By Staff | April 10, 2006 | Last updated on April 10, 2006
11 min read

(April 13, 2006) Mackenzie Financial is launching new versions and purchase options on a number of existing mutual funds, beginning May 1, 2006.

The company is expanding its T-Series option, currently available on 12 of the company’s balanced funds, to include the Mackenzie Maxxum Dividend Fund and Mackenzie Cundill Value Fund. T-Series shares provide a steady monthly cash flow from investments, with a portion of that monthly income paid to investors as “return of capital.” Distributions that return a client’s original investment each month are non-taxable, but the return of capital does reduce an investor’s cost base for tax purposes.

The T-Series units aim to provide monthly distributions of 8%, based on the calendar year-end net asset value, adjusted annually. The company plans to offer front end, back end and low load versions of both equity funds under the T-Series umbrella.

Mackenzie has also added a U.S. dollar purchase option for the T-Series Mackenzie Cundill Global Balanced Fund and the Mackenzie Ivy Global Balanced Fund. This allows investors to purchase front-end, deferred sales and low load units of the funds in U.S. dollars. Monthly distributions will be calculated based on the underlying Canadian net asset value, and will be converted monthly to U.S. dollars at the current exchange rate.

Finally, the company is launching U.S. dollar denominated, low load versions of 15 of the company’s foreign funds. The company says U.S. dollar purchase options are being provided as a convenience to investors, but says it does not act as a hedge against currency fluctuations between the Canadian and U.S. dollar.

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GMP expands into Vancouver

(April 13, 2006) GMP Private Client is launching a full service retail investment branch in Vancouver. Headed by founding partners Douglas Lambert, Robert Byler and Jeff Sandler, the group plans to build a team of highly experienced advisors to serve the high net worth market in the city.

“Vancouver is a key market for GMP,” says Kevin Sullivan, chief executive officer of GMP Securities, the institutional brokerage arm of parent company, GMP Capital Trust. “It supports our integrated model of serving Canadian entrepreneurs and high net worth individuals as they finance their business, as well as in managing and preserving the wealth we have helped them create.”

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Scotiabank approved to trade in China

(April 13, 2006) Scotiabank has become the first Canadian bank to receive approval from the China Securities Regulatory Commission to trade in Renminbi-denominated shares, treasury, corporate and commercial bonds listed on domestic Chinese markets.

Along with obtaining Qualified Foreign Institutional Investors status from the regulatory authority, the bank also obtained permission to conduct derivatives activity in the country, giving Scotiabank the ability to offer interest rate, currency, commodity and other derivative products to foreign and local Chinese companies and financial institutions.

“We are very pleased to be the first Canadian bank to have been granted QFII status in the People’s Republic of China,” says Rob Pitfield, executive vice president of international banking. “We have been working to expand the services available to our clients in this country, and the addition of the QFII and the ability to offer derivative products mark further important milestones in this progress.”

The company has been operating in China for more than 20 years after opening its first Beijing representative office in 1982. Earlier this year, the bank announced it had received approval to convert its representative office in Shanghai to a full branch, making it the only Canadian bank in the city.

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UBS raises oil price forecast

(April 12, 2006) UBS Investment Research says it expects oil prices to remain above $60 a barrel until at least 2008. UBS has bumped up its 2008 oil price forecast to $62 from $43. Projections for 2006 and 2007 remain unchanged at $64 and $66, respectively.

“Despite talk that high oil prices will lead to demand destruction, UBS forecasts demand growth of 1.7%, 2.1% and 2.2% respectively for 2006-2008,” UBS said in a report released on Wednesday. “Driven by geopolitical tensions in Nigeria, Iraq and Iran coupled with Chinese demand growth, we see oil prices remaining strong in the near future.”

Beyond 2008, the outlook may shift, UBS warns. “Going out three years we have a less bullish view as cautious projections of supply evolutions and our view on demand could see prices retreating. However, we are quick to note that potential supply disruptions and continued geopolitical tensions could keep prices from falling to our forecasted levels.”

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Calgary rep fined by IDA

(April 12, 2006) The IDA has fined Calgary-based Kara Lee Cubbon $22,500 for several violations of the brokerage industry association’s policies.

In a settlement agreement Cubbon, who worked for National Bank at the time of the violations, admitted that on four occasions, from March 2000 to November 2000, she participating in distributions of three corporations to 52 clients, in contravention of the firm’s policies.

In addition, Cubbon engaged in personal financial dealings with two clients by soliciting trades in securities to the benefit of the clients without the consent of her firm.

Cubbon, who is currently working at the Calgary branch of Scotia Capital, was also ordered to pay $10,000 in costs and rewrite the Conduct and Practices Handbook exam. She will also be subject to strict supervision for a six month period.

