BUS 410 Lect 7 Securities Firms
FINANCIAL INSTITUTIONS
BUS 410
SFU
Beedie School of Business
Patrick Lenouvel
INVESTMENT BANKS - SECURITIES FIRMS
1987: Regulatory changes
The 1987 changes in the framework of Canadian financial market allowed commercial banks to acquire security firms or to expand into the security business.
As a result, most major commercial banks acquired Canadian dealers:
RBC bought Dominion Securities in 1988, Pemberton (89), Mc Neil Mantha (91)
Richardson (96)
CIBC acquired Wood Gundy in 1988
Bank of Nova Scotia acquired McLoed Young Weir in 1987
BMO acquired Nesbitt Thomson (in 1988), Burns Fry (in 1994)
National Bank acquired Levesque Beaubien in 1988
TD Securities built from within (organic growth) but bought First Marathon in 93
The Canadian capital market
Equity market = around 3 to 4% total world market but large relative to GDP
(98%) (vs 130% for the US, 79% for the UK)
Characterized by small number of large issuers (many in Ontario) and many small issuers including many microcaps (mostly in BC and in Alberta)
1000 listed companies with market cap of less than $5 million
385 listed companies between $5 million to $10 million
Deal types: Example RBC
Debt:
Canadian Corporate
Government Corporate
30.70%
19.80%
Canadian syndicated loan
21.30%
Canadian equity, equity linked, preferred
14.90%
Canadian M&A
16.27%
Regulations
Primary regulators: Provincial Securities Commissions co-ordinated through the Canadian
Securities Administrators (CSA)
Each provinces and territories has a securities commission
Eg: Ontario Securities Commission,BC Securities Commission
Each provinces has their own legislation.
The role of the CSA is to develop uniform rules
Note: Canada is the only industrialized country without a national securities regulator
National Self Regulatory
Organization
Investment Industry Regulatory Organization of Canada, formed in 