Merger of Canadian investment industry regulators heads to final stages with new board - The Globe and Mail | Canada News Media
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Merger of Canadian investment industry regulators heads to final stages with new board – The Globe and Mail

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A merger between two self-regulatory organizations that oversee the country’s investment industry is heading into its final stages of approval as regulators announce the final framework and a new board of directors.

On Thursday, the Canadian Securities Administrators (CSA), an umbrella organization of Canada’s provincial and territorial securities commissions, released the names of proposed board members for the new self-regulatory organization (SRO) that will combine the functions of the Investment Industry Regulatory Organization of Canada, or IIROC, which supervises securities dealers, and the Mutual Fund Dealers Association of Canada, or MFDA, which oversees 90 mutual fund dealers.

The CSA also revealed the names of board members for a new single investor protection fund (IPF) for the industry, and released for public comment several documents outlining the structure of the new organization and fund.

“Today’s announcement of the new boards and publication of draft documents marks a major milestone toward our goal of creating a new SRO and IPF that serves a clear public interest mandate, better protects investors and promotes public confidence,” CSA Chair and CEO of the Autorité des marchés financiers Louis Morisset said in a statement.

The public comment period, which is open until June 27, is one of the final steps in consolidating IIROC and the MFDA, as well as creating one investor protection fund by combining two existing funds — the Canadian Investor Protection Fund (CIPF) and the MFDA Investor Protection Corporation. The fund will be independent from the new organization.

The two SROs have long been criticized by investor advocates and the investment industry for overlapping areas of oversight as more wealth managers serve customers who buy both mutual funds and individual securities. In 2019, the CSA began to review the “regulatory framework” that governs both the IIROC and the MFDA and, after industry consultations and several proposals, a new SRO plan was formed.

The new yet-to-be-named SRO is expected to be completed by Jan 1, 2023.

The proposed organization will have a governance structure, similar to the current governance structure of IIROC and the MFDA, and will initially include investment dealer and mutual fund dealer registration categories as well as marketplace members.

The potential to incorporate other registration categories – such as exempt market dealers and portfolio managers currently overseen directly by members of the CSA – will be considered as part of a separate phase.

The proposed framework plans to eliminate duplicative costs and minimize regulatory inefficiencies; promote access to advice for all investors; reduce investor confusion; streamline the complaint process; increase controls and improve transparency of enforcement mechanisms; and enhance market surveillance, among other measures.

The proposed board for the new SRO will consist of 14 members, with a majority of them independent directors – including new chair Tim Hodgson, a former financial services executive who presently serves as the Chair of Hydro One. The new SRO’s chief executive officer, who will be the final member of the board, is expected to be named in “coming weeks,” said the CSA in a release.

The new IPF board will also consist of 14 members – including new chair Donna Howard, current CIPF director and chair and vice-chair Dawn Russell, current MFDA IPC director and Chair. The new IPF’s chief executive officer, who would be the final member of the board, is expected to be named in the third quarter of calendar year 2022.

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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