By Staff | June 12, 2007 | Last updated on June 12, 2007
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(June 12, 2007) It’s now official. The Investment Industry Association of Canada has thrown its support behind having one national securities regulator.

“Without a common regulator, we have no national objectives and no national strategy to attract capital to Canada. We currently have a national market yet operate under provincial and territorial regulation, which puts us at a unique disadvantage to compete internationally,” outgoing IIAC chair Bill Hatanaka told attendees of the IIAC conference in La Malbaie, Quebec, on Tuesday.

Hatanaka says a common regulator would provide greater flexibility and efficiency within Canada to respond to changes in the global marketplace. He adds that while the Canadian Securities Administrators has tried to increase national coordination of its members, its multi-regulator model is not efficient enough to do this.

“The CSA is not a viable system for a single national regulator. It is unrealistic to expect that the operation of multiple regulators within the CSA can match the efficiency that a common securities regulator would provide,” Hatanaka says.

Ian Russell, president of the IIAC, concurs. “Complex and overwhelming might be better ways to describe the regulatory labyrinth our member companies must navigate,” Russell explains. “The way ahead for us lies in simplifying our regulatory environment. If we can streamline everything we do — our rules, approach, compliance and cost structure — we will not only create new levels of efficiencies but, in doing so, will improve the regulatory process and drive down costs.”

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IDA fines Octagon Capital $50,000

(June 12, 2007) A hearing panel of the Investment Dealers Association of Canada has levied a $50,000 fine on Octagon Capital Corporation for its poor due diligence in stopping an RRSP stripping scheme.

In its decision of April 3, 2007, the hearing panel found that between July 2002 and June 2003, Octagon facilitated the distribution of two issues of Bright Star Venture debentures by way of private placement to 97 client accounts that were opened by employee Barry (Sai-Kwong) Leung.

The accounts ended up being part of an RRSP stripping scheme. Holdings of the clients’ locked-in retirement savings plans were liquidated and reinvested into Bright Star Venture debentures.

The IDA panel found that Octagon facilitated the distribution without ensuring either that the debentures had been approved for distribution through a prospectus having been issued or that the clients were qualified to invest in the debentures.

The IDA highlighted that there was no evidence that Octagon knew that this distribution was part of an RRSP stripping scheme until May 2003. Once the company discovered the scheme, it took steps to steps to cease the activity in June.

Back in 2005, Leung, who is no longer with Octagon, was fined $100,000 by the IDA for his role in the scheme.

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Claymore launches mining index ETF

(June 12, 2007) The Claymore S&P/TSX Global Mining ETF will begin trading Tuesday on the TSX. The Global Mining ETF will seek investment results that correspond to the performance of the S&P/TSX Global Mining Index.

Claymore says the index is currently composed of 107 stocks selected from the global mining industry and divided into five sub-industries: aluminum, diversified metals & mining, gold, precious metals & minerals, and coal & consumable fuels.

“We believe this ETF fills a void in the market for a pure play ETF on the global mining industry,” says Som Seif, president of Claymore Investments. “Investors now have a product that invests in securities of mining companies that may have exposure to nickel, copper, gold and other core metals, but also covers consumable fuels such as uranium, which currently is an orphaned sub-sector and not covered by other indexes.”

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Franklin Templeton merges four funds into one

(June 12, 2007) Franklin Templeton Investments has proposed to combine four of its health- and biotech-focused funds into one corporate class fund.

The Franklin Templeton World Health Sciences and Biotech Fund, Franklin World Health Sciences, Biotech Corporate Class and Franklin Technology Corporate Class will merge into the Franklin Flex Cap Growth Corporate Class.

Franklin Templeton says the merger of the four funds will help to minimize duplication within the funds, as well as reduce expenses by spreading operational costs across larger portfolios.

The proposed merger will be voted on at a special meeting of security holders on August 17, 2007, in Toronto. If approved, it will take effect on or around August 24, 2007.

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AIC launches income fund

(June 12, 2007) AIC Limited has launched the AIC Canadian Income Choice Fund, which will attempt to offer investors a choice of income stream and flexibility in how that income stream is taxed.

“As more and more Canadians work with their financial advisors to select funds that pay a distribution, AIC wanted to provide these investors with a unique alternative — one that combines an income stream choice with a tax choice tailored to each investor’s unique needs,” says Jonathan Wellum, CEO of AIC.

AIC says the Canadian Income Choice Fund is available in three classes of shares: Capital Growth Shares, Capital Gains Shares and Canadian Dividend Shares.

It will be managed by AIC’s portfolio management team and will invest primarily in publicly traded common and preferred shares of Canadian corporations, as well as fixed income securities of governments and Canadian companies.

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(06/12/07) staff


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