Briefly:

(March 4, 2005) Canada’s two main accountancy groups have called off talks aimed at a merger.

Last May, Certified Management Accountants of Canada (CMA Canada) and the Canadian Institute of Chartered Accountants (CICA) announced the commencement of formal talks to create a single association that would have had more than 100,000 members. But the talks were officially cancelled on Friday.

“This decision follows extensive discussions held over the past year between the leadership of CMA Canada and the CICA, in consultation with their respective governing bodies and members across the country,” said CMA Canada in a release.

“Both CMA Canada and the CICA continue to acknowledge the benefits of a merger. However, despite the best efforts of both organizations, it was not possible to reach agreement on key issues associated with the proposed merger at this time.”

• • •

Brown to join accountancy oversight board

(March 4, 2005) Ontario Securities Commission chair David Brown has been appointed to a three-year term to a new international oversight board for accountants.

The Public Interest Oversight Board will oversee the activities of the International Federation of Accountants in setting audit performance standards, independence and other ethical standards, audit quality control standards and education standards,” the OSC said in a release issued today.

“I am honoured to have been selected to be part of this important new initiative to ensure that the activities of the accounting profession properly reflect the interests of investors and the public,” said Brown.

“Higher quality auditing standards, coupled with strengthened oversight of auditors of public companies, are key elements that regulators have identified as necessary to improve the quality of external audits of individual companies around the world,” added Brown, who joins seven other renowned experts on the panel, including the vice-president of the World Bank and a former commissioner of the U.S. Securities and Exchange Commission.</pP

Brown ends a seven-year term as chair of the OSC on June 30.

• • •

Scotia Securities free to invest in shares of parent company

(March 4, 2005) Scotia Securities has received regulatory approval to invest in common shares of the Bank of Nova Scotia.

Scotia Securities set up an independent board last fall to oversee such investments, a condition imposed by regulators to avoid potential conflicts of interest, the last of the big bank-owned fund companies to apply for such an exemption.

The three-person board will review decisions made by Scotia Securities “in order to be satisfied that the decisions to buy, sell or hold common shares of the bank represent the judgment of the portfolio manager, uninfluenced by considerations other than the best interests of the funds and that these decisions were made free from any influence of the bank.”

The board, chaired by finance professor Eric Kirzner, will review fund manager purchases of Scotiabank stock at least once per quarter.

• • •

Dundee announces $45 million share offering

(March 3, 2005) Dundee Wealth Management has arranged a bought deal share offering worth more than $45 million.

Under the arrangement, a syndicate of underwriters, including GMP Securities, Dundee Securities, RBC Dominion Securities, Scotia Capital, Canaccord Capital, Wellington West and Sprott Securities will purchase 4.5 million common shares of Dundee Wealth at a purchase price of $10.10 per share.

The underwriters also have the option to purchase up to an additional 450,000 common shares at the same purchase price.

The share offering, scheduled to close March 22, still requires approval from the TSX and securities regulators.

The proceedings will be used to finance growth opportunities and for general corporate purposes, Dundee says.

• • •

Industrial Alliance expands to Ontario securities market

(March 3, 2005) Montreal-based Industrial Alliance Insurance and Financial Services is beefing up its presence in the Ontario market, today announcing a partnership with Toronto’s KingsGate Wealth Management.

Under the terms of the deal, Industrial Alliance and KingsGate will enter into a business development and services agreement, which involves the purchase of certain assets of KingsGate Securities.

KingsGate Wealth Management Services, along with all wholly-owned subsidiaries, will remain the exclusive property of KingsGate.

“This transaction, which is subject to approval by regulatory authorities, will allow Industrial Alliance Securities to spearhead its expansion in the Ontario securities market and will bring to KingsGate additional resources to pursue its development strategy,” the firms said in a joint release.

Financial details were not released, but Industrial Alliance says the agreement will boost its securities assets under administration ($1.2 billion at the end of 2004) by more than 30%.

Industrial Alliance has been aggressively bulking up in recent years. Recent acquisitions include National Life and Co-operators Mutual Funds.

• • •

PlanPlus partners with Cannex on new software

(March 3, 2005) PlanPlus has released a new web-based software program designed to help deposit brokers and financial advisors better manage their deposit-taking business.

