Briefly:

(January 2, 2007) The Office of the Superintendent of Financial Services has announced the termination of an agreement with CIBC that required the bank to employ an independent auditor to oversee all of its business operations in the U.S.

The agreement was struck in December 2003 and was limited to a three-year period. The agreement stemmed from CIBC’s dealings with failed energy trader Enron Corp. The bank had entered into complex structured finance transactions involving special-purpose entities. These entities were in fact being used to mask losses at Enron.

Following the firm’s spectacular collapse, CIBC entered into the oversight agreement with the U.S. Department of Justice, with OSFI serving as the “home country supervisor” over the agreement.

The auditor had wide-ranging oversight powers and was required to notify OSFI if it detected any non-compliant activities at the bank.

CIBC was named in the so-called Mega Claims class action suit that followed the Enron collapse, eventually settling and agreeing to pay $2.4 billion. The bank also paid an $80 million penalty to the U.S. SEC.

CIBC was not the only Canadian bank to have dealt with Enron. In July 2005, RBC settled with Enron investors, paying $25 million US, reflecting what that bank called the “minor role” it played in the Enron debacle. In August 2005, TD Bank agreed to settle its portion of the class action suit, paying $130 million US.

CIBC has agreed to adopt certain complaince related policies and procedures and hire an independent auditor for another three year period, beginning next month.

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Excel launches global income fund

(January 2, 2007) Excel Funds has kicked off the new year by announcing the launch of a new fund, the Excel Income and Growth Fund.

Best known for its India and China funds, Excel will expand its investment universe, citing Australia, Germany and Singapore as prime markets for income investing. The fund will still offer exposure to the Indian market through its fixed-income portfolio.

“India’s 364-day T-bills are yielding just over 7%, and the debt risk in India is low,” says Bhim Asdhir, president and CEO, Excel Funds. “It is a less known fact that India is now America’s fourth largest creditor, having some $160 billion in foreign exchange reserves.”

The fund is expected to show a low correlation with India, China and North American equity markets. Excel points out that currency risk is perhaps the most significant risk to investors in this fund. The fund officially opened to investors on January 2, 2007.

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TD beefs up U.S. presence

(January 2, 2007) TD Banknorth, the American division of TD Bank, has completed its purchase of Interchange Financial Services Corp., effective January 1, 2007.

“The Interchange acquisition enhances our branch network in the mid-Atlantic region and significantly increases our presence in northern New Jersey,” said William J. Ryan, chairman and CEO of TD Banknorth Inc. “We’re excited about expanding in Bergen and Essex counties, and we look forward to meeting the financial needs of our newest customers.”

(01/02/07)