James Langton of Investment Executive reports:
A lack of regulatory enforcement action against exempt-market dealers (EMDs) and the absence of comprehensive data on the exempt market, highlights the possible need for a self-regulatory organization (SRO) to cover EMDs, suggests a new paper from the University of Calgary’s School of Public Policy.
The paper, which was written by University of Toronto law professor Jeff McIntosh, examines the exempt-market regime in Canada and finds that there’s likely a significant gap in investor protection in the exempt market.
…
Currently, there are relatively few enforcement cases against EMDs, which are regulated directly by the provincial securities commissions, the paper notes, pointing to the lack of an SRO as one possible reason for a lack of enforcement activity involving EMDs.
…
“The absence of an SRO for EMDs, coupled with the lack of cases disciplining EMDs, suggests that this might constitute a lacuna in the enforcement apparatus,” the paper concludes. “Securities regulators should give serious consideration to requiring the creation of an SRO for EMDs.”
I’ve had a quick look at the paper, which is titled ENFORCEMENT ISSUES ASSOCIATED WITH PROSPECTUS EXEMPTIONS IN CANADA. It appears to be typical of reports issued by the legal / regulatory complex: there is no evidence – none whatsoever! – presented to indicate there is any actual problem. The only thing that seems to bother the author is that:
- Something is happening without there being lots and lots of lovely little pieces of paper to file, and
- Not enough jobs are being created for legal / regulatory types
Hymas Investment Management is an EMD – I need to have that registration in order to sell units in Malachite Aggressive Preferred Fund. That’s all I use it for – selling units in a fund that trades exchange-listed, prospectused preferred shares. All it does is package my own expertise. I have no interest in doing anything else with the registration. Mining exploration? Not interested. Oil & Gas? Not interested. Software development? Not interested. And yet I’m lumped together with all the firms that do that kind of stuff, which means I have to answer a lot of extra questions every year and (it seems certain, though impossible to prove) have a higher chance of being subjected to a risk-based compliance audit every few years.
If the regulators want to improve something, they should think about improving that. However, as the purpose of regulation is to create jobs for regulators and improve their chances of being hired by a bank, I’m not holding my breath.
Carnage in the market today!
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -3.0876 % | 2,350.9 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -3.0876 % | 4,313.7 |
| Floater | 3.68 % | 3.72 % | 121,052 | 17.99 | 3 | -3.0876 % | 2,486.0 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2426 % | 3,057.5 |
| SplitShare | 4.71 % | 4.39 % | 55,958 | 1.36 | 5 | -0.2426 % | 3,651.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2426 % | 2,848.9 |
| Perpetual-Premium | 5.42 % | 4.77 % | 65,413 | 6.12 | 17 | -0.2369 % | 2,773.9 |
| Perpetual-Discount | 5.35 % | 5.35 % | 72,051 | 14.83 | 20 | -0.3441 % | 2,908.1 |
| FixedReset | 4.40 % | 4.48 % | 160,032 | 6.32 | 98 | -1.1610 % | 2,366.2 |
| Deemed-Retractible | 5.08 % | 5.54 % | 113,336 | 6.08 | 30 | -0.3916 % | 2,853.8 |
| FloatingReset | 2.64 % | 3.14 % | 42,168 | 4.23 | 9 | -0.9587 % | 2,606.3 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| TRP.PR.G | FixedReset | -6.64 % | Clearly a bogus quote (22.50-23.89), since the low for the day was 23.70 timestamped 3:59. I have not checked whether this lamentable state of affairs is due to inadequate Toronto Stock Exchange reporting or inadequate Toronto Stock Exchange supervision of market-makers.
YTW SCENARIO |
| HSE.PR.C | FixedReset | -6.07 % | Clearly a bogus quote (21.98-23.21), since the low for the day was 23.25 timestamped 2:43 with some odd-lots at that price in the last half hour. I have not checked whether this lamentable state of affairs is due to inadequate Toronto Stock Exchange reporting or inadequate Toronto Stock Exchange supervision of market-makers.
