Financial services professionals across Canada are providing their input on proposals to revamp the current structure for the investment industry’s self-regulatory organizations (SROs) and hoping for a new single entity to oversee the broader industry. They expect a single SRO to reduce red tape, lower operating costs and create a more seamless experience for investors.
The Canadian Securities Administrators (CSA), the umbrella organization of Canada’s provincial and territorial securities commissions, is in the midst of a long-awaited review of the regulatory framework for the SROs. That includes the Investment Industry Regulatory Organization of Canada (IIROC), which oversees all investment dealers and their trading activity in Canada’s debt and equity markets, and the Mutual Fund Dealers Association of Canada (MFDA), the national SRO for the distribution side of the Canadian mutual fund industry. The result of the review is expected to be a single SRO, but what it could look like is still unknown.
In February, the MFDA proposed a new SRO that would have responsibility for mutual fund dealers, investment dealers, portfolio managers, exempt-market dealers and scholarship-plan dealers. Meanwhile, IIROC representatives have been speaking with members of the industry about their vision for a combined entity.
The CSA says it plans to publish a consultation paper in the coming months on the pros and cons of the current SRO structure and the impact of an overhaul.
Financial services professionals say the current system is cumbersome and costly to administer. Many argue a single entity would better reflect the changing industry, including digitalization and the onslaught of new products and services alongside the shift to a more holistic wealth planning process. To better compete in this changing industry, many firms are looking to offer various products under one roof and say a single SRO would make the process more accessible and manageable.
“If we are going to enhance the customer experience, having a unified SRO that serves the entire investment industry is going to help the industry move into a digital age, which customers really want,” says Rick Annaert, head of advisory services at Manulife Financial Corp. and president and chief executive officer at Manulife Securities Inc.
Manulife has three sets of governance to work through currently, given that its businesses are overseen by IIROC, the MFDA and the Ontario Securities Commission for its investment-counsellor portfolio manager business, Manulife Private Wealth, Mr. Annaert says.
“We’re looking for one set of regulations that reflects the best practices [of all three business models],” he says. “Whatever we do has to protect those small boutique dealer business models, so there’s an economically viable way for people to get advice in small markets in Canada.”
While some believe a merger of IIROC and MFDA is the best route, Mr. Annaert prefers a model rebuilt from the ground up.
“That way, you aren’t trying to merge existing entities with existing biases and existing models. If you’re going to do something broad and bold, start from scratch,” he says. “That’s how you get one set of rules, one set of practices … and look at getting best practices across the board.”
While that might take longer than a merger of the existing SROs, “I’d be willing to wait,” Mr. Annaert says.
Reggie Alvares, executive vice president at Investment Planning Counsel Inc. in Toronto, the parent company of mutual-fund dealer IPC Investment Corp. and investment dealer IPC Securities Corp., is hoping for a new single SRO that’s more efficient than the dual SRO system in place today.
“If we can get synergy and some regulatory burden lessened without compromising investor security, it will help … bring more efficiency,” he says.
And while the process shouldn’t be rushed, Mr. Alvares believes a new structure needs to be developed sooner rather than later.
“Something has to change. Everything around us is changing,” he says, citing examples such as the rise of robo-advisors and artificial intelligence, which are both changing the investment process. “We need to come to the times to say, ‘What’s the new governance around this?’”
Mark Kent, president and CEO at Portfolio Strategies Corp., a Calgary-based mutual-fund and exempt-market dealer, believes a single SRO “makes a lot of sense,” to save the industry costs and avoid the time and resources required when having to deal with two different regulators on the same set of business.
He also hopes a single entity will result in a stronger and broader understanding of the different investment products being regulated by that entity.
Mr. Kent says he has met with representatives at both IIROC and the MFDA and believes some combination of the two should create “the best of the best” for industry oversight and regulation.
Matthew Latimer, executive director of the Federation of Mutual Fund Dealers, an association that lobbies on behalf of mutual-fund dealers, says many of his members are on board with some combination of the SROs, especially if it means lower fees and less overhead, which can also lower administration costs in the process.
