Tag Archives: Letter from the President

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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China’s Economic Turmoil Sends Ripples to Global Markets (IIAC Blog)

China’s Economic Turmoil Sends Ripples to Global Markets (IIAC Blog)

At the invitation of the Hong Kong Trade Development Council (HKTDC), I led the Canadian delegation of 80 professionals to the 2016 Asian Financial Forum (AFF) in Hong Kong in January. The Forum attracted more than 2,600 participants from 39 countries and regions.

Not surprising, much of the conversation centred on China. The country’s challenges have been debated for years, but in recent months have been thrust into the international spotlight. There are increasing worries that Chinese authorities, in their attempt to implement difficult reforms while preserving demand and financial stability, may set off a chain … Continue reading

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Pulling Out the Stops to Rescue the TSX Venture Exchange (IIAC Blog)

Pulling Out the Stops to Rescue the TSX Venture Exchange (IIAC Blog)

The singular event that has drawn considerable attention to the investment industry during the past year has been the steady withdrawal of boutique dealers from IIROC registration through mergers and amalgamations, the shuttering of operations or a shift to lighter registration, notably Exempt Dealer status.

The plight of the small dealer boutique firm has coincided with the collapse of the public venture market, the TSX Venture Exchange (TSXV).

In my latest Letter from the President, I discuss the issues facing small dealer boutique firms, the factors contributing to the decline in the TSXV, and the steps … Continue reading

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Enhancing Corporate Bond Transparency (IIAC Blog)

Enhancing Corporate Bond Transparency (IIAC Blog)

In September 2015, the Canadian Securities Administrators (CSA) released its long-awaited proposals to enhance corporate bond transparency. In my December 2015 Letter from the President, I discuss the existing CanPX transparency system and the flaws in the IIROC Market Trade Reporting System which was introduced on November 1, 2015, before sharing my thoughts on the optimal transparency approach.

Highlights:

*In striking a new direction for corporate bond transparency, the CSA needs to ensure it understands the full implications of its proposed model, and be convinced that the new approach reaches a better public interest objective.

*The … Continue reading

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The Six Elements of an Effective Cybersecurity Plan (IIAC Blog)

The Six Elements of an Effective Cybersecurity Plan (IIAC Blog)

On November 9, 2015, I had the pleasure of speaking at the Knowledge Bureau’s Distinguished Advisor Conference. The audience included both IIROC- and MFDA-registered advisors.

The topic of my presentation was Cybersecurity in the Financial Industry. I described the sophistication and global dimensions of the cyber threat and the serious consequences of such an attack to firms and clients. The presentation also gave me an opportunity to explain the IIAC’s role in raising awareness and assisting dealer Member firms to put in place defenses to counter the cyber threat.

In the November issue of the IIAC … Continue reading

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What’s Going on in Global Reform? (IIAC Blog)

What’s Going on in Global Reform? (IIAC Blog)

In late September I attended the IOSCO Stakeholders’ Meeting. The international organization is at an important crossroad—it continues to reinforce its role as the key global reference point for securities regulation, while grappling with new and emerging opportunities and risks, including those posed by digitization. It announced last week that Paul Andrews (a 17-year veteran of FINRA) will become the new Secretary General of the IOSCO.

IOSCO recognizes culture as a key ingredient to improved market conduct, and will continue to encourage the global industry to adopt core principles consistent with good culture. The impetus of … Continue reading

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What’s in Store for Canada’s Investment Industry (IIAC Blog)

What’s in Store for Canada’s Investment Industry (IIAC Blog)

Since early 2013, Canada’s investment industry has shown a promising turnaround in fortunes. Revenue and profit improved decisively in 2014 (up 15% and 29%, respectively, year-over-year), and were well above the 2006-07 bull market averages. However, first half 2015 results dashed hopes for a sustained earnings breakout – revenue was up 3% year-over-year, but operating profits were down 5% in H1 2015.

If business conditions in the second half of 2015 stay roughly in line with the first half, the IIAC forecasts the following for 2015 as whole:

* Operating revenue and profit at the integrated firms are expected to increase 6% and … Continue reading

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Letter from the President: Tackling Systemic Risks (IIAC Blog)

Letter from the President: Tackling Systemic Risks (IIAC Blog)

The reforms introduced to the global banking system in recent years have been credited with sharply reducing systemic risk in the financial sector. The banking system is now better able to handle external shocks, but the question remains: Has overall systemic risk in the financial system been extinguished, or is it lurking in the shadows?  

International regulators seem to think it is lurking, but are not sure where. While they have apparently concluded that the large non-bank non-insurer financial institutions (i.e. asset managers) are not systemically important, these institutions can pose substantial liquidity and instability risks to capital markets, if … Continue reading

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Letter from the President: Global Credit Markets at a Crossroads (IIAC Blog)

Letter from the President: Global Credit Markets at a Crossroads (IIAC Blog)

On June 4-5, 2015, I participated in the International Capital Market Association (ICMA) Annual General Meeting and Conference in Amsterdam—perhaps the foremost venue to understand the leading edge trends in global and European credit markets and the direction of regulatory reform. The bond market liquidity drought dominated the conversations. Finding buyers in the market when investors look to sell has gotten more difficult, resulting in greater day-to-day volatility and wider bid-ask spreads. Even the U.S. Treasury bond market—one of the most liquid markets in the world—is not immune to turbulence. 

There are a number of factors behind this liquidity crunch, … Continue reading

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