By Staff | December 5, 2005 | Last updated on December 5, 2005
9 min read

(December 9, 2005) The Canadian Investment Funds Standards Committee (CIFSC) has announced the appointment of Ralf Hensel as chair of the committee. Hensel is senior legal counsel at IFIC. This marks the first time CIFSC has named a chair from IFIC.

“I am honoured, although I was thinking about demanding a recount,” Hensel joked upon being informed of his acclamation. He replaces outgoing chair, Rudy Luukko.

“I would like to express my appreciation to Ralf for taking on this additional role, after having restored IFIC’s presence on the committee since coming aboard in January 2005 and quickly establishing himself as an active and effective member,” said Luukko. “To borrow a phrase from Ralf, it has been an honour for me to serve as the 2005 chair, in what turned out to be a very eventful year. I look forward to working under Ralf’s leadership during the year ahead.”

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CRA announces 2006 indexation rates

(December 9, 2005) The CRA has released the 2006 indexation adjustments for personal income tax rates, raising the levels by 2.2% to reflect inflation. On top of that, there are legislated increases to various credits, including $700 on the basic personal amount, bringing that amount to $9,039 from $8,648.

The amount at which the 22% tax rate kicks is has been adjusted to $36,378, with the 26% tax rate payable on income above $72,756. The top tax bracket of 29% is payable on income above $118,285.

Other increases include $595 to the spouse or common-law partner amount; $300 on the maximum annual Child Disability Benefit to $2,300, starting in July 2006; and a $250 increase in the maximum refundable medical expense supplement to $1,000.

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IG boosts food bank awareness

(December 9, 2005) Investors Group has teamed up with the Canadian Association of Food Banks for the third year, in the annual Food for Thought campaign aimed at raising public awareness of the role of food banks.

The Investors Group 2005 campaign features a national advertising campaign using outdoor advertisements in major cities across the country. Donations to local food banks can be made at Investors Group offices across the country.

“The national awareness campaign is very important to help raise awareness of the hunger problem across Canada”, said Richard Irish, assistant vice-president of community affairs for Investors Group. “At the community level, the hands-on work at local events organized by Investors Group volunteers and involving a spectrum of community volunteers, local businesses and corporations make a real difference on an ongoing basis.”

The advertising blitz began in mid-November and will be completed prior to Christmas. About 800,000 Canadians use a food bank every month.

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CI calls for scrapping GST on fund fees

(December 8, 2005) CI Financial has issued an open letter to the leaders of all federal parties, calling for them to eliminate the GST charged on the management of mutual funds.

“The GST was introduced as a consumption tax, yet savings are not consumption,” said Stephen A. MacPhail, CI president and COO. “This unfair application of the GST is draining an estimated $750 million a year from the nest eggs of Canadians and we are asking Canada’s political leaders to put a stop to it.”

With about one-third of adult Canadians owning mutual funds, most fund companies have called for the GST elimination in the past.

“It’s important that these Canadians are aware they are paying what amounts to a hidden and unjustified tax on their savings,” MacPhail said. “We also believe that people should take advantage of the federal election campaign to speak to their local candidates about this issue.”

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Northern calls for more open access to private placements

(December 8, 2005) Current securities legislation places unfair restrictions on individuals seeking access to potentially lucrative early stage investments, according to Northern Securities, and the firm is calling for an overhaul of the rules governing private placements.

“Having money, earning money or having a certain net worth are not necessarily indicative of investor sophistication,” said Vic Alboini, chairman and CEO of Northern Securities Inc. “Instead the focus should be based on whether an investor can sustain a complete loss of his investment.”

Northern proposed that investors with a minimum of $200,000 in liquid assets be eligible to participate in private placements provided that they do not invest more than 15% of their liquid assets in a single private placement, or 25% in a series of private placements. The suggestion was made to the IDA Task Force on Modernizing Securities Legislation in Canada.

