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INVESTMENTDEALERSASSOCIATIONOF CANADA

Representing Members’ Interests ...................................................... 1-2

Regulatory Update ...................3

Enforcement: Disciplinary Deci-sions Update ........................ 4-5

The Districts’ Report ........................................................ 6-7; 15

Continuing Education/RegistrationCategory Chart .................... 8-9

Continuing Education: Coming toCanada Update ...................... 10

CE Proposal Highlights .......... 10

There really is a Santa Claus .................................................... 11

83rd IDA Annual Conference .................................................. 12

Member Services Update ......................................................... 13

Year 2000: Preparing for theFuture ..................................... 14

MFDA Update....................... 14

Fall/Winter 1998

Representing Members’ Interests

The Investment Dealers Association is actively involved, on a regularand ongoing basis, in representing members’ concerns and intereststo governments and other organizations. Since our last issue, the IDAhas been active on a number of fronts.

MACKAY TASK FORCE REPORT

Joe Oliver, Association President and CEO, delivered the IDA’s Response

to the Report of the Task Force on the Future of the Canadian Financial

Services Sector during an invited appearance before The House of Com-

mons Standing Committee on Finance on October 16 and The Standing Sen-

ate Committee on Banking, Trade and Commerce on November 2, 1998.

The Association had begun addressing reform of the financial services sec-

tor a year ago, when it established a Special Committee to develop an indus-

try position on regulatory reform. The Special Committee conclusions and

recommendations were published in a November 1997 submission entitled

“Competing to Serve Canadians – A Securities Industry Perspective”.

The IDA’s Board of Directors reviewed the recommendations of the

MacKay Task Force on the Future of the Canadian Financial Services Sec-

tor, the most important recommendation being access for investment dealers

to the payments system, and approved an IDA response. The IDA’s latest

response takes the Special Committee’s recommendations into consideration

and includes promoting greater competition in the financial sector; no objec-

tion in principle to the merger of large institutions; and positive changes to the

accounting and tax rules for financial institutions. The position paper also

supports Task Force recommendations that regulatory inefficiencies in the

financial sector and duplication and gaps in regulation can be remedied through

greater harmonization of existing rules and the delegation of responsibilities

among the regulatory authorities. The Association cites specific proposals to

strengthen regulation of the securities-related activities of financial institutions

operating in a ‘post-four pillars’ world.

For a copy of the IDA response, please contact: Ian Russell, SeniorVice-President, Capital Markets at (416) 865-3036, or irussell@ida.ca

IDA REP RT

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IDA EXECUTIVE VISITS

The annual Executive Visits are anopportunity for the IDA to meet withmember firms, government officials,members of the business and invest-ment community, and the media. Asthe securities industry’s national self-regulator and trade association, weundertake these consultations to lis-ten to members’ views as we developand articulate association positionson economic and business issues ofconcern to the investment industry.

NewfoundlandJoseph J. Oliver, Association Presi-

dent and CEO, Ian Russell, SeniorVice-President, Capital Markets, andMorag MacGougan, Atlantic &Ontario Regional Director, visitedNewfoundland for an Executive Visiton October 21-22, hosted by TerryStack, Chair of the Newfoundland Dis-trict Council.

The agenda included a meeting withthe St. John’s Branch Managers, anda dinner with Newfoundland businessleaders. The Association met with TheHonourable Judy Foote, Minister ofIndustry, Trade and Technology; KeithHealey, Assistant Deputy Minister, In-dustry, Trade and Technology; andBeverly Carter, Assistant Deputy Min-ister, Economics and Statistics, Depart-ment of Finance. A meeting was alsoheld with Tony Patey, Director of Se-curities and Winston Morris, AssistantDeputy Minister, Commercial and Cor-porate Affairs.

Joe Oliver and Ian Russell hosted anews conference, well attended by lo-cal media, for the release of the New-foundland Fiscal and Economic Out-

look. The provincial report, preparedby IDA Capital Markets EconomistStan Kumagai and Research AssistantAllison Jones, analyzes the province’s1998/99 budget, describes recent eco-nomic performance, and examines andcomments on near-term prospects forNewfoundland’s economy.

AlbertaIDA Chair Ken Shields, Joe

Oliver, and Ian Russell visitedEdmonton and Calgary from No-vember 17th to 19th, 1998. DonMilligan, Chair of the Alberta DistrictCouncil, served as host for theEdmonton visit while Gerry Perron,Vice Chair of the Alberta DistrictCouncil, hosted the Calgary visit. The delegation met with IDA firmmembers and hosted a well-attendedmedia conference in Calgary to releasethe 1998 Alberta Fiscal andEconomic Outlook.

The visit also acted as a springboardto discuss taxes, regulatory and fiscalpolicies and other initiatives with gov-ernment officials. Included in the dis-cussions were Bill Hess, Chair of theAlberta Securities Commission;Stockwell Day, Alberta Treasurer andMinister of Finance; and David Man-ning, President of the Canadian Asso-ciation of Petroleum Producers and itsBoard of Directors.