YTW SCENARIO |
| TRP.PR.F | FloatingReset | -4.33 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 19.21 Evaluated at bid price : 19.21 Bid-YTW : 3.44 % |
| BAM.PR.C | Floater | -3.43 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 14.06 Evaluated at bid price : 14.06 Bid-YTW : 3.70 % |
| BAM.PR.B | Floater | -2.98 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 14.00 Evaluated at bid price : 14.00 Bid-YTW : 3.72 % |
| TRP.PR.A | FixedReset | -2.97 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 4.51 % |
| BAM.PF.A | FixedReset | -2.88 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.79 Evaluated at bid price : 23.30 Bid-YTW : 4.81 % |
| BAM.PR.K | Floater | -2.85 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 14.00 Evaluated at bid price : 14.00 Bid-YTW : 3.72 % |
| BAM.PF.B | FixedReset | -2.74 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.82 Evaluated at bid price : 22.33 Bid-YTW : 4.71 % |
| TRP.PR.H | FloatingReset | -2.72 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 15.03 Evaluated at bid price : 15.03 Bid-YTW : 3.32 % |
| SLF.PR.G | FixedReset | -2.56 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 17.10 Bid-YTW : 8.54 % |
| TRP.PR.C | FixedReset | -2.56 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 16.36 Evaluated at bid price : 16.36 Bid-YTW : 4.52 % |
| GWO.PR.N | FixedReset | -2.55 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.81 Bid-YTW : 8.58 % |
| HSE.PR.E | FixedReset | -2.53 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.79 Evaluated at bid price : 23.52 Bid-YTW : 5.36 % |
| HSE.PR.G | FixedReset | -2.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.82 Evaluated at bid price : 23.65 Bid-YTW : 5.30 % |
| BAM.PF.E | FixedReset | -2.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.93 Evaluated at bid price : 22.19 Bid-YTW : 4.72 % |
| TRP.PR.E | FixedReset | -2.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.68 Evaluated at bid price : 22.12 Bid-YTW : 4.45 % |
| CM.PR.P | FixedReset | -2.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.35 Evaluated at bid price : 21.35 Bid-YTW : 4.46 % |
| TD.PF.A | FixedReset | -2.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.42 Evaluated at bid price : 21.42 Bid-YTW : 4.47 % |
| MFC.PR.B | Deemed-Retractible | -2.18 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.01 Bid-YTW : 6.88 % |
| CM.PR.O | FixedReset | -2.16 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.38 Evaluated at bid price : 21.70 Bid-YTW : 4.47 % |
| RY.PR.H | FixedReset | -2.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.51 Evaluated at bid price : 21.51 Bid-YTW : 4.45 % |
| TRP.PR.B | FixedReset | -2.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 15.26 Evaluated at bid price : 15.26 Bid-YTW : 4.52 % |
| BAM.PF.H | FixedReset | -2.06 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2020-12-31 Maturity Price : 25.00 Evaluated at bid price : 25.62 Bid-YTW : 4.41 % |
| PWF.PR.T | FixedReset | -2.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.74 Evaluated at bid price : 23.17 Bid-YTW : 4.25 % |
| BAM.PR.Z | FixedReset | -1.92 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.55 Evaluated at bid price : 23.55 Bid-YTW : 4.79 % |
| TRP.PR.D | FixedReset | -1.84 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.49 Evaluated at bid price : 21.85 Bid-YTW : 4.51 % |
| BAM.PF.G | FixedReset | -1.84 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.72 Evaluated at bid price : 23.47 Bid-YTW : 4.71 % |
| SLF.PR.H | FixedReset | -1.84 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.32 Bid-YTW : 6.48 % |
| MFC.PR.G | FixedReset | -1.83 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.61 Bid-YTW : 5.13 % |
| BMO.PR.T | FixedReset | -1.83 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.50 Evaluated at bid price : 21.50 Bid-YTW : 4.43 % |
| BMO.PR.S | FixedReset | -1.79 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.60 Evaluated at bid price : 22.00 Bid-YTW : 4.40 % |
| PWF.PR.P | FixedReset | -1.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 16.80 Evaluated at bid price : 16.80 Bid-YTW : 4.49 % |
| MFC.PR.K | FixedReset | -1.72 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.15 Bid-YTW : 6.53 % |
| BAM.PR.X | FixedReset | -1.72 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 17.16 Evaluated at bid price : 17.16 Bid-YTW : 4.70 % |
| BAM.PF.F | FixedReset | -1.69 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.98 Evaluated at bid price : 23.30 Bid-YTW : 4.78 % |
| MFC.PR.M | FixedReset | -1.65 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.99 Bid-YTW : 6.05 % |
| TD.PF.B | FixedReset | -1.65 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.44 Evaluated at bid price : 21.44 Bid-YTW : 4.48 % |
| IFC.PR.A | FixedReset | -1.62 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 19.41 Bid-YTW : 7.40 % |
| SLF.PR.B | Deemed-Retractible | -1.60 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.77 Bid-YTW : 6.45 % |