PlanPlus DIME is integrated with the Cannex Financial Network (which provides interest rate information from all major financial institutions) and allows the electronic purchase of GICs and term deposits at 16 financial institutions, also through Cannex.

In many cases, this eliminates the need for advisors to submit paper or fax applications to participating financial institutions as well as the need to handle the resulting confirmation information manually, PlanPlus says in a release.

“The deposit-taking business is difficult for advisors because they receive very little compensation, compared to other financial products, yet it remains one of the most paper-based and labour-intensive businesses” said PlanPlus president Shawn Brayman.

“Cannex provides PlanPlus DIME clients with daily summaries of current interest rate information for GICs, Term Deposits, GIAs, RRSPs and RRIFs, adds Cannex president Alex Melvin. “Instead of having to gather and compile this information manually, PlanPlus DIME clients now have reliable data from Cannex at their fingertips.”

The software was developed with the assistance of Page Deposit Brokers.

“We continuously ran into challenges where advisors had their client’s mutual fund information in the dealer back office but recorded the GIC business elsewhere,” Brayman notes. “The opportunity to work with Page provided us with an excellent opportunity to fill this need and improve our advisory tools at the same time.”

• • •

CI launches callable deposit notes

(March 2, 2005) CI Mutual Funds and Skylon Advisors today launched the second series of the Bank of Montreal CI C.A.P.I.T.A.L. Deposit Notes, Callable Class. The company added the product after capping sales on the first series, launched January 4.

The notes, issued by Bank of Montreal, provide 100% principal protection at maturity and the opportunity to participate in returns of the CI Canadian Investment Fund, managed by Kim Shannon, and the Signature High Income Fund, managed by Ben Cheng and Matt Shandro.

As well, the bank may redeem or call the notes after three years for a price equivalent to the annual compounded rate of return of 10%. The notes are designed for conservative investors, those on the sidelines with high cash holdings, or for those who hold equities but want principal protection.

The notes are for sale until April 22, 2005. If the bank does not call the notes in April 2008, the series is scheduled to mature in April 2011. The management expense ratio is 2.95%. Front end selling commissions are 4.25%. There are no trailer fees. Minimum investment is $2,000.

• • •

RBC releases annual homeownership survey

(March 2, 2005) RBC Royal Bank says 2005 is going to be another banner year for Canada’s housing markets with young clients between 24 and 34 years of age leading the way in home purchases.

The 12th Annual Homeownership Survey of 2,001 Canadians found that 29% of Canadians, up 3% since last year, say they intend to purchase a home or anther house in the next two years.

The largest increase among people most likely to purchase homes came from the youngest sector of the economy and provinces like Alberta and Ontario. Participants who said they were very likely to buy homes in the next two years jumped 3% in both provinces to 17% in Alberta and 14% in Ontario. Quebec had the fewest potential homebuyers with only 11% saying they intended to make a house purchase.

Overall, trading up is still the most popular reason given, but the number of homeowners wanting to downsize has increased considerably in the past year. More than 40% of those surveyed, down six points from 2004, say they plan to buy a bigger home than the one they live in now, but 30%, up 10 points, say they plan to buy a smaller house.

• • •

Central bank leaves interest rates unchanged

(March 1, 2005) The Bank of Canada is keeping the key overnight lending rate at 2.5%, noting that the economic environment has been consistent with its forecast.

Although growth in the last quarter of 2004 was somewhat lower than expected, “upward revisions to growth earlier in the year imply a level of economic activity at year end that is in line with the bank’s expectations,” the Bank of Canada said in a brief statement accompanying today’s rate decision.

The outlook for the Canadian economy and inflation are essentially unchanged since January, when the central bank released its latest monetary policy update.

“Consistent with this assessment, the bank decided to leave the target for the overnight rate unchanged.” The decision came as no surprise to economists, who expect the central bank to stay on the sidelines at least the summer.

“While rates will remain unchanged for now, we see the path for them moving up over the second half of the year,” says TD economist Carl Gomez.

The next interest rate announcement is scheduled for April 12.

• • •

Mackenzie proposes fund mergers

(March 1, 2005) Mackenzie Financial is seeking investor approval on a pair of mergers which will result in the elimination of two Keystone funds.

