Briefly:

(February 25, 2005) Market Regulation Services (RS) has denied reports that it is in merger talks with the IDA. The story was front page news in today’s Financial Post..

In a terse press release, Bill Moriarty, chair of the stock market regulator, flatly stated that the story was false. IDA president Joe Oliver floated the idea of a single self-regulatory organization at the association’s annual conference last summer, arguing the financial services industry and the public it serves might be better off if the IDA, RS and the MFDA joined forces.

“We could create a single organization that would be functional for more fair, efficient and effective self-regulation,” said Oliver in his opening address at the IDA’s 88th annual conference in Mont Tremblant, Quebec.

Oliver argued that a combined SRO would “enhance the competitiveness and reputation of the Canadian capital markets.”

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Regulatory panel to look at OSC structure

(February 25, 2005) The Ontario government’s recently-announced panel to study a common securities regulator will also examine the issue of separating the Ontario Securities Commission’s adjudicative function from its other roles.

“The [standing] committee recommended that we consider that in conjunction with a single regulator,” said Gerry Phillips, chair of Ontario’s management board of cabinet on Thursday in the Ontario legislature. “Consequently, this is one of the issues that we have asked [the] panel to consider in the context of a single regulator.”

University of Toronto professor Ronald Daniels will lead the panel, charged with creating detailed design work on a common securities regulatory structure, including features to ensure a strong local presence and sensitivity to regional issues. The panel will deliver its final report at the end of June.

Phillips says the Ontario government has also started work on establishing a task force to review the role of self-regulatory organizations. “We will be moving forward on this later this year.”

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Stand pat on interest rates, says research group

(February 25, 2005) The C.D. Howe Institute says the Bank of Canada should keep its key overnight lending rate at 2.5%. The institute’s nine-member monetary policy council — comprised of economists and academics — says leaving the rate unchanged is consistent with the central bank’s target of keeping inflation at 2%.

“Although most members thought that the trend of short-term interest rates will be upward in the coming years, many argued that softness of investment and household demand shows that the overnight rate compatible with steady inflation is currently relatively low,” the institute said in a statement.

The panel also recommended that interest rates should remain stable until at least April. The Bank of Canada’s makes its next interest rate announcement on March 1.

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Fidelity promotes from within

(February 25, 2005) Fidelity Canada has appointed Rob Strickland as its new president. Strickland, the firm’s former executive vice-president, replaces David Denison, who left Fidelity earlier this year to take over as head of the Canada Pension Plan Investment Board.

“Rob Strickland has a proven track record as a sales and general manager who aligns a company’s strategic direction based on meeting the needs of its customers,” said Robert Reynolds, Fidelity’s vice chairman and chief operating officer. “There is great opportunity for Fidelity in Canada, and we are delighted that Rob will be leading the charge as we grow our business in this marketplace.”

Strickland, 43, joined Fidelity in 2003 as executive vice president and head of advisor and alliance distribution.

Before joining Fidelity, Strickland held a number of senior positions with TD Bank Financial Group, including president, TD Waterhouse Financial Planning; chief operating officer, Tokyo-Mitsubishi TD Waterhouse Securities in Tokyo; and president, TD Evergreen.

From 1986 to 1994, Strickland was with Nesbitt Burns. He began his career in 1984 with a mergers and acquisitions consultancy specializing in mid-market transactions.

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Ottawa missing the mark on spending projections, says research group

February 24, 2005) The federal government’s projected $3.2 billion increase in program spending should be taken with a grain of salt, says the C.D. Howe Institute, noting that Ottawa has consistently underestimated its forecasts in the past.

For instance, since 1996-97, the increases in program spending in each year’s budget have averaged $2.8 billion. Yet the actual figures for those years have averaged $7.2 billion.

“If Ottawa continues to over-shoot the mark as badly in the years ahead, the federal budget will shortly move back into deficit and Canadians will have convincing evidence that federal parliamentarians have lost control of public finances,” says C.D. Howe’s William Robson.