| SLF.PR.D | Deemed-Retractible | -1.59 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.05 Bid-YTW : 7.36 % |
| BMO.PR.W | FixedReset | -1.57 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.30 Evaluated at bid price : 21.30 Bid-YTW : 4.44 % |
| TD.PF.F | Perpetual-Premium | -1.50 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 24.49 Evaluated at bid price : 24.91 Bid-YTW : 4.93 % |
| VNR.PR.A | FixedReset | -1.46 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.58 Evaluated at bid price : 21.58 Bid-YTW : 5.11 % |
| MFC.PR.H | FixedReset | -1.46 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.29 Bid-YTW : 5.28 % |
| CM.PR.Q | FixedReset | -1.39 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.65 Evaluated at bid price : 23.35 Bid-YTW : 4.50 % |
| TD.PF.C | FixedReset | -1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.46 Evaluated at bid price : 21.46 Bid-YTW : 4.45 % |
| BMO.PR.Y | FixedReset | -1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.55 Evaluated at bid price : 23.20 Bid-YTW : 4.48 % |
| BIP.PR.C | FixedReset | -1.36 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-09-30 Maturity Price : 25.00 Evaluated at bid price : 25.40 Bid-YTW : 5.11 % |
| TD.PF.D | FixedReset | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.68 Evaluated at bid price : 23.41 Bid-YTW : 4.49 % |
| MFC.PR.N | FixedReset | -1.35 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.00 Bid-YTW : 5.96 % |
| EIT.PR.A | SplitShare | -1.32 % | YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2024-03-14 Maturity Price : 25.00 Evaluated at bid price : 25.41 Bid-YTW : 4.67 % |
| TRP.PR.K | FixedReset | -1.32 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-05-31 Maturity Price : 25.00 Evaluated at bid price : 25.45 Bid-YTW : 4.44 % |
| TD.PF.E | FixedReset | -1.30 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.75 Evaluated at bid price : 23.61 Bid-YTW : 4.52 % |
| BAM.PR.R | FixedReset | -1.25 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 19.75 Evaluated at bid price : 19.75 Bid-YTW : 4.71 % |
| BAM.PR.N | Perpetual-Discount | -1.20 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.35 Evaluated at bid price : 21.35 Bid-YTW : 5.64 % |
| RY.PR.J | FixedReset | -1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.63 Evaluated at bid price : 23.27 Bid-YTW : 4.47 % |
| CU.PR.C | FixedReset | -1.15 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.45 Evaluated at bid price : 21.45 Bid-YTW : 4.61 % |
| RY.PR.Z | FixedReset | -1.14 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.35 Evaluated at bid price : 21.65 Bid-YTW : 4.36 % |
| NA.PR.W | FixedReset | -1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 21.21 Evaluated at bid price : 21.21 Bid-YTW : 4.52 % |
| BIP.PR.A | FixedReset | -1.09 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 22.79 Evaluated at bid price : 23.59 Bid-YTW : 5.33 % |
| BAM.PR.T | FixedReset | -1.07 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-10 Maturity Price : 20.42 Evaluated at bid price : 20.42 Bid-YTW : 4.66 % |
| MFC.PR.J | FixedReset | -1.06 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.35 Bid-YTW : 5.35 % |
| GWO.PR.Q | Deemed-Retractible | -1.02 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.31 Bid-YTW : 5.74 % |
| MFC.PR.C | Deemed-Retractible | -1.01 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.50 Bid-YTW : 7.09 % |
| SLF.PR.A | Deemed-Retractible | -1.00 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.66 Bid-YTW : 6.48 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| CM.PR.R | FixedReset | 467,037 | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-07-31 Maturity Price : 25.00 Evaluated at bid price : 24.99 Bid-YTW : 4.63 % |
| TD.PR.Z | FloatingReset | 102,500 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.41 Bid-YTW : 2.84 % |
| TD.PF.H | FixedReset | 85,595 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-10-31 Maturity Price : 25.00 Evaluated at bid price : 26.11 Bid-YTW : 3.76 % |
| BMO.PR.R | FloatingReset | 56,100 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.25 Bid-YTW : 2.96 % |
| BNS.PR.P | FixedReset | 53,950 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.86 Bid-YTW : 3.75 % |
| MFC.PR.F | FixedReset | 44,221 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.88 Bid-YTW : 8.57 % |
| There were 33 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| TRP.PR.G | FixedReset | Quote: 22.50 – 23.89 Spot Rate : 1.3900 Average : 0.7929 YTW SCENARIO |
| HSE.PR.C | FixedReset | Quote: 21.98 – 23.21 Spot Rate : 1.2300 Average : 0.7005 YTW SCENARIO |
| IFC.PR.A | FixedReset | Quote: 19.41 – 20.19 Spot Rate : 0.7800 Average : 0.5288 YTW SCENARIO |
| BAM.PF.A | FixedReset | Quote: 23.30 – 23.81 Spot Rate : 0.5100 Average : 0.3092 YTW SCENARIO |
| BAM.PF.H | FixedReset | Quote: 25.62 – 26.15 Spot Rate : 0.5300 Average : 0.3320 YTW SCENARIO |
| HSE.PR.G | FixedReset | Quote: 23.65 – 24.11 Spot Rate : 0.4600 Average : 0.2763 YTW SCENARIO |