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Fundcos face class action

(December 7, 2005) A class action suit has been filed against four fund companies involved in last year’s market-timing controversy. The suit claims IG Investment Management, CI Mutual Funds, Franklin Templeton Investments, and AGF Funds were in breach of their fiduciary duty by allowing frequent trading in certain funds.

“In allowing market timed trading to occur, the Management Companies did not act in the best interests of all fund investors and appear to have favoured the interests of market timers over long-term investors of the funds,” said Joel P. Rochon, a partner at Rochon Genova LLP, the law firm filing the action. “The actions of the Management Companies have affected thousands of Canadian investors who have unwittingly been deprived of hundreds of millions of dollars in investment savings.”

The filing acknowledges that the companies already paid out about $150 million to the unit holders, as required by the OSC, but the suit claims this amount only scratches the surface of the actual damage done to unit-holders.

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Federal tax expert joins Ogilvy Renault

(December 7, 2005) Ogilvy Renault has announced Len Farber, formerly a senior federal tax official, will join the firm’s tax group as senior advisor on January 3, 2006.

“I am pleased to welcome Len Farber to our team,” said Adrienne Oliver, partner and co-chair of Ogilvy Renault’s tax team. “The addition of Len will significantly enhance the depth of our national team and provide our clients with a unique and insightful perspective on tax policy issues.”

Farber’s practice will be based out of the firm’s Ottawa office and will focus on advising clients on tax policy issues, assist in the resolution of tax disputes. Farber spent 30 years in public service, most recently as general director, tax legislation branch of the Department of Finance.

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TSX shatters records

(December 6, 2005) Tuesday marked a record on the Toronto Stock Exchange, as the total value of trades for the year surpassed $1 trillion for the first time.

“This record is just the next step in an expanding acceptance of our market model around the world,” said Richard Nesbitt, CEO of TSX Group. “We are the global leader in mining listings, we list more energy companies than any other exchange around the world and we have been leaders and innovators in structured products and exchange-traded funds.

“Our market has seen the third highest amount of money raised by issuers of any of the world’s exchanges in 2005. Canada is obviously a market the world is watching.”

The previous record was set in 2000, when the value for a full year of trades hit $944.25 billion. The record for trading volume was set in 2004, when 61.2 billion shares changed hands. With about three weeks left to the 2005, volume currently stands at 59.2 billion shares. This year has already set a record for the number of trades, at more than 50 million.

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Tomic leaves RBC for Wellington

(December 6, 2005) Wellington West Capital has announced the appointment of Doce Tomic as executive vice president, asset management, effective immediately. Tomic comes to Wellington West from RBC, where he was head of the wealth management division for Canada.

“I’m really pleased that Doce is joining us at this crucial juncture in our evolution as a Firm,” stated Wellington’s chairman, Charlie Spiring. “His experience will be invaluable as we grow our wealth management activities across Canada.”

Tomic will also join Wellingtons five man strategic executive team, which operates as Wellington’s “executive committee” and has executive oversight over all aspects of the firm’s operations.

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Clarington unwavering in support of IA bid

(December 6, 2005) The board of directors at Clarington has re-affirmed its support of a takeover bid by Industrial Alliance, after the suitor boosted its offer to $15 per share.

“In view of this improved offer, the $14.75 per share proposal made by CI Financial in its letters to Clarington of November 18 and 23, 2005 no longer constitutes a competing transaction for the purposes of Clarington’s support agreement with Industrial Alliance,” the board said in a press release.

Clarington has been granted an extension by the securities regulators for filing and delivering its directors’ circular in connection with the Industrial Alliance offer. Clarington says it will mail its directors’ circular addressing the latest bid no later than December 8, 2005. On Monday, CI said it was evaluating its position.

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Canadians concerned about pension funding crisis

(December 6, 2005) Four in five Canadians are concerned that a pension underfunding crisis exists in Canada, according to a Conference Board survey.

