financial Services Inc. “Capital class investors have always enjoyed the ability to rebalance their portfolios on a tax-deferred basis. Now, with Series T, the transition from investing for growth to investing for income is tax-deferred as well.”

Investors opting for Series T funds can choose between annualized returns of either 6% or 8%.

• • •

IDA fines firm, rep

(January 15, 2008) The IDA has levied a fine of $40,000 against Peregrine Financial Group Canada Inc., following a settlement agreement with the firm.

Peregrine has admitted to capital deficiency between December 2005 and March 2006, running afoul of IDA bylaw 17.1. Upon realizing the flaw, the firm immediately took steps to rectify the situation, and the IDA points out that no client funds were put at risk.

In an unrelated hearing, the IDA has slapped a $40,000 fine on Chak (Jason) Ng, at all material times an approved person with the Toronto head office of HSBC Securities.

Between October and November 2004, Ng unknowingly facilitated a market manipulation in the stock of Pender International Inc., violating IDA bylaw 29.1. He also violated Regulation 200.1(i)(3) by accepting instructions from a person not authorized in writing to provide instructions on a particular account.

The IDA points out that Ng cooperated with both the regulator and police in their investigations. In addition to the $40,000 fine, Ng must pay $25,000 in costs to the IDA. He has been suspended from the securities industry for one year and must rewrite the Conduct and Practices Handbook exam upon returning to the industry. At the end of his suspension, he will be subject to six months of close supervision.

He lost his job at HSBC and is being sued by the bank. He is currently employed at the Toronto branch of Research Capital Corporation.

(01/15/08)