“Parliament has the power to hold the government to account, and to insist that it presents budgets using the same accounting practices that it will use in reporting its results at the end of the year.”

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Financial information centre issues annual report

(February 24, 2005) The Centre for the Financial Services OmbudsNetwork released its second annual report on Thursday, revealing that it received 1,832 complaints and 723 enquiries.

By comparison, the network, established in November 2002, received 3,513 complaints in its first 13 months of operations.

“In 2004, in most cases we assisted consumers in resolving issues together with complaint-handling professionals at the company level or with the help of one of the industry association consumer assistance centres,” said Pierre Gravelle, the centre’s CEO. “A referral was made to one of the ombudservices [banking and investments, life and health insurance and general insurance] in only 9% of cases. I view this as a positive sign that the system is working well at the company level.”

The bulk of the complaints (37%) were bank-related, while 22% concerned life and health insurance. Only 7% of the complaints were about securities and only 3% were related to mutual funds.

Nearly 70,000 consumers accessed the centre’s website in 2004, up from 45,000 the previous year. “The increase in traffic on the site suggests that consumers are using this resource to find the information they need,” added Gravelle.

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Nearly one-third of Canadians RRSP-less, survey reveals

(February 24, 2005) Twenty-eight percent of Canadian investors do not have an RRSP, according to a poll conducted by Ipsos-Reid for Scotiabank.

The survey also indicates that 60% of those with RRSPs never contribute the maximum amount. “While contributing the maximum allowable amount to an RRSP each year is probably the best way to ensure a secure retirement, any unused contribution room that you have since 1991 is still available to you,” notes Bruce Armstrong, Managing Director, Investment Savings Programs at Scotiabank.

The study found that men (57%) are significantly more likely than women (43%) to believe that they have a good understanding of their retirement fund needs and 65% of men feel in control of their investment priorities, whereas only 52% of women feel the same.

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OSC names small biz committee

(February 23, 2005) The Ontario Securities Commission has named the membership of its Small Business Advisory Committee (SBAC), replacing the original committee after its two-year term.

“We believe that improving the quality of continuous disclosure is integral to the health and efficiency of our capital markets and we are looking to the SBAC to play an important role in our efforts to raise smaller issuers’ awareness of their continuous disclosure obligations,” said Erez Blumberger, the newly named Chair of the SBAC and assistant manager in the OSC’s corporate finance branch. “We are pleased to have been able to form a committee that includes so many diverse and interesting backgrounds. We look forward to receiving the insights of the SBAC.”

The SBAC will provide OSC staff with the small business perspective on a myriad of issues ranging from the proposed national prospectus and registration exemption instrument to the recently implemented continuous disclosure rule.

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Sun Life lands Magna benefits contract

(February 23, 2005) Sun Life Financial’s Canadian Group Retirement Services (GRS) division has landed the group retirement and benefits contract for Magna International. Sun Life will also administer Magna’s Deferred Profit Sharing Plans (DPSP).

“We’re very proud to have been awarded the Magna DPSP, one of the largest plans in the country,” said Kevin Dougherty, president, Sun Life Financial Canada. “The Magna DPSP was one of the first of its kind in Canada and an early innovation in benefits. Magna’s focus on their employees is well-known so it is a real privilege for us to partner with them.”

Magna employs over 23,000 people in Canada .

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BCSC settles with U.S. forex firm

(February 22, 2005) The British Columbia Securities Commission has settled with Forex Capital Markets, LLC, a New York-based foreign exchange trading firm which was operating in B.C. without proper registration.

The firm has agreed to pay C$142,000 for serving 369 client accounts in the province. The firm will not accept any new clients until it has completed the registration process.

The settlement includes registration fees the firm would have had to pay to operate in B.C. since April 2000 had it been properly registered, along with $20,000 towards investigation costs.

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Ontario’s CAs volunteer services

(February 22, 2005) Ontario’s Chartered Accountants are again volunteering to prepare tax returns free of charge for low-income members of their communities. The free service is available to people who earn less than $22,500 with dependents and under $15,000 for those with no dependents.

