Firm leaves IIROC over regulatory burden

Fraser Mackenzie Holdings (FMH), the parent company of Fraser Mackenzie Limited, has voted in favour of voluntarily winding-up its operations.

It says it has notified regulators of its intention to resign Fraser Mackenzie Limited as an IIROC member.

This decision is based on the company’s assessment of the current business climate for small, independent investment dealers. It finds markets aren’t supportive of acceptable rates of returns.

Read: Small firms fight for survival: IIAC

That’s because revenue prospects have changed dramatically. For example, FMH says, “Institutional interest in early stage mining and oil & gas companies—sectors to which we have been heavily committed—has considerably diminished as has the associated trading in the equities of these early stage resource companies.”

It adds, “The regulatory cost burden is increasing at a time [when] industry-wide revenues are declining. On balance, it makes sense for our shareholders to deploy capital elsewhere [rather than] depleting it in anticipation of an unpredictable market turnaround.”

It’s anticipated that the liquidator of the companies will sell surplus assets, which may include the right to the use of the company name, Fraser Mackenzie, in the securities industry.

The name is already associated with Fraser Mackenzie Merchant Capital, which currently works with private companies and assists them with capital raising and other advisory services.

Read:

Wrong time for OSC fee hike

Two ways to reduce compliance costs

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.