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Financial agency introduces FAQ database

(April 12, 2006) The Financial Consumer Agency of Canada has added a searchable database of frequently asked questions to its website, intended to help Canadian consumers find the answers to commonly asked queries about financial products and services.

“If a consumer has a question about financial services or banking, it may well be that someone else has asked the same question before,” said FCAC Commissioner Bill Knight. “Our new online tool can help Canadian consumers find the information they are looking for when it comes to financial services and products, and also find out about their rights and responsibilities when dealing with federally regulated financial institutions.”

The questions and answers in the database are based on thousands of questions, comments and complaints from consumers that FCAC responds to every year. The new database encompasses a wide variety of financial topics, including banking, credit cards, insurance, investments, personal loans and mortgages.

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IPC signs long-term deal with CARP

(April 12, 2006) Investment Planning Counsel has signed a ten-year advisory agreement with the Canadian Association of Retired Persons. Under the terms of the deal, IPC will become CARP’s recommended wealth management company, providing a full range of financial products and services to CARP’s more than 400,000 members.

All CARP members will have access to an IPC advisor, a complimentary financial review, and annual financial updates.

In addition, IPC advisors will host education seminars for CARP members in cities and local communities across the country on financial planning issues.

“We are honoured to be chosen to serve such an extensive and dynamic group of Canadians,” said IPC president Chris Reynolds. “At IPC our mandate is to help Canadians “Live their Dream,” and we believe we can truly help this segment of the population achieve their financial and life goals as they head toward and enjoy their retirement years.”

“Our mandate is to enhance the rights and quality of life of mature Canadians, and we believe that Investment Planning Counsel’s corporate philosophy of helping Canadians live their dream, plus their solid financial planning expertise, makes them a great fit for our members,” added CARP president Lillian Morgenthau.

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Caldwell cuts ties with sub-advisor

(April 12, 2006) Caldwell Mutual Funds has severed its relationship with Strategy Asset Managers, which had been providing investment advice on the Caldwell Balanced Fund and Caldwell America Fund.

No reasons were given for the decision, but Caldwell says it will assume full responsibility for managing the portfolios of the two funds.

The Caldwell Balanced Fund was up 5.7% as of February 28, after gaining 13% last year, according to Morningstar Canada, while the Caldwell America Fund was down 1.3% at the end of February after gaining 2% in 2005.

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New tax credits for diabetics

(April 11, 2006) The Canadian Diabetes Association has issued a guide to federal and provincial tax credits, and has strongly encouraged parents of young children with diabetes to apply for the new Disability Tax Credit, worth $6,596.

The guide highlights four federal or provincial credits that diabetics could be eligible for, including the Disability Tax Credit, the Medical Expenses Tax Credit, the Refundable Medical Expense Supplement and the Child Disability Benefit.

“A number of tax changes were made in the 2005 federal budget which most people are not aware of,” says Dr. Karen Philip, national director, government relations and public policy at the Canadian Diabetes Association. “We developed this guide because we’ve received a lot of calls from people with diabetes trying to understand the ins and outs of the various medical and disability tax credits that they may be eligible for.”

Among them, the Disability Tax credit is intended to compensate Canadians for time taken from daily activities to administer “life-sustaining” therapy. Under this definition, insulin is considered a life-sustaining therapy. To qualify, a doctor must certify that insulin therapy takes a minimum of 14 hours per week to manage. Although most adults would not be able to meet that criteria, parents of insulin dependent children under the age of 15 can claim the credit on behalf of the child, since time spent by both parent and child counts toward the 14-hour per week criterion. Some provinces also offer a matching disability credit once the client is eligible for the federal credit.

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ONE Financial launches new series of notes

(April 11, 2006) ONE Financial announced it is launching a second series of its Profit Lock-In and Profit Lock-In & Cashflow Notes. The notes allow investors to switch between the five different classes and guarantees 100% of the principal investment plus 100% of any profit, locked in on a daily basis.

The notes are composed of three elements, including the underlying investments to which returns are linked, additional exposure to the underlying investments using borrowed assets, and a guarantee bond, issued by BNP Paribas. Assets invested in the notes are initially invested in the note’s underlying investments, then moved or allocated between the three components on a daily basis, depending on the performance of the underlying investments. If the investments are performing well, the notes automatically borrow additional money to invest. If the underlying investments turn negative, the notes automatically de-leverage to reduce potential markets in declining markets.

The company says in the worst case scenario, the notes’ assets become fully invested in the guarantee bond to guarantee any locked in profits at maturity.

