Briefly:

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(June 9, 2006) Independent Financial Brokers of Canada is lowering its errors and omissions insurance premiums, effective July 1.

For example, rates in Ontario start at $749, a decrease of nearly 10%. Rates in B.C start at $654. The IFB plan also includes coverage for licensed assistants of mutual fund salespersons, beginning at $200.

IFB executive director John Whaley cites the association’s favourable claims history as the main reason for the decrease. “Members have told us that spiraling E&O costs is one of their biggest concerns, so we have made rate stability and ultimately rate reductions, as our primary focus for the past four years.”

Renewal notices for the 2006-07 plan have already been sent out. The IFB’s E&O coverage is available to association members only.

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Portus hearing scheduled for next week

(June 9, 2006) An Ontario court will hear details of how receiver KPMG plans to deal with the proceeds from Portus’ Market Neutral Preservation Fund on Monday, June 12.

The fund, Portus’ first product, raised approximately $19.2 million from “accredited investors.”

KPMG is recommending that a claims process be set up, similar to the one already in place for those who invested in the domestic and offshore structures offered by Portus Alternative Asset Management.

A meeting for PAAM investors is scheduled for June 21 in Toronto.

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OSC delays Norshield hearing until October

(June 9, 2006) The Ontario Securities Commission has extended a temporary order suspending the registration of Norshield Asset Management and Olympus United Funds until October 20, 2006.

RSM Richter will continue to monitor Norshield’s financial affairs until the fall hearing.

Norshield retail creditors could be looking at recoveries of as low as three cents on the dollar from their $132 million investment in the failed Montreal hedge fund complex that sponsored the Olympus funds.

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Junior energy stocks lose ground

(June 9, 2006) The median share price of publicly-traded junior oil and gas companies in Western Canada fell 12% in the first five months of 2006. Energy trusts were off 6% in the same period, according to a report by Iradesso Communications.

“Contrary to popular belief, oil and gas stocks haven’t been overheating so far this year,” said company president Peter Knapp. “Higher service costs, a strong Canadian dollar and lower natural gas prices have caused a healthy pullback in prices.”

But the decline isn’t necessarily a bad thing, Knapp adds, since such downward cycles create opportunities for long-term investors in the energy market.

Although most juniors and trusts have lost ground so far this year, stock pickers could have made money in 2006 by holding 18 of the 90 junior companies. The top three gainers over the first five months of 2006 were RSX Energy, with an 83% gain, Mission Oil and Gas, up 72% and Canada Southern Petroleum, which rose 37%, due to recent unsolicited bids.

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BMO to refund $7 million to mortgage customers

(June 9, 2006) BMO says it will be providing refunds to about 28,000 mortgage customers who overpaid penalties on certain mortgage pre-payment and early-renewal transactions.

The total refund amount will be approximately $7.1 million, including interest.

BMO says it identified an inconsistency in the way some mortgage contracts explained how interest penalties were calculated compared to the way the calculations were actually done. This affected a small number of the bank’s fixed-rate, limited pre-payment residential mortgage customers who pre-paid or early-renewed their mortgage, and some of the bank’s farm mortgage customers who early-renewed a fixed-rate mortgage within the last 12 months of the term.

As a result, BMO says, some customers paid less than provided for in the mortgage contracts, while others paid more. BMO will not be attempting to recover any funds from customers who paid less than the should have.

The bank will automatically mail refund cheques to customers whose eligibility has been verified through its electronic database. Customers who believe they may have been affected but who have not received a cheque by June 23, 2006 should contact the bank.

“We regret this situation and apologize for any inconveniences it may have caused,” said BMO senior vice president Lynda Brochu. “We’ve taken the matter very seriously and once the error was discovered we conducted a thorough investigation to identify customers who may have been affected. We intend to fully reimburse any customers who are identified as having been negatively impacted.”

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