They also want to see a change happen sooner rather than later, even if it means tweaking down the road if any hurdles arise, he says.
Ian Russell, president and CEO at the Investment Industry Association of Canada, also is in favour of seeing the creation of a single SRO.
Yet, he acknowledges that such an initiative will take time, effort and collaboration across the industry, including from provincial regulators.
“However you look at it, it’s a daunting challenge,” Mr. Russell says.
Major Value-Added Agriculture Investment Announced in Saskatchewan | News and Media – Government of Saskatchewan
Released on January 17, 2022
FCL To Build Canola Processing Plant And Canada’s Largest Renewable Diesel Facility In Regina
Today, Federated Co-operatives Limited (FCL) announced its plans to develop an Integrated Agriculture Complex (IAC) north of the Co-op Refinery Complex in Regina. The IAC will include a renewable diesel facility, as well as a new canola crushing plant in partnership with AGT Foods.
The FCL renewable diesel production plant alone represents a nearly $2 billion investment for the province and is expected to create more than 2,500 construction jobs and 150 permanent operating jobs. The entire IAC is estimated to have direct and indirect economic benefits of approximately $4.5 billion.
“This is a tremendous opportunity for Saskatchewan and for FCL and AGT Foods that will bolster the sustainability and economic goals of these companies and the province,” Premier Scott Moe said. “Our province has the food, fertilizer, and fuel the world needs, including renewable energy from canola grown and processed here, which speaks to the heart of our plan for economic recovery and growth as we work to build an independent, strong and sustainable Saskatchewan.”
The FCL-AGT canola crushing facility will ensure Saskatchewan exceeds its 2030 Growth Plan goal of processing 75 per cent of the canola grown in the province. It also supports the Growth Plan goal of increasing agriculture value-added revenue to $10 billion.
The FCL renewable diesel plant will have a production capacity of 15,000 barrels per day, or about 1 billion litres per year. The FCL-AGT canola crush facility will use 1.1 million tonnes of canola seed to produce 450,000 tonnes of oil, supplying approximately 50 per cent of the feedstock required for the renewable diesel plant, with the remainder of the supply being contracted from other canola crush facilities.
“We know the synergies between transportation fuel production and agriculture will play a vital role in Western Canada’s transition to the low carbon economy,” FCL CEO Scott Banda said. “We believe our Co-op Retailing System is well-positioned to integrate and capture the full agricultural value-chain in the production of fuel and value-added products. We are excited about our partnership with AGT and ultimately what this announcement means for value-added agriculture in our province.”
With facilities and outlets in 249 communities in Saskatchewan, FCL and local co-ops employ more than 10,000 workers across the province.
For more information, contact:
Trade and Export Development
Cross-border investment surged in November – Investment Executive
The cross-border activity was concentrated on debt securities, with foreign investors adding $31.4 billion worth in the month, up from $20.4 billion the previous month.
StatsCan reported that investors targeted federal debt — adding $8.6 billion in bonds and $6.5 billion worth of money market securities — along with $9.8 billion in corporate debt.
Conversely, foreign investors trimmed $1.3 billion worth of Canadian equities in the month.
“The reduction reflected retirements of Canadian portfolio shares resulting from cross-border merger and acquisition activities. Foreign purchases of Canadian shares on the secondary market, led by shares of chartered banks, moderated the overall reduction,” StatsCan said.
At the same time, Canadian investors ramped up their buying of foreign securities in November.
In total, domestic investors added $17.5 billion in foreign securities, StatsCan reported. This was up from $5.4 billion in October.
Canadian investors jumped into U.S. stocks in November, buying $7.4 billion worth of equities, up from just $652 million in October. Large-cap tech stocks and index funds were the primary targets, StatsCan said.
Additionally, investors bought $4.0 billion worth of non-U.S. foreign shares in November, reversing a $2.5-billion divestment in October.
Canadian investors also added $6.1 billion in foreign debt, including $2.8 billion in U.S. corporate bonds and $1.6 billion in U.S. government bonds.
In a research note, National Bank Financial Inc. (NBF) said November’s $17.5-billion net investment means Canadian investors acquired $144.4 billion worth of foreign securities during the first 11 months of 2021.