“This is the 37th year that the Institute of Chartered Accountants of Ontario has co-ordinated this program to help our members take the lead in delivering this valuable community service,” said Ingrid Enhagen, associate director, member services at the institute. “It is amazing how our members always take the time to help those in need, even though it’s the busiest time of the year for a CA. Ontario Chartered Accountants believe strongly in giving back to the communities where they live and work.”

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Anti-laundering course expanded

(February 22, 2005) Ontario’s Centennial College has announced the expansion of its anti-money laundering course, citing strong demand for the training. The three-day course is designed for compliance officers, corporate security personnel and law enforcement.

“The response to the course has been so positive that we are adding a number of extra sessions,” says course coordinator Ed Judd. “We will also be taking the course on the road to the United Kingdom later this spring.”

The course is taught by Chris Mathers, a retired RCMP officer who worked undercover, laundering money for various criminal organizations. He established and operated a number of “storefront” money-laundering businesses in Canada and the U.S. during his career.

For more information on the course, contact Ed Judd, corporate training program manager, at (416) 289-5000, ext. 2534, or edjudd@centennialcollege.ca.

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Accountants urge Goodale to cut taxes

(February 21, 2005) The Certified General Accountants (CGA) of Canada say Finance Minister Ralph Goodale should heed the business community and focus on boosting Canadian productivity through corporate and personal tax cuts in Wednesday’s budget.

In addition to expanding tax brackets and decreasing rates of personal income tax, the CGA would like Goodale to act on key recommendations including a review of the capital cost allowance rates and classes, enhancing the dividend tax credit, as well as tackle key issues related to Canada’s aging population and present concrete ways to enhance the transparency and accountability of government spending programs.

“Cutting taxes will assist us in developing a clear, competitive edge for all classes of Canadian taxpayers, relative to their U.S. counterparts,” says CGA president and chief executive officer, Anthony Ariganello. “We believe this healthy surplus allows sufficient room for prudent tax reductions to benefit all Canadians.”

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CPPIB invests $50 million in Ottawa-based venture cap fund

(February 21, 2005) The Canada Pension Plan Investment Board (CPPIB) today announced a $50 US million investment in a fund run by Celtic House Venture Partners, an Ottawa-based venture capital firm.

The fund will invest in early-stage high-tech firms in the semiconductor, micro-electro mechanical systems, optics and software sectors. The CPPIB invested $13.5 million US in a previous version of the fund two years ago.

Including today’s announcement, the CPPIB has now committed $1.5 to private equity funds, including $590 million to Canadian venture capital.

“As one of the largest venture capital investors in Canada, we continue to selectively commit to Canadian opportunities. We believe venture capital investments will provode attractive, long-term, risk-adjusted returns,” said CPPIB president David Denison.

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Regulators announce youth quiz

(February 21, 2005) The Canadian Securities Administrators has launched an online investment quiz, aimed at youth aged 15 to 21.

More than 65,000 young people will be invited to take the quiz between now and March 21, 2005. “Young people are the group who can get the most benefit from saving and investing now because they have more time to make their money work and grow,” said CSA chair Stephen Sibold.

Young Canadians who take the “Test Your Financial IQ Quiz” and score at least 60% will be entered in a draw to win a digital camcorder. Thirteen winners will be drawn from this pool (one winner per province and territory) and each winner will be invited to produce a short video promoting the benefits of budgeting, saving and investing. The producer of the winning video will be awarded a $2,000 cash scholarship.

The quiz is available at www.tyfiq.ca.

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Orion names new CEO

(February 21, 2005) John Budreski has been appointed chief executive officer of Orion Securities and Orion Financial, the Toronto-based firm announced on Monday.

Budreski has more than 18 years of experience investment banking, institutional sales, mergers and acquisitions and equity capital markets.

Prior to joining the independent investment dealer, he worked with Scotia Capital Markets. Budreski’s appointment takes effect March 1, 2005.

Orion also announced the appointment of Dan Cristall as chair, effective April 1, 2005.