What a great solution for the TMX / Maple deal! More rules!
The Ontario Securities Commission will impose share ownership restrictions and require an independent board of directors as conditions of its approval of the takeover of the Toronto Stock Exchange.
…
Among its proposed conditions for approving the bid, the OSC rules would prohibit any person or company from owning more than 10 per cent of the voting shares of Maple Group without OSC prior approval.The original shareholders of Maple Group are also required to certify annually to the OSC that they are not acting “jointly or in concert with any other investor” in respect to Maple’s voting shares.
The rules also require Maple’s board to have at least 50 per cent of its directors unrelated to the original Maple shareholders and unrelated to management of the company. One director must represent an independent, non-bank owned investment dealer, and the chairman of the board must be both independent and unrelated to the original Maple shareholders.
Maple’s shareholders are a group of 13 major Canadian financial institutions and pension funds.
Why would the banks bother to act in concert? Their interests are identical anyway. There is some oohing and ahhing over the cost recovery model:
Even if Maple succeeds in buying TMX and CDS, it will still be forced to continue paying rebates. What’s more, Maple will have to share some of the synergies it expects to get from the transaction with market users, according to the pricing model, which is now being made public for the first time by the OSC.
Starting on Nov. 1, a Maple-owned CDS will split any annual revenue gains on the current suite of CDS clearing services 50-50 with users. That continues indefinitely.
On top of that, the so-called “integration rebate” to market users starts at $2.75-million and rises to $4-million by 2016. The fee will be capped at that level after 2016, but it will continue in future years.
It’s supposed to reflect the cost-savings Maple extracts. But interestingly, it’s not conditional on Maple actually saving money. So CDS users get paid no matter whether Maple manages to find synergies or not.
All of this means Maple will have to really deliver on its original promise — to make money from CDS not by raising fees for existing services but by creating new services that it can charge for. Those new services won’t be subject to the revenue sharing. However, even there, regulators are not making it easy on Maple.
Buddy, what it probably means is that fees will be charged so that fixed costs for participants are higher and marginal costs are lower. This will enlarge the moat that protects the oligopoly.
I often feel like Cassandra when worrying about the risks of the Canadian financial system, so it’s nice to know that somebody shares my views:
Canada’s biggest banks likely are “too big to fail,” and therefore pose a risk to the country’s financial system, says Malcolm Knight, a former No. 2 at the Bank of Canada.
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Canada’s five biggest banks hold combined assets worth $2.8-trillion, twice the size of the country’s gross domestic product.That outsized economic weight makes them a threat to financial stability because the collapse of any of them would take a toll on hundreds of thousands of customers, on competition in financial services, and on the country’s reputation as a safe place to invest, Mr. Knight says.
Canada’s strict regulatory system makes the banks “less likely to fail,” but failure isn’t impossible, no matter how well the country weathered the financial crisis.
“Canada’s strict regulatory system”. We’re always hearing about that. The main thing is that OSFI simply sticks a little extra onto regulatory capital requirements – there’s nothing clever about that. What would be clever is is there was ever any accounting made for the costs of this – and I don’t mean picayune things like the service fees that help pay for all that capital. There’s things like mortgage spreads, the preponderance of short term mortgages, subsidies of tail risk by the CMHC, the stultifying effect of the oligopoly … there are many costs, none of which are ever examined.
I sent an eMail recently:
Sirs,
The Toronto Star recently published an article titled “Pediatricians in Canada discharging unvaccinated children” (April 25, on-line at http://www.thestar.com/living/article/1167428–pediatricians-in-canada-discharging-unvaccinated-children)
In this article it is alleged that the behaviour highlighted by the headline is indulged in by Dr. Fatima Kamalia and condoned by Dr. Hirotaka Yamashiro, who holds a position with the Ontario Medical Association. The CPSO is stated to take the position that “Doctors have the right to end a relationship with a patient when there is a ‘breakdown of trust and respect'”.
The arrogance shown by these medical personnel shows that they have confused the award of a medical diploma with ascension to divinity. Their interpretation of CPSO policies in a manner that equates the right to refuse medical treatment with a ‘breakdown of trust and respect’ is breathtaking; it makes a mockery of CPSO Policy #4-05 “Consent to Medical Treatment”.
Additionally, the attitude of these so-called professionals that they are infallible on pediatric care may well be misplaced, although the consensus is currently in their favour. As one who was born in England in June, 1961, I am keenly aware that consensus can be incorrect even with respect to something so straightforward as morning sickness; I remain grateful that my mother ignored doctor’s advice regarding remediation for the condition. I am pleased to pursue an occupation and lifestyle that, astonishingly, does not increase my risk of contracting peptic ulcer disease.
The desire of Drs. Kamalia & Yamashiro to restrict their practice to include only those individuals who show proper reverence for their pronouncements ex cathedra is understandable; if they wish to pick and choose their clientele, I suggest they make a living in a competitive environment – not in Ontario, where rationing effectively provides them with a very nice job for life on the taxpayers’ nickel.
I strongly urge the CPSO to initiate an investigation of the abuse of privilege endorsed or indulged in by these doctors, to condemn in the strongest possible manner the bizarre interpretation of the ‘breakdown in trust and respect’ guideline and to uphold the right to refuse treatment.
Sincerely,
I also see that there is an unsigned opinion piece in The Star:
While the College of Physicians and Surgeons of Ontario has no specific policy on the immunization issue, it does have one on severing ties. “In general, a physician should not end the physician-patient relationship because the patient chooses not to follow the physician’s advice,” it says. That’s the patient’s right.