According to the study, 34% of 2,000 Canadians surveyed in September were very concerned about the pension underfunding situation in Canada, while 29% were somewhat concerned, and 17% were mildly concerned.

The results are similar to the findings of the second annual Conference Board-Watson Wyatt Worldwide survey of chief financial officers on pension risk, released earlier this year, the board noted.

“Actuaries and financial managers aren’t the only people concerned about the state of pensions in Canada — the general public is also worried about having enough for retirement,” said Conference Board senior research associate Edward Reed. “With the workforce aging, pension issues are moving to the forefront. Not only are organizations looking for ways to make their pension plans sustainable, they are also trying to use them as an effective attraction and retention tool.”

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Manulife launches UL asset allocation tool

(December 5, 2005) Manulife Financial has launched a new online tool called UL Simplicity Select to assist advisors in planning their client’s asset allocation within a universal life policy.

According to research conducted by and commissioned by Manulife, only 49% of advisors are comfortable selecting and recommending investments within a UL policy. Forty per cent said they were interested in a sales process that would automatically recommend appropriate universal life accounts based on the client’s risk profile.

“Advisors have told us that they want help in selecting investment accounts at the time of sale for their client and they also want accounts that are easy to manage once the policy is in effect,” said Paul Lorentz, Manulife Financial’s vice president, product and marketing, individual insurance. “We sponsored this survey to determine if what we were hearing was the general consensus of advisors…the results confirm it is.”

From the Manulife advisor website, users can enter the risk profile of the client and UL Simplicity Select will choose the appropriate Simplicity Portfolio Account. The tool became available December 3, 2005 for Manulife’s InnoVision and previously sold UL100 policies.

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Labour funds join forces

(December 5, 2005) Ontario-based Axis Investment has been acquired by B.E.S.T. Capital Management (BEST). Financial terms were not released, but the deal is expected to close on February 1, 2006, pending regulatory and closing conditions.

Axis, which has about $14 million in assets, focuses mostly on privately-held start-up software and wireless technology companies.

“We believe that it is in the best interests of the shareholders of the fund to become part of a larger LSIF manager that shares the same management and investing style as Axis,” says Axis president Doug Hewson.

BEST, established in 1996, runs the Business, Engineering, Science & Technology Discoveries Fund and B.E.S.T. Total Return Fund, with a combined $60 million in assets.

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SEDI seeks insider’s opinions

(December 5, 2005) The Canadian Securities Administrators is conducting a survey to see how it can make the System for Electronic Disclosure by Insiders, or SEDI, more user-friendly.

SEDI suffered several false starts before it finally got off the ground in 2003, two-and-a-half years after its conception. The system was to launch in 2001, but was delayed a year. Two weeks after going online in 2002, SEDI was unplugged again due to technical problems.

“Regulators from coast to coast encourage all SEDI users and interested parties to participate in research on how the system can be improved or streamlined,” said CSA chair Jean St-Gelais.

Registered users are asked to respond to 41 questions while the public is being asked to answer 27 questions. In both cases, many of the questions are made up of multiple parts. The survey is available at:

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OpenSky launches new series of notes

(December 5, 2005) OpenSky Capital today introduced a new series of principal protected asset allocation notes, guaranteed by Société Générale.

The notes offer investors access to a portfolio of assets diversified by asset class and geographic regions, OpenSky says, with an annual compound rate of return of up to 10.5% over eight years and 100% capital protection at maturity.

Each year, on the anniversary date of the notes’ issuance, the asset with the best performance, as measured from the settlement date, will be selected and capped at 110.5% of the starting asset level. The asset is then discarded from the portfolio for the purpose of calculating future locked-in performances. Repayment at maturity will be calculated on the principal amount by multiplying each of the eight locked-in performances, at a maximum of $228.28 per note, including repayment of principal.

The notes are available to investors until January 25, 2006 with an up-front selling commission of 4%.

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