OttawaThe Association meets annually with

senior federal government and politicalrepresentatives. This year’s agenda,scheduled for December 9th in Ottawa,included meetings with The Bank ofCanada, members of the Standing Sen-ate Committee on Banking, Trade andCommerce, Preston Manning, Leaderof the Official Opposition, the Office ofthe Superintendent of Financial Institu-tions, and the Business Council on Na-tional Issues.

The IDA Welcomes ItsNew Members

Abramson Partners Inc.Toronto, OntarioAugust 26, 1998

Maple Partners Futures Corp.Winnipeg, ManitobaSeptember 30, 1998

Benson-Quinn-GMS Inc.Toronto, OntarioSeptember 30, 1998

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New rules now in effect:The Association recently enacted Policy 5,

Trading in Domestic Debt Markets, a code ofconduct for trading in debt products. ThePolicy was developed in co-ordination with theBank of Canada and Department of Financeand is largely a codification of existing Mem-ber practices. The Policy requires Membersto have in place standards, procedures andinternal controls for debt trading, sets out spe-cific requirements for dealing with clients, andrequires Members to record, and produce ondemand, a report of large debt securities po-sitions. A copy of Policy 5 was distributed toUDPs in October and the Policy appears inBulletin # 2519.

The Association has adopted amendmentsto the capital and margin requirements whichare designed to address increased marketvolatility for Toronto 35 and TSE 100 Indexfutures contracts (Bulletin #2514) as well asamendments to the JRFQ&R definitions (Bul-letin #2532).

The Association has also issued several regu-latory bulletins over the past few months. Thefirst stage of implementation of the recom-mendations of the Joint Securities IndustryCommittee on Conflicts of Interest was an-nounced in Bulletin #2508. The first stagebrings into force a client priority rule for pri-vate placements and disallows the abridge-ment of hold periods where pros in a Memberfirm hold 20% of the issuer�s securities. TheSROs are working together to develop a cen-tral disclosure system which, when fully imple-mented, will require Members to disclose toclients all of their holdings over 10% in allsecurities. The IDA has also, in co-ordinationwith the other SROs, distributed ComplianceInterpretation Bulletin C-121 Trade Correctionand Cancellation Procedures which details how

REGULATORY UPDATE

Members should deal with incorrect or can-celled trades. The recently distributed Bulle-tin #2533 announced the end of permittingRRs who have failed to complete the PFP todowngrade to IR registration status. The newpolicy applies to all of those RRs who are stillwithin the 30 month period.

Upcoming rule changes:Rules that will become effective in the com-

ing months include:� Amendments to the introducing broker/car-

rying broker rules allowing Type 3 and Type4 introducing brokers to enter into more thanone Type 3 or Type 4 arrangement to ser-vice a particular product line or line of busi-ness or fully service a particular product lineor line of business provided a business casecan be made for the arrangement.

� Bond settlement dates for provincial, mu-nicipal and corporate short term debt willbe changed to 2 days from 3 days in keep-ing with the settlement dates for short termCanadian bonds.

Current Issues:Member Committees and Association staff

continue to work on issues related to the capi-tal implications of underwriting commitments,continuing education, and proficiency qualifi-cation changes and suitability requirements fordiscount brokers, among other things. The As-sociation is also responding to Canadian Se-curities Administrators� initiatives concerningreferral fee arrangements, independent con-tractors and franchising arrangements, the na-tional registration system and the emergenceof alternative trading systems.

For more information, please contact:Jennifer Elliot, Legal & Policy Counsel,(416) 943-6994 or jelliot@ida.ca

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Violations and Penalties

The following is a summary of theenforcement actions completedduring the period of July 20 toNovember 16 of 1998.

REPUBLIC SECURITIESCANADA(No. 2490/98)Violation: Failure to maintain atleast two officers, qualified in accor-dance with By-law 7.1A, who areengaged full-time in the business ofthe Member. This created a situationof risk to the public in the supervisionof its business operations.Penalty: Immediate suspension ofMembership; $7,000 fine; requiredto pay $3,000 towards the costs ofthe investigation.

AUREUS CAPITAL CORP.(No. 2498/98)Violation: Ceased to carry onbusiness as a securities dealer andfailed to comply with By-law 8.2 inorder to voluntarily resign fromMembership.Penalty: Membership terminated;required to pay $1,000 towards thecosts of the investigation.

Enforcement: Disciplinary Decisions UpdateAs the national self-regulatory organization of the Canadian securities industry, the IDA enforces rules and regula-tions regarding the sales, business and financial practices of its member firms. Investigating complaints anddisciplining members are part of the IDA’s regulatory role.