The Profit Lock-In & Cashflow Notes, including the Leaders Class-branded Income Trust, Canadian Dividend and Global Dividend notes, pay distributions as a return of capital on a quarterly basis. The income trust notes invest in 18 TSX-listed income trusts and five high dividend yielding stocks listed on the TSX 60 Index, while the Canadian dividend notes invest in 10 of the highest dividend yielding stocks on the TSX 60 and six TSX listed income trusts. The global dividend note invests in 12 of the highest dividend yielding stocks listed on the Dow Jones Global Titans 50 Index.

The Profit Lock-In gold note invests 100% in gold bullion, while the G7 Global Index Class notes invest in seven world indices, including the S&P 500, Nikkei, European markets, the FTSE 100 Index and the S&P/TSX 60 Index. All notes in the series are 100% RSP eligible, maturing in 8.75 years. Minimum investment is $2,000.

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Online banking security a concern for Canadians: TD

(April 11, 2006) How Canadians perceive the online safety and security provided by their financial institutions is a key driver influencing their decision to use Internet banking, according to a survey. TD Canada Trust found that concern about safety and security was the top reason consumers avoided online banking.

The survey also found good awareness of general internet security terms like spam and spy ware, but terms like phishing and website spoofing were recognized by less than 30% of online banking users and less than 20% of non-users. Approximately one in ten customers reported receiving a phishing email targeting TD in the past 12 months. Nearly one-third reported the e-mail to the bank.

One in five customers reported a change in their online behaviour, thanks to online security threats. While the vast majority of these changes involved installing security software or a firewall to better protect against threats, 82% believe that their bank should be primarily responsible for security measures with respect to online banking.

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Hedge fund index makes gains in March

(April 11, 2006) The U.S. based Barclay Hedge Fund Index gained nearly 2% in March. Sol Waksman, founder and president of the Barclay Group says “despite recent prognostications of the demise of hedge funds, 2006 has gotten off to the best start since Q1 of 2000 when the Barclay Hedge Fund Index gained 9.65%.”

The group’s Emerging Markets Index continued its strong performance, gaining 9.99% in the first quarter, making it the strongest performing hedge fund sector measured by Barclay’s. The Emerging Markets Index gained 22.15% in 2005.

Overall 17 of Barclay’s 18 hedge fund indexes showed gains in March. Only Equity Short Bias lost ground, dropping 1.79% during the month.

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Penson offers ICPM service

(April 10, 2006) Penson Financial Services Canada has announced the launch of a business unit specifically designed to provide trading, custody and account administration services to investment counsel portfolio managers.

PensonPrime Custody & Trading Services offers clients trade execution, custody and settlement, and offers to carry out much of the administrative work normally done by investment counselors.

“More and more, we see new investment counsel firms being set up by independent minded entrepreneurs, with years of experience in managing high net worth clients,” says John Skain, senior vice president, Penson Financial Services Canada. “PensonPrime’s model complements these firms by understanding the needs & challenges of a new firm starting out and providing all the support necessary.”

PensonPrime also offers account protection, business continuity plans and customizable reports for to help manage client portfolios.

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Crocus investors must wait, judge says

(April 10, 2006) The judge presiding over the receivership of Crocus Investment Fund has told investors they will have to wait in line with the fund’s creditors before receiving any cash.

The receiver of the fund had sought to distribute $14.2 million to investors, on a $1 per share basis. Justice Deborah McCawley said that while Crocus was not technically insolvent, the fund’s “known contingent liabilities far exceed the assets.” The judge has not ruled out a future interim payment to shareholders.

Investors in the venture fund have threatened a $200 million class action suit. Meanwhile GorwthWorks Canada Fund has offered to takeover Crocus, and almost 34,000 Crocus investors have petitioned to have the offer heard at a public meeting with the receiver.

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Ontario calls for end to fiscal imbalance

(April 10, 2006) Ontario’s Minister of Intergovernmental Affairs is calling on Ottawa to correct the fiscal imbalance between what Ontarians pay in federal taxes and the value they receive.

“It’s time to restore the balance,” said Dr. Marie Bountrogianni. “It’s clear that the federal government has more revenue than it needs to fulfill its responsibilities and all provinces and municipalities need a greater share.”

Speaking to the Eastern Ottawa Chamber of Commerce, Bountrogianni says that outside of equalization payments, which attempt to level the playing field between “have” and “have-not” provinces, federal transfers should be delivered on a per capita basis.

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RBC drops third party fund sales charges

(April 10, 2006) The fund distribution unit of RBC has announced it will eliminate sales charges on third party funds sold through its retail branch network, effective immediately.

“The elimination of all sales charges on third-party funds benefits our clients by providing greater flexibility and choice from a complete range of investment solutions,” said Anne Lockie, president and chief executive officer of Royal Mutual Funds Inc. “We believe this change is an important one and reaffirms our commitment to our investment clients.”

RBC branches currently provide access to “virtually every” major fund family in Canada, the bank said in a press release. staff


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