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The American Academy of Pediatrics and its bioethics committee have developed guidelines on dealing with these vexing cases.“In general, pediatricians should avoid discharging patients from their practices solely because a parent refuses to immunize his or her child,” the guideline states.
“Families with doubts about immunization should still have access to good medical care, and maintaining the relationship in the face of disagreement conveys respect and at the same time allows the child access to medical care. Furthermore, a continuing relationship allows additional opportunity to discuss the issue of immunization over time.”
Veresen, proud issuer of VSN.PR.A, was confirmed at Pfd-3(high) / Stable by DBRS:
DBRS has today confirmed the Senior Unsecured Notes and the Preferred Shares of Veresen Inc. (Veresen or the Company) at BBB (high) and Pfd-3 (high), respectively, both with Stable trends. The confirmation reflects (1) relatively stable cash flow from the Company’s regulated pipeline businesses, which accounted for approximately 56% of Veresen’s 2011 cash distributions received from its subsidiaries; (2) diversification benefits from its midstream (35% of cash distributions) and power generation businesses (9% of cash distributions), supported by long-term contracts with mostly investment-grade counterparts; and (3) solid non-consolidated cash flow ratios – albeit high non-consolidated leverage – at the parent level following the closing of the $920 million acquisition of the Hythe/Steeprock complex (the Acquisition) from Encana Corporation (Encana) in February 2012, which DBRS viewed as a credit neutral event for Veresen.
It was a mixed day for the Canadian preferred share market, with PerpetualPremiums gaining 6bp, FixedResets down 6bp and DeemedRetractibles up 2bp. Volatility was non-existent. Volume was quite low.
| 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 | 0.0722 % | 2,543.2 |
| FixedFloater | 4.35 % | 3.71 % | 29,759 | 17.91 | 1 | 0.2294 % | 3,625.9 |
| Floater | 2.84 % | 2.85 % | 51,857 | 20.10 | 3 | 0.0722 % | 2,746.0 |
| OpRet | 4.75 % | 2.58 % | 52,983 | 1.12 | 5 | -0.0612 % | 2,509.2 |
| SplitShare | 5.22 % | 1.47 % | 64,595 | 0.62 | 4 | 0.4107 % | 2,705.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0612 % | 2,294.4 |
| Perpetual-Premium | 5.43 % | -2.47 % | 81,437 | 0.09 | 25 | 0.0561 % | 2,233.9 |
| Perpetual-Discount | 5.06 % | 5.03 % | 90,848 | 15.30 | 8 | 0.3194 % | 2,445.8 |
| FixedReset | 5.03 % | 2.98 % | 191,583 | 2.12 | 68 | -0.0580 % | 2,403.9 |
| Deemed-Retractible | 4.94 % | 3.34 % | 180,703 | 1.03 | 45 | 0.0217 % | 2,331.5 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| No individual gains or losses exceeding 1%! | |||
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| GWO.PR.J | FixedReset | 158,102 | RBC crossed blocks of 100,000 and 51,500, both at 26.30. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-12-31 Maturity Price : 25.00 Evaluated at bid price : 26.30 Bid-YTW : 3.11 % |
| MFC.PR.A | OpRet | 140,905 | TD crossed 34,600 at 25.80; Nesbitt crossed 99,000 at 25.80. YTW SCENARIO Maturity Type : Soft Maturity Maturity Date : 2015-12-18 Maturity Price : 25.00 Evaluated at bid price : 25.79 Bid-YTW : 3.33 % |
| BMO.PR.P | FixedReset | 102,571 | RBC crossed 49,000 at 26.50; TD crossed 48,200 at the same price. YTW SCENARIO Maturity Type : Call Maturity Date : 2015-02-25 Maturity Price : 25.00 Evaluated at bid price : 26.53 Bid-YTW : 3.01 % |
| TD.PR.E | FixedReset | 86,767 | National crossed 79,200 at 26.80. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-04-30 Maturity Price : 25.00 Evaluated at bid price : 26.61 Bid-YTW : 2.94 % |
| BNS.PR.Z | FixedReset | 65,086 | Desjardins crossed two blocks of 25,000 each, both at 25.10. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 25.06 Bid-YTW : 3.24 % |
| SLF.PR.G | FixedReset | 55,841 | Scotia crossed 25,000 at 25.00. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.95 Bid-YTW : 3.54 % |
| There were 19 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| FTS.PR.H | FixedReset | Quote: 25.85 – 26.24 Spot Rate : 0.3900 Average : 0.2590 YTW SCENARIO |
| POW.PR.A | Perpetual-Premium | Quote: 25.42 – 25.75 Spot Rate : 0.3300 Average : 0.2159 YTW SCENARIO |
| NA.PR.P | FixedReset | Quote: 26.80 – 27.10 Spot Rate : 0.3000 Average : 0.2013 YTW SCENARIO |
| TRP.PR.C | FixedReset | Quote: 25.71 – 25.95 Spot Rate : 0.2400 Average : 0.1568 YTW SCENARIO |
| BMO.PR.K | Deemed-Retractible | Quote: 26.30 – 26.48 Spot Rate : 0.1800 Average : 0.1094 YTW SCENARIO |
| BNS.PR.K | Deemed-Retractible | Quote: 25.72 – 25.99 Spot Rate : 0.2700 Average : 0.1995 YTW SCENARIO |