By Staff | October 25, 2004 | Last updated on October 25, 2004
5 min read

(October 29, 2004) In an unusual move, the British Columbia Securities Commission (BCSC) has denied a request by the IDA to increase penalties against a rogue broker.

Last year, Robert Gawthrop admitted to violating IDA rules by selling “off-book” investment products.

In 2001, Gawthrop, while working for Dundee Securities, referred some clients directly to a biotech fund, accepting a 10% commission in investments totalling $235,000.

After Gawthrop was fired by Dundee, an IDA District Council fined him $5,000, and ordered him to pay back $7,500 and costs of $3,500.

However, IDA staff later applied to the BCSC for a penalty increase, arguing that the IDA panel “proceeded on incorrect principles and failed to protect the public interest.”

In a statement today, the BCSC noted that though it does not generally interfere with a decision from a self-regulatory organization like the IDA, “we cannot say that the hearing panel’s decision … is clearly wrong or that it clearly failed to protect the public interest.”

• • •

Clarington, Mavrix launch closed-end trusts

(October 29, 2004) Clarington Investments and Mavrix Fund Management both launched closed-end trusts this week. These are the Clarington Diversified Income and Growth Fund and the Mavrix Balanced Income and Growth Trust.

Both funds aims to provide unitholders with monthly cash distributions equivalent to a 7% yield per annum based on the original issue price of $10.00 per unit.

Clarington’s trust closes on November 17 while Mavrix’s new offering is open to investors up to November 23.

• • •

BMO Nesbitt Burns launches new funds of fund

(October 28, 2004) BMO Nesbitt Burns has announced the roll-out of three new fund of fund portfolios, available to clients November 1, 2004.

“The new portfolio funds will help take the guesswork out of fund selection and asset mix by providing oversight of the funds and managers involved,” says Connie Stefankiewicz, senior vice-president and managing director, BMO Nesbitt Burns.

Based on the recommendations of Peter Loach’s mutual fund research team at BMO Nesbitt Burns, the new portfolios will be composed of third-party mutual funds and will be managed by Gino Di Monte at Jones Heward Investment Counsel Inc.

The new portfolio funds will be named BMO Nesbitt Burns Balanced Portfolio Fund, BMO Nesbitt Burns Growth Portfolio Fund, and BMO Nesbitt Burns All Equity Portfolio Fund.

• • •

Mavrix closes flow-through LP

(October 28, 2004) Mavrix Fund Management Inc. has announced the closing of the Mavrix Resource Fund 2004 II Limited Partnership, raising gross proceeds of $18 million.

As manager of the flow-through fund, Mavrix will invest in the Canadian mining sector, which has been enjoying a surge in commodity prices in recent years. Final closing of the fund is on November 16, 2004.

• • •

TD Securities pays BCSC fine

(October 28, 2004) TD Securities Inc. has paid the British Columbia Securities Commission $50,000 in a settlement of charges involving investments made through the firm by Grafton Global Management Ltd. in 1996.

In March of that year, Grafton clients invested $4 million in Valley Mortgage and Investment Company Ltd., believing they were investing in TD mortgages. In March 1997, TD Securities purchased Grafton Global and George Melvin Grafton joined TD Securities.

In 1999, mortgages underlying the Valley investments were in default, but despite this, TD Securities continued to list the value of the investments at the purchase price in the client statements. The settlement acknowledges that TD Securities voluntarily settled with the investors and revised its compliance procedures.

• • •

Canadians fail to review insurance policies

(October 27, 2004) While many Canadians accept that they need life insurance, few bother to review their policies and coverage despite major changes in their lives, according to a study released today by RBC Insurance. While 70% have life insurance, 61% of those who have coverage review it less than once a year.

“Having the correct amount and type of life insurance is important and keeping your coverage up-to-date ensures that it doesn’t fall short when it’s most needed,” said Neil Skelding, president and CEO, RBC Life Insurance Company.” Canadians should review their insurance coverage on a regular basis, particularly around major life events, such as a marriage, the purchase of a home or the addition of children.”

Respondents often cited choosing the right coverage and policy terms as a major difficulty, whether it was deciding the type of coverage, the amount or simply understanding the policy.

• • •

CAFA names new provincial sponsor

(October 27, 2004) The Canadian Association of Farm Advisors (CAFA) has announced its new provincial sponsor for Ontario, ACC Farmers’ Financial, a not-for-profit provider of operating loans.

CAFA is a national, not-for-profit organization dedicated to helping farm businesses by increasing the skills and knowledge of farm advisors, including accountants, lawyers, lenders, financial planners, human resource specialists and agrologists. CAFA has local chapters from B.C. through to Eastern Ontario.

• • •

Criterion launches new trust

(October 26, 2004) Criterion Investments has announced the launch of its inaugural offering, filing a preliminary prospectus for the Criterion Business Trust TA Fund.

The fund aims to generate tax-efficient monthly distributions, based on a passively managed portfolio of established, Toronto-listed high-yielding business trusts, and return to unitholders at least the original issue price at maturity in 10 years.

Criterion is the retail-structured products subsidiary of VenGrowth Capital Partners.

• • •

RBC awards scholarships to high school students

(October 26, 2004) RBC Financial Group has announced the winners of its annual financial life-skills scholarship program, honouring 10 Canadian high-school students with scholarships worth $2,004 each.

The program, introduced in 2002, recognizes students who have already been accepted at a college or university and have shown leadership in other areas, such as community involvement and volunteer service.

“The winning students have all demonstrated hard work, enthusiasm and a solid understanding of the importance of money management and financial planning for their future,” says RBC’s Kathryn Whalley.

The money can be used for tuition, books or any other school-related expenses.

• • •

TD launches new version of U.S. money market fund

(October 25, 2004) TD Asset Management has introduced a premium version of its TD U.S. Money Market Fund. The fund charges a “competitive” management fee of 0.39%, allowing for a higher yield, TD says. As of last week, that yield was 1.47%.

Launched two weeks ago, the fund provides a “low-cost, attractive yield investment alternative for individuals and businesses focused on U.S. currency,” TD says. The money market fund has a minimum investment of US $250,000.

• • •

Pooled pension funds flat in Q3

(October 25, 2004) Canadian pooled pension funds gained a scant 0.1% in the third quarter of 2004, according to the latest performance survey from Mercer Investment Consulting.

Pooled funds returned 0.3% in Q2, but year-to-date are up 4.5%.

“Positive returns in Canadian equities and bonds were largely offset by the negative returns on foreign equities and were exacerbated by the strength of the Canadian dollar,” said Mercer principal Peter Muldowney.

Canadian bonds were the best performing asset class in Q3, followed by Canadian equities. Foreign and U.S. equities were the worst performers.

• • •

Pension plans get voluntary guidelines

(October 25, 2004) Canadian pension plans will now have to meet 11 governance principles covering fiduciary responsibility, oversight, compliance transparency and risk management, among others. They are the result of a three-year consultation undertaken by the Canadian Association of Pension Supervisory Authorities (CAPSA).

“We have listened to pension plan administrators and stakeholders in finalizing the governance guidelines,” said CAPSA chair Nancy MacNeill Smith. “We are confident that the guidelines will help pension plan administrators implement effective governance systems for their pension plans.”

While the guidelines are voluntary, the regulators expect plan administrators to “take measures necessary to follow the guidelines.”

• • • staff


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