At a meeting scheduled for May 20, unitholders will vote on a proposal to merge the Keystone Premier Euro Elite 100 Capital Class fund into the Mackenzie Ivy European Capital Class fund and to fold the Keystone Premier Global Elite 100 Capital Class fund into the Mackenzie Ivy Foreign Equity Capital Class fund.

Mackenzie says the mergers are a result of an ongoing strategic review of its fund lineup.

• • •

MFDA moves forward on investor protection fund

(February 28, 2005) The MFDA has released for comment an updated version of its proposed $30 million investor protection fund.

The revised application would increase customer account coverage to $1 million from $100,000 in the initial proposal and extend coverage to all products sold by MFDA members, not just mutual funds.

MFDA president Larry Waite says the fund industry association wanted its coverage to be identical to that offered by the already-established Canadian Investor Protection Fund (CIPF). “There’s less investor confusion this way. CIPF covers all products held by the dealer as well.”

The investor protection fund was first proposed by the MFDA in 2001. But following comments from members and lengthy debate within the industry, the association started talks with the CIPF aimed at establishing a single fund.

However, last year the MFDA announced that in order to complete the process by 2005 (a deadline set by the country’s securities regulators), it would have to go back to its original plan and create a separate fund, while leaving the door open for a possible merger with CIPF in the future.

The comment period expires at the end of March. “Depending on the comments we receive, this could be up and running very quickly or it could take months,” says Waite.

• • •

Altamira sets up independent review committee

(February 28, 2005) Altamira has joined the growing number of mutual fund firms establishing independent review committees. Similar to other IRCs, Altamira’s has a narrow mandate: mainly to review investments by Altamira in common National Bank shares, since Altamira is a wholly-owned subsidiary of the bank.

“The primary mandate of the IRC is to review, at least quarterly, the purchase, sale and continued holdings by Altamira funds of common shares of the bank and ensure that they represent the business judgment of the portfolio manager, uninfluenced by considerations other than the best interests of the funds,” the firm said in a release today.

Altamira’s committee has four members: Jean Durivage, Yves Julien, André Godbout and Jean-Francois Bernier.

Last year, AIM Trimark created an IRC, as did Scotia Securities, the last of the bank-owned firms to take that step. Some industry executives view IRCs as getting a jump on the regulators, who are expected to introduce a broader fund governance regime sometime this year.

• • •

First Asset to launch small-cap passive income fund

(February 28, 2005) First Asset Funds has filed a preliminary prospectus for a new small cap income fund, based on trusts listed on the TSX.

The First Asset Equal Weight Small Cap Income fund, designed to provide unitholders with monthly cash distributions, will invest in an equally-weighted portfolio of about 73 small-cap TSX-listed income trusts, with market caps between $50 and $400 million.

“As a result of the equal weight approach, each small-cap income trust would constitute approximately 1.37% of the portfolio,” First Asset says. The portfolio will be rebalanced annually to maintain the equal weighting.

• • •

Acquaint publishing independent financial newsletter

(February 28, 2005) Acquaint Financial — which provides independent financial education and advice for pension plan members — has launched a financial newsletter.

The Financial Education Forum, published four times a year, will explore trends, review recent research and provide professional commentary on various financial topics, the company said today in a release.

“Part of our mandate is to educate organizations on the importance of providing employees with independent and unbiased financial education programs,” says Acquaint president Asaf Shad. “Our goal with Financial Education Forum was to develop an unbiased source where employers could turn to learn more about employee financial education and the importance of true independence.”

The first issue of the newsletter was sent out last week, Acquaint says.

• • •

Many Canadians ignoring T4s, survey suggests

(February 28, 2005) A significant number of Canadians don’t check T4 statements from their employer, according to a survey conducted by Environics for ADP Canada.

The survey found that 25% of Canadians don’t read their T4s and 20% only check total employment income, ignoring all the other boxes on the statement.

“Not checking your T4 is like not reading the fine print on a contract — it may not make a difference every time, but it could lead to big problems down the road,” says Angela Haier of ADP Canada.

“A small mistake on your T4 can impact your ability to pay your taxes on time, pay the correct amount of taxes or, even worse, cause a delay in receiving your tax refund,” she adds.

Further, the survey indicates that Canadians don’t know what to about missing T4s, with about one-third saying they would either call CRA or do nothing. In fact, the first call should be to the employer, ADP notes.

ADP has processed more than three million T4s this year.

• • •