“In dollar terms, you won’t find a prior [year-to-date] tally remotely close,” NBF said, noting that the previous record was $73.3 billion about 15 years ago.
Even with the record flow into foreign securities, net portfolio flows are still positive for Canada, as foreign buying of Canadian securities has been even stronger.
“An improved current account means Canada is less reliant on foreign inflows,” NBF said. “Still, the apparent abandonment of Canada by domestic investors is part of an overall capital bleed that needs redressing.”
4 Must-Have TFSA Stocks for Any Investment Goal – Yahoo Canada Finance
Written by Amy Legate-Wolfe at The Motley Fool Canada
If you have a Tax-Free Savings Account (TFSA), then you hopefully have an investment goal to go along with it. Now, we could drill down into specific savings goals, but, honestly, those goals change! What someone wants at 30 will be different at 50, and so on. First, it’s student debt, then a house, then a child, their education, and, of course, retirement.
Frankly, you shouldn’t have to juggle your investments every time you come up with a new goal. In fact, one of the main points of investing is to buy and hold for as long as you can. Sure, you can take out cash as your goals come in, but you should be able to hold onto them for as long as you want.
With that in mind, here are four TFSA stocks that will help you achieve any investment goal.
If you’re going to have long-term TFSA stocks, you need stable companies to get you there. That would definitely include Fortis (TSX:FTS)(NYSE:FTS). The utility company has been growing its dividend each year for almost 50 years. This comes from a stable business plan of growth through acquisition.
Investors have been flocking to Fortis as one of the TFSA stocks they want because of this stability — especially during the market pullback. The company is basically recession proof, providing gas and electric utilities to 3.4 million customers. You need the lights on no matter what, making it a strong choice for any investor.
Fortis shares are up 16% in the last year with a dividend yield of 3.63%.
The Big Six banks may be trading at all-time highs, but there’s a reason. And that reason is why they’re TFSA stocks for any investment goal. The banks managed to get out of the market drop relatively unscathed, and yet they still have so much cash on hand to make up for lost time. And that comes through solid dividend jumps.
But Toronto-Dominion Bank (TSX:TD)(NYSE:TD) has even more to offer. TD stock offers the most growth of the Big Six banks, with the most amount of credit card partnerships, growing online and United States presence, and the most loan options for solid revenue streams. And yet even after all this growth, TD stock still trades at just 13.42 times earnings.
TD stock is up 41% in the last year, with a dividend yield of 3.47%.
If you have the cash to invest, Constellation Software (TSX:CSU) is one of the few tech stocks that remains a stable investment. The company has been an acquisition powerhouse, identifying the software companies it believes will thrive with incredible expertise.
It’s those experts that have managed to keep the company growing at a stable clip, even as other tech stocks burn around it. Constellation shares have been steady as a rail, growing through venture funds and seeing revenue rise 30% year over year during the last quarter. It’s one of the TFSA stocks any investor should add as soon as possible before it rises even more.
Shares of Constellation are up 34% in the last year, and it recently boosted its dividend to offer a yield of 0.24%.
Finally, Nutrien (TSX:NTR)(NYSE:NTR) may be on the newer side, but don’t count this out among TFSA stocks. People need to eat, and Nutrien is now the world’s largest crop nutrient provider. As arable land decreases and climate change increases, Nutrien will be a necessity for any portfolio.
Nutrien continues to grow through acquisition. In the last few years, it has increased its digital presence at an incredible rate. This kept revenue coming in at an incredibly important time — for the company and farmers. Now, it’s nearing the three-digit mark and isn’t likely to come down.
Shares of Nutrien are up 37% in the last year, with a yield of 2.57% for investors.
Should you invest $1,000 in Air Canada right now?
Before you consider Air Canada, you may want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now… and Air Canada wasn’t one of them.
The online investing service they’ve run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.
Fool contributor Amy Legate-Wolfe owns TORONTO-DOMINION BANK. The Motley Fool recommends Constellation Software, FORTIS INC, and Nutrien Ltd.
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