Monthly Archives: March 2016

IIAC 2016 Federal Budget Response (IIAC Blog)

IIAC 2016 Federal Budget Response (IIAC Blog)

The 2016 federal budget comes in the midst of a marked deceleration in economic growth and the prospect of a modest recovery over the next year. Stepped-up program spending over the next two fiscal years, averaging 6 percent annually, provides support for growth and a buffer to cushion the economic downturn through enhanced programs for the elderly and the unemployed, and for families under the new Canada Child Benefit. The federal spending trajectory, however, is mindful of keeping the debt-to-GDP in check.

The budget deficit balloons to just under $30 billion in the coming fiscal year … Continue reading

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IIAC’s Ian Russell on BNN – Factors Battering Bottom Lines of Boutique Firms (IIAC Blog)

IIAC’s Ian Russell on BNN – Factors Battering Bottom Lines of Boutique Firms (IIAC Blog)

Low commodity prices and increasing regulatory costs are resulting in layoffs and shutdowns in the investment industry. The Investment Industry Association of Canada’s President and CEO, Ian Russell, appeared on BNN to discuss the perfect storm hitting firms, the rising regulatory costs, and why there may be a light at the end of the tunnel. He was also asked what he would like to see in the March 22 federal budget. Click the icon to watch the interview. 

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2015 Boutique Earnings Battered by Poor Markets and an Escalating Regulatory Burden (IIAC Blog)

2015 Boutique Earnings Battered by Poor Markets and an Escalating Regulatory Burden (IIAC Blog)

My latest Letter from the President summarizes the recently released annual results for investment dealer firm groupings over the past year. 2015 was one of the worst years in terms of cost increases, earnings performance, layoffs and firm attrition. Retail and institutional boutique firms were hard-hit by a perfect storm of adverse cyclical and structural business conditions, the need for new technology and relentless escalating regulatory compliance costs. The pressures on business lines unleashed structural change in the industry—from firm downsizing, to mergers and acquisitions, to firm closures.

The considerable impact of the compliance burden on … Continue reading

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A ‘Win’ for the IIAC – “Early Warning” Reporting System (IIAC Blog)

A ‘Win’ for the IIAC – “Early Warning” Reporting System (IIAC Blog)

In Canada, any person that acquires a stake of 10% or more in a Canadian public company must issue a news release immediately and file an “early warning” report within two business days, including the number of shares held, the purpose of the transaction and the acquirer’s future intentions. This allows the market to review and assess the potential impact of changes in ownership or control.

The Canadian Securities Administrators (CSA) proposed to reduce the early warning reporting threshold from 10% to 5%. The IIAC pushed back, stressing the lower threshold would increase compliance costs and … Continue reading

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A ‘Win’ for the IIAC – Take-Over Bid Rules (IIAC Blog)

A ‘Win’ for the IIAC – Take-Over Bid Rules (IIAC Blog)

In Canada, a company’s board of directors cannot reject a hostile bid without first giving shareholders their say.

In March 2015, the Canadian Securities Administrators (CSA) had proposed changes to Canada’s take-over bid regime to level the playing field between bidders and target boards and to provide additional protection to the existing shareholders of the target company.

The proposed rules would have substantially extended the period during which a take-over bid must remain open, from the current minimum of 35 days to 120 days. The IIAC said the current minimum deposit period is arguably too short … Continue reading

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A ‘Win’ for the IIAC – Tax Free Savings Accounts Reporting (IIAC Blog)

A ‘Win’ for the IIAC – Tax Free Savings Accounts Reporting (IIAC Blog)

If TFSA holder personal information (i.e. last name, birthdate and SIN) on file at a registered securities dealer does not match Canada Revenue Agency (CRA)’s records, the dealer must correct the data and resubmit the amended record or, if unable, nullify the account and issue a tax slip to the client.

The final date for correcting TSFAs was February 29, 2016.

Due to the outstanding backlog of amended individual records, IIAC Member firms were not informed by the deadline whether the changes made were accepted or rejected by the CRA.

The IIAC requested and obtained a 90-day … Continue reading

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A ‘Win’ for the IIAC – Proxy Voting System and Processes (IIAC Blog)

A ‘Win’ for the IIAC – Proxy Voting System and Processes (IIAC Blog)

The IIAC participated in the Canadian Securities Administrators review of the proxy voting system and processes, including through the IIAC’s Proxy Protocol Working Group, to identify cost-effective improvements to the proxy voting infrastructure.

Draft proxy voting protocols were developed with IIAC Member input to provide guidance on the roles and responsibilities of all key participants (i.e. intermediary dealers who submit proxy votes, transfer agents who act as meeting tabulators, vendors acting as proxy agent, and Canada’s central depository for securities) in the proxy voting process, and detail the operational processes for tabulating proxy votes held through intermediary … Continue reading

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A ‘Win’ for the IIAC – CRM Suitability Assessment (IIAC Blog)

A ‘Win’ for the IIAC – CRM Suitability Assessment (IIAC Blog)

At the urging of the IIAC’s Venture Market Working Group, IIROC issued a Client Relationship Model (CRM)—Frequently Asked Questions (FAQ) Notice clarifying dealers’ suitability assessment obligations for certain clients with a high-risk tolerance. The FAQ specifically addressed speculative investing or trading, such as in TSX Venture Exchange (TSXV) listed securities. The FAQ clearly articulates the portfolio approach to suitability, and does not prohibit venture stocks in accounts/portfolios that are not high risk. The FAQ also clarifies the approach dealers must adopt to assess suitability when a client wishes to engage in speculative trading and has tolerance … Continue reading

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