The IDA’s enforcement division may conduct an investigation of a member firm or registered person as the result ofan investor complaint or where it is considered necessary or desirable to ensure compliance with IDA By-Laws,regulations, or policies. A member firm or registered person can be summoned to a hearing and, if it is found thata violation has occurred, discipline penalties may be imposed. Whenever the IDA imposes disciplinary action on amember firm or registered employee, notice of the penalty is published in the form of a Disciplinary Bulletin whichis distributed to securities regulators and the media.

PIETER NEL LAMBERTUSSCHIKKERLING(No. 2505/98)Violation: Engaged in conductunbecoming a registered representa-tive by guaranteeing two clientsagainst losses resulting from tradingin their joint account without theknowledge or approval of theMember firm. Further, effected fourtrades in a client’s account withoutthe client’s knowledge or priorwritten authorization and without theaccount being accepted by themember as a discretionary account.Mr. Schikkerling is no longer em-ployed with a Member firm in thesecurities industry.Penalty: $5,000 fine for conductunbecoming; $5,000 fine for discre-tionary trading; close supervision for3 months; re-write and pass theCPH exam; required to pay $2,000towards the costs of the investiga-tion.

THOMAS JOHN LAPOINTE(No. 2506/98)Violation: Conducted trades offthe books of the Member firmthereby engaging in conduct unbe-coming or detrimental to the publicinterest. Further effected trades in

the account of a client on the instruc-tions of a third party without havingobtained a duly executed tradingauthorization. Mr. Lapointe is nolonger employed with a Member firmin the securities industry.Penalty: $15,000 fine for conductunbecoming or detrimental to thepublic; $10,000 fine for effectingtrades without proper trading authori-zation; re-write and pass the CPHexam; close supervision for 1 year;required to pay $1,000 towards thecosts of the investigation; prohibitionon his re-approval until all fines andcosts are paid in full.

DONALD GEOFFREY BEHANand SCOTT GRAFTONBARNUM(No. 2522/98)Violation: On two occasions, Mr.Behan accepted remuneration from aperson other than his employer-Member firm in connection with theplacement of securities. On the secondoccasion, Mr. Barnum, who was Mr.Behan’s partner, also accepted remu-neration from a person other than hisemployer-Member firm in connectionwith the placement of securities. Bothhad been disciplined by the Memberfirm.

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Penalty: $10,000 fine for Mr.Behan; $5,000 fine for Mr. Barnum;both must re-write and pass the CPHexam; both must be under closesupervision for 6 months; Mr. Behanwas required to pay $3,000 and Mr.Barnum was required to pay $2,000towards the costs of the investigation.

JEFFERY LYLE BRANDES(No. 2517/98)Violation: Misappropriated$770.00 from a client and traded insecurities on behalf of that client whileholding a restricted licence. Furthereffected a discretionary trade in theaccount of another employee andtraded in options while not licenced todo so. Mr. Brandes initially withheldor concealed information from theAssociation investigator in relation tothe above.Penalty: $5,000 fine; required topay $5,000 towards the costs of theinvestigation.

EDWARD CARL BLASIAK(No. 2521/98)Violation: Failed to ensure thatorders for the accounts of clients of aMember were given priority over allother orders executed on behalf ofthat Member.Penalty: $15,000 fine; re-write andpass the CPH exam; close supervi-sion for 6 months; required to pay$1,500 towards the costs of theinvestigation.

STEVEN PETER SOMBACH(No. 2524/98)Violation: Misrepresented to aclient that an order for a security hadbeen filled when he knew it had not.Further, effected three unauthorized

trades in the same client’s account inan attempt to disguise the originalfailure to purchase the security. Mr.Sombach is no longer employed witha Member firm in the securitiesindustry.Penalty: $10,000 fine for themisrepresentation to the client;$15,000 fine for the unauthorizedtrades; 2 year suspension; re-writeand pass the CPH exam; required topay $1,000 towards the costs of theinvestigation; prohibition on his re-approval until all fines and costs arepaid in full.

MICHAEL ROBERT ORR(No. 2530/98)Violation: Failed to use due dili-gence to ensure that trade recommen-dations for the account of a clientwere appropriate for the client. Mr.Orr is no longer employed with aMember firm in the securities industry.Penalty: $7,500 fine; re-write CPHexam; disgorgement of commissionsin the amount of $1,271.68; requiredto pay $2,500 towards the costs ofthe investigation. (Mr. Orr’s supervi-sor at the relevant time has also beendisciplined – see Bulletin No. 2403)

GEORGE ALEXANDERCAMPBELL(No. 2534/98)Violation: Failed to use due dili-gence to ensure that trade recommen-dations for the accounts of twoclients, a husband and wife, wereappropriate and in keeping with theirinvestment objectives. Further failedto ensure that the acceptance oforders for the accounts of the sameclients were within the bounds ofgood business practice. Finally, Mr.

Campbell effected trades in wife’saccount upon the instructions of thehusband without having obtained aduly executed trading authorization.Penalty: $10,000 fine; re-write andpass the CPH exam; required to pay$1,500 towards the costs of theinvestigation.

For more information, pleasecontact:Fred L. MaefsDirectorEnforcement Division(416) 943-6904fmaefs@ida.ca

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PACIFIC REGION

BC Business SummitFor the first time in the

province’s history, a high profilebusiness conference was held onNovember 8 & 9 at theVancouver Trade andConvention Centre. The PacificDistrict accepted an invitationfrom the BC Business Council tojoin 28 other associationsrepresenting 90% of the 150,000businesses in the province. JimStevens, the Association’s PacificRegional Director, served on the12 person steering committee.IDA Chair Ken Shieldscontributed to a grouppresentation and discussionabout ” Finance and ProfessionalServices in B.C.” and a workshopco-sponsored by the IDA and theVSE entitled “AttractingInvestment to BC”.

Both events had among thehighest attendance of all thesessions at the popular summit,which attracted over 850delegates from all parts of theprovince. One hundred andtwelve media were accredited forthe conference, and coverage wasextensive. The Summitmaintained a positive, substantiveand non-partisan outlook fosteredby key-note speakers such as localbusinessman Jim Pattison, formerPremier of New Brunswick FrankMcKenna, former Treasurer ofAlberta Jim Dinning, PentictonMayor and small business ownerBeth Campbell and a largenumber of CEOs.

Excessive personal andcorporate tax, regulation andlabor legislation were identified as

The Districts’ Reportthe key impediments to thecompetitiveness of businessessmall and large. A report waspresented to the various levels of

government and other interestedparties on December 9, and apublic information action-plan isbeing developed.

Mutual Fund SalesPractices Rule, NationalInstrument 81-105 andPolicy 81-105CP

This rule, which came into effecton May 1, 1998, is designed to setnew standards for sales andbusiness practices to be followedby those involved in the sale ofpublicly-offered mutual funds.Responding to requests fromPacific District staff and Members,and assisted by the VancouverIDA office, the BC SecuritiesCommission set up publicseminars in a number of citiesacross the province to answer

questions about the new nationalinstrument. Member firms,securities dealers, mutual fundcompanies and dealers, and the

public attended theseminars, held in Vancouver,Surrey, Kelowna, PrinceGeorge, and Victoria duringthe month of November.The presentations were very

well received and herald anew era in publiccommunication by theBCSC. The discussions alsoproduced some significantfood for thought. Anomaliesin the new rules andinequities between securitiesregistrants and employees offinancial institutionsemerged as the discussionmoved from city to city andthe presenters sought to

establish the balance betweeninvestor protection and properbusiness practices. As a result,BCSC staff have undertaken toraise industry concerns with theirCSA colleagues.

For more information, pleasecontact: Jim Stevens, PacificRegional Director, (604) 683-6222 or jstevens@ida.ca

PRAIRIE REGION

Progress on Arbitration

The Manitoba District Councilhas approved the BritishColumbia InternationalCommercial Arbitration Centre toadminister an arbitrationprogram within the Manitobadistrict. The Council is now inthe process of completing theformalization of this programme

IDA Chair Ken Shields

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with the Centre.A steering committee has been

set up to determine the effectivedate for the commencement of theManitoba program, to establishcriteria for the selection ofarbitrators, to establish themethod of promotion andcommunication to members andthe public and to ensure there arestandard brochures available forclient communications. Councilhas agreed that dissemination toclients of information regardingthe program would be theresponsibility of individualmember firms.

The Alberta District Council hasalso approved the BritishColumbia InternationalCommercial Arbitration Centre toadminister an arbitration programwithin the Alberta District. TheAlberta District Council will beforming a steering committee withthe Alberta Stock Exchange (ASE)to review the same agenda as theManitoba District steeringcommittee.

The Alberta Capital MarketFoundation

The Alberta Capital MarketFoundation is an educationalfoundation created by the AlbertaSecurities Commission, theAlberta Stock Exchange,investment dealers and theAlberta provincial government.The non-profit organisation isintended to promote educationand information about Alberta’scapital markets among the public,investors and small business. Witha start-up contribution from theAlberta Stock Exchange and theAlberta Securities Commission of$1.4 million, the Foundation will

fund programs and studies tohelp Alberta investors learn moreabout investing and teachentrepreneurs about raisingcapital. Members of the Boardinclude Chair John Cranston, ViceChair Phil Heimbecker of GoepelMcDermid Inc., Tom Cumming,President and CEO of the AlbertaStock Exchange, John Wells,Levesque Beaubien Geoffrion Inc.and the IDA’s Prairie RegionalDirector, Terry Melling. AFinancial Post editorial applaudedthe decision to establish theFoundation: “improved marketawareness should help investorsmake better decisions about whento buy or sell”, concluding that “initiatives such as the ASC’s areclearly long overdue”.

For more information, pleasecontact: Terry Melling, PrairieRegional Director at (403)260-6278 or tmelling@ida.ca

ATLANTIC REGION

IDA Recognition as SRO

The IDA was formallyrecognized as a self-regulatoryorganization (SRO) on September2, 1998 by the Nova ScotiaSecurities Commission pursuantto Section 30 of the Securities Act(Nova Scotia). The IDA teamworking on recognition includedCEO and President Joe Oliver,Senior Vice-President MemberRegulation Greg Clarke, Vice-President, Government andMember Relations ThomasDalzell, and Atlantic RegionalDirector Morag MacGougan.

Nova Scotia recognition is animportant step in achieving theAssociation’s goal of recognitionas the national self-regulator by

all securities commissions inCanada. The Association believesthat formal recognition by aprovincial securities commissionenhances our regulatorylegitimacy and efficiency and is inthe public interest. Currently, theIDA is formally recognized inOntario and Nova Scotia andrecognized for certain specificfunctions in Alberta. Recognitiondiscussions are joined in Quebec,where recognition requires theassent of the Minister of Finance.Saskatchewan has also expressedits interest, although it advocatesa CSA approach with the aim ofachieving consistency. Manitoba,New Brunswick, Prince EdwardIsland, and NewfoundlandSecurities Acts do not currentlypermit recognition of self-regulatory organizations. Oncerecognition takes place, the IDAand a provincial securitiescommission set out the terms ofrecognition by designating eachorganization’s formal roles andresponsibilities. These can includesuch issues as the sharing of feesand reporting requirements forby-law and regulatory changes.In satisfaction of one of its

undertakings to the Nova ScotiaSecurities Commission, the IDAhas established a toll free numberfor the Nova Scotia area (902 areacode) so that Member firms,clients and the public can call tollfree directly to the Association’sToronto offices. The toll freenumber is 1-888-IDA-3989 (1-888-432-3989).

For more information, please contact:Morag MacGouganOntario and Atlantic RegionalDirector(416) 943-6991mmacgougan@ida.ca

report continued on page 15

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Continuing Education/Registration Category ChartContinuing Education/Registration Category Chart

REGISTRATION CATEGORY CONTINUING EDUCATIONREQUIREMENT

Retail • Investment Representative• Investment Futures ContractRepresentative• Investment RepresentativeOptions

Compliance Program

• Registered Representative*• Registered Futures ContractRepresentative*• Registered RepresentativeOptions*• Registered Mutual FundRepresentative• Portfolio Manager (andAssistant)

Compliance Program and ProductKnowledge/Professional DevelopmentProgram

SupervisoryCategories(Retail)

• Branch Manager• Sales Manager• Assistant Branch Manager• Co-Branch Manager• Ultimate Designated Person(and Alternate),• Designated RegisteredFutures Principal (and Alternate)• Designated RegisteredOptions Principal (and Alternate)• Futures Contract Supervisor

Compliance Program and ProductKnowledge/Professional DevelopmentProgram

• PDO – Trading (RegisteredRepresentative*, RegisteredFutures ContractRepresentative*, RegisteredRepresentative Options*)

Compliance Program and ProductKnowledge/Professional DevelopmentProgram

• PDO – Trading (InvestmentRepresentative, InvestmentFutures ContractRepresentative, InvestmentRepresentative Options)

Compliance Program Only

• PDO – Non-Trading No Requirement

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Continuing Education/Registration Category Chart (Cont’d)

Non-Retail • Investment Representative• Investment Futures ContractRepresentative• Investment RepresentativeOptions

Compliance Program Only

• Registered Representative• Registered Futures ContractRepresentative• Registered RepresentativeOptions• Floor Trader• CATS Trader• Portfolio Manager (andAssistant)

Compliance Program Only

• PDO – Trading (RegisteredRepresentative, RegisteredFutures ContractRepresentative, RegisteredRepresentative Options)

Compliance Program Only

• PDO - Trading (InvestmentRepresentative, InvestmentFutures ContractRepresentative, InvestmentRepresentative Options)

Compliance Program Only

• PDO – Non-Trading No Requirement

*Those who have been licensed for more than 15 years at the inception of the program(expected July 1, 1999) are responsible for the compliance portion of the program only. Thosewho have been licensed for more than 10 but less than 15 years at the inception of the programare responsible for the complete program for one three-year cycle. After the completion of thatinitial cycle, they are responsible for the compliance portion of the program only.

Where you are registered in more than one category, you are responsible for the ContinuingEducation requirements of the more demanding category. For example, if you are registeredas a Floor Trader and a Registered Representative (Retail), you are required to complete theCompliance Program and the Product Knowledge/Professional Development Program.

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In our last issue of IDA Report, we reported on the process ofdeveloping a made-in-Canada Continuing Education (CE) pro-gram. Here’s an update of current activities.

A Progress ReportThe IDA’s Retail Sales Committee formed a Continuing Education ProgramWorking Group in 1996. Its mandate was to develop a made-in-Canada CEprogram, after examining the mandatory U S program. Their CE proposal hasbeen approved in principle by the IDA Executive Committee and reviewed bythe District Councils, the National Advisory Committee, the Retail Sales Com-mittee and member firm CEOs. During this consultation and discussion process,a number of constructive suggestions have been put forward and the draft pro-posal has been clarified and modified in response.

• There will be no mandatory exam for the compliance portion of the program.

• A process is being developed to allow District Councils to grant delays incompletion of the program within the required three years in documented casesof “hardship”.

• Fines for non-completion of the program have been reduced from $1,000 permonth to $500 per month during the six month period after the end of thethree-year cycle.

An Advisory Committee on Continuing Education (ACCE) has been establishedto develop guidelines for approval of courses and seminars under the CE pro-gram. Firms can choose to design and deliver their own compliance and productknowledge courses or their employees can take approved CE courses from anumber of providers, including local colleges, universities, the Canadian Securi-ties Institute, and other third party providers. Member firms may use the ACCEguidelines to assist them in determining CE course suitability.

Next StepsThe CE proposal will be presented for Board approval at the IDA Janu-ary, 1999 Board meeting. Current plans call for a July 1, 1999 start-update. Look for more information on the proposal and plans in upcomingissues of the IDA Report.

For more information, please contact:Morag MacGougan, Atlantic and Ontario Regional Director(416) 943-6991, mmacgougan@ida.caLarry Boyce, Director, Sales Compliance and Registration(416) 943-6903, lboyce@ida.ca

Continuing Education: Coming to Canada:An Update

CE Proposal HighlightsAll CE registrants are on the same

three-year cycle, which begins andends at the same time for everyone.Participation in the program dependson how you are registered. If youare registered as trading, you will beenrolled in the CE program. If youare registered as non trading, you donot need to participate in the program.Everyone (who is registered as trad-ing) must take a compliance courseduring the three-year cycle. Sometrading registrants must also take aproduct knowledge/professional de-velopment course. Registrants whohave been continuously registered for15 years at the inception of CE willnot be required to take product knowl-edge courses (Please see Registra-tion Category/CE RequirementsChart on pages 8-9 of this issue formore details.)

Firms can choose to design and de-liver their own compliance and prod-uct knowledge courses or their em-ployees can take approved CEcourses from a variety of course pro-viders including the Canadian Secu-rities Institute, colleges, universities,and other educational providers.Firms have discretion to approve in-dividual CE courses on the basis ofguidelines, subject to SRO audit.And, finally, firms will report indi-vidual employee’s complete/incom-plete CE status to the IDA which willbe responsible for tracking and re-porting, on an annual basis, regis-trants’ status. If a registrant has notcompleted the required courses at theend of the three year cycle, penal-ties—ranging from monthly fines tosuspension at the end of a 6 monthperiod—may be invoked.

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There really is a Santa Claus . . .Advisor’s Edge, Maclean Hunter’s new magazine for the financial professional, appar-ently still believes in Santa Claus. Or so their December issue article COLD CALL fea-turing 1998 National Distinction Winner Bruce Templeton might lead you to believe.

We quote:

Santa Claus

It�s true! Santa Claus really is a financial advisor. Every December, for thelast 20 years, Bruce Templeton of RBC Dominion Securities has donned thered and white in St. John�s, NFLD. This year�s winner of the InvestmentDealers Association�s Distinction Program takes community involvement toan inspiring new level � visiting close to 50 hospitals, seniors� homes, com-munity centres and more. Apparently the parade is a real hoot.

Advisor�s Edge interviewed Santa. Some excerpts:

AE �Do you employ a financial advisor?

SC Oh yes, of course. Mrs. Claus is Santa�s financial advisor.

AE What are the financial advisors on your gift list asking forthis year?

SC Thus far, everyone seems to be relatively calm. A lotof requests for crystal balls. Four requests for bear traps.We have noticed a complete lack of bullwhips this yearthough.

AE What is the one New Year�s resolution you�d like tosee financial advisors make?

SC Never confuse having a career with having a life.Get down on the floor and play with your children.

IDA Report thanks Advisor’s Edge for permission to publish this article. Forsubscription information please call: 416-596-5248.

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83rd IDA Annual Conference: It’s Jasper in June of 1999

This year the IDA’s Annual General Meeting and Conference will take place in Jasper, Alberta. The Conference beginsSaturday evening, June 26 and concludes Monday, evening June 28

th. Delegates depart Tuesday morning, June 29

th.

There’s a new formatIDA Members and conference guests can look forward to a new conference format this year. It’s shorter, more

condensed and more focussed on topics and issues members have identified.We’re offering a packed program of industry-related seminars and panel discussions led by industry experts and

leaders. We’ll be covering topics that our members haveidentified as their concerns and issues. There will be some-thing of interest to all members, whether you’re a fullservice firm, a niche provider, national or regional in scope,large or small.

For the first time, a Forum for Small, Independent andRegional Dealers will be held during the Conference. Moreinformation will follow soon on format and topics.

But some good things never changeReceptions, dinners, and social events provide

opportunities to meet old friends and make newcontacts with securities industry members fromacross the country.

Jasper Park Lodge offers something for everyoneDeep in the Canadian Rockies, Jasper Park Lodge is located in the largest and one of the oldest national mountain

parks in Canada. Its elegant cedar chalets and authentic log cabins are arranged in the style of an alpine village, offering aunique and intimate experience. And from a challeng-ing 18-hole championship golf course of unparalleledbeauty (ranked by Score magazine as number one inNorth America), to four hard-surface tennis courts, tomore than 300 km of trails, meadows, and hikes, sum-mer in the Rockies doesn’t get any better than this. Tro-phy fish in one of many mountain lakes bubbling withtrout, roar down the river on a guided whitewater raft,or go horseback riding or mountain biking through thebeautiful Jasper valley.

Detailed information and registration packages willbe available and distributed in January.

For more information, please contact:Connie Craddock Director of Public Affairs(416) 943-5870 or ccraddock@ida.ca

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The IDA is re-examining its Member Servicesfunction with a view to expanding the delivery ofnon-securities-related services to members.

Such services can provide substantial benefits,particularly when provided at a significantdiscount to members.

Last August, we distributed a survey to allmember firms, asking them for their opinions asto which services would be most useful to them ifthey could be provided at a discount to theircurrent costs. Response to the survey was verygood, with 66 member firms replying ( 38%response rate). Not surprisingly, response camealmost exclusively from smaller and mid-sizefirms.

Members identified the top five priorities forsavings:

· Computer Hardware Purchases

· Group Health Benefits Package

· Cell Phone-paging Services

· Preferred Hotel Rates

· Internet Service Provider

Preliminary investigations revealed that the firstpriority—computer hardware purchases- is not apromising option for discounted services. Marginsare thin and there is no uniformity in demand asto the manufacturer of choice. We are continuingour review of opportunities and prospectsregarding the four other priorities and will reportour findings to members.

In our last issue of the IDA Report, weannounced our first volume discount program forIDA members. After extensive negotiations, theIDA, the Toronto Stock Exchange (TSE) and theInvestment Funds Institute of Canada (IFIC)

developed the Sprint Canada Affinity LD/Toll FreeService Plan. This program has now been operatingfor approximately three months. To date, there are103 customers on the plan of whom 61 are new and41 existing Sprint Customers. Sprint reportssatisfaction with the Plan, as do our members.

We have also introduced a CanadianAutomobile Association (“CAA”) IDA GroupMembership Plan to 101 firms in Central Ontarioonly. To date, 106 primary and associateparticipants have joined the plan. At year end, weplan to evaluate the plan with a view to expandingit throughout Canada.

For additional information, please contact:

Kathy MaefsMember Services Coordinator(416) 943-5873kmaefs@ida.ca

Member Services Update

14

The Canadian SecuritiesAdministrators are movingquickly and decisively to ensurethe public and the industryknow what is being done toprepare for New Year’s Day,2000.

A national rule was drafted bythe Ontario SecuritiesCommission and came intoforce Oct. 15. The OntarioMinister of Finance proclaimedthe rule immediately underthe urgency provisions of theSecurities Act. This was the firsttime a rule has been proclaimedunder the provision and it willautomatically expire on July 16.

The CSA has now approvedNational Instrument 33-106 Year2000 Preparation Reporting.This National Instrumentrequires each CSA registrant tofile with the various securitiescommissions a Year 2000 surveyand a Year 2000 ManagementCertificate. These certificatesshould have been filed byOctober 31, 1998. For SROMembers, filing the appropriatedocuments with their SRO cansatisfy these requirements. TheSROs have filed the documentswith the appropriate SecuritiesCommissions who, in turn, planto make the documents public.

TestingPreliminary industry-wide

test plans have beenestablished. These test plans can

There’s been a lot of activity and muchprogress on the creation of Canada’s newself-regulatory organization, the MutualFund Dealers Association.

As reported in previous issues of theIDA Report, Jacques Daoust (Chair of theInvestment Funds Institute of Canada)serves as MFDA Chair with the IDA’s JoeOliver serving as CEO and President ofthe new self-regulatory organizaton. A21 member board of directors, consistingof six IFIC appointees, one member fromamong other fund distributors, sevenIDA appointees, and seven publicdirectors has been in place since lastApril and the Association’s first ChiefOperating Officer, Larry Waite, beganwork on October 1.

Five industry committees have beenhard at work since the summer.Comprised of volunteers from theindustry, as well as non-votingrepresentation from IFIC, the IDA and theCSA, the committees have the task ofrecommending policies, regulations andby-laws to the Board of Directors. Currentplans are for completion of this importanttask by late spring, at which point theproposed regulatory framework will besent to the securities commissions forreview and public comment. Once thisprocess is completed, the newAssociation will be formally recognizedand able to receive its first members.

Communication with potentialmembers and the public is a top priorityfor the MFDA. Their first newsletter ,MFDA in transition, is being distributedin December and a website to be locatedat http//:www.mfda.ca, is expected tobe operational early in the New Year. Ifyou would like a copy of the newsletter,please fax your name, firm, address andphone number to (416) 364-0753.

For more information, please contact:Larry Waite, Chief Operating Officer,Mutual Fund Dealers Association416-943-5887 or lwaite@mfda.ca

be found on the OntarioSecurities Commission website.(www.osc.gov.on.ca/en/Y2K/Scope2000/testprogram.html).Test plans have been created formutual funds, equities, anddebt. These test plans includetest objectives, criteria forselecting test participants, andtest dates. Criteria for selectingtest participants includecompletion of internalremediation and testingprojects, completion of assessedreliance on externalorganisations and completionof external point-to-pointtesting.

The Beta Tests for bothmutual funds and equities arescheduled for Saturday, March13, 1999 to Saturday, March 20,1999. The industry-wide testsfor mutual funds and equitiesare scheduled for Saturday,May 29, 1999 to Sunday, June6th. Debt tests are scheduled forMonday, March 8, 1999 toThursday, March 11th, 1999.

The Association will continueto keep members informed ondevelopments regarding thisimportant issue.

For more information, pleasecontact:

Keith RoseVice President,Regulatory Policy(416) 943-6907krose@ida.ca

Year 2000: Preparing for the FutureMFDA Update

15

report continued from page 6

Ontario RegionArbitration approved forOntario

Pursuant to By-Law 37.1, theOntario District Council, theRetail Sales Committee and theExecutive Committee of the IDABoard of Directors have approveda proposal to introducearbitration to Ontario early in1999. ADR Chambers, a nationalalternative dispute resolution firmcomprised of retired judges andsenior legal counsel, has beenselected to administer theprogram. The program isscheduled for introduction onJanuary 1, 1999. The amount ofclaim at issue can range from aminimum of $6,000 to amaximum of $100,000, covering aperiod commencing on June 30,1998. More details will becommunicated to member firmsprior to the commencement of theprogram.

IDA participates in insuranceregulation consultationIn June, 1998 the Ontario

Insurance Commission ( FinancialServices Commission of Ontario,“FSCO”) issued for comment“Discussion Paper on Regulationof Insurance Distribution andCoordination of Financial ServicesRegulation in Ontario”. TheDiscussion Paper proposedchanges to Ontario’s system ofregulation of insurancedistribution to ensure it isharmonized and coordinatedwith the regulation of distributionof other financial services,

provides the least restrictiveregulatory alternative necessary toprotect the consumer, and ensuresefficient industry-basedregulation. To achieve thesegoals, the Discussion paperrecognized the need for theregulatory focus to be shifted fromthe individuals who sell insuranceto the activity of selling.The IDA formed a committee of

members interested in theinsurance business to review thegeneral concepts set forth in theDiscussion paper and submittedits comments to FSCO.

For more information, please contact:Michelle AlexanderLegal & Policy Counsel(416) 943-5885malexander@ida.ca

Quebec Region

The Quebec Public Curator Actwas adopted in December 1997and its Regulation published thisFall. The original plan had calledfor a January 1st 1999 application.Various groups, including the

Quebec District have been makingrepresentations to theGovernment regarding seriousproblems as to the application ofthis Regulation. Discussionmeetings are scheduled with theCurator’s representatives early inJanuary. In the meantime, theGovernment has postponed theJanuary 1st deadline until sometime in the Spring.

For more information, please contact:Fernande LanoixQuebec Regional Director(514) 878-2854 x222 orflanoix@ida.ca

The Investment Dealers Association of Canada is the national self-regulatory organizationand trade association of the securities industry. The Association’s role is to foster fair, com-petitive and efficient capital markets by encouraging participation in the savings and invest-ment process, and by ensuring the integrity of the marketplace.

TORONTO Suite 1600, 121 King Street West, Toronto, Ontario M5H 3T9Tel: (416) 364-6133 Fax: (416) 364-0753

MONTRÉAL Suite 2802, 1, Place Ville Marie, Montréal, Quebec H3B 4R4Tel: (514) 878-2854 Fax: (514) 878-3860

CALGAR Y Suite 2330, 355 Fourth Avenue S.W., Calgary, Alberta T2P 0J1Tel: (403) 262-6393 Fax: (403) 265-4603

VANCOUVER Suite 1325, P.O. Box 11614, 650 West Georgia Street,Vancouver, British Columbia V6B 4N9Tel: (604) 683-6222 Fax: (604) 683-3491

The IDA Report is published four times a year by the InvestmentDealers Association of Canada, Public Affairs Department. Forfurther information please call (416) 943-5870 or e-mail:ccraddock@ida.ca.

Ce rapport est disponible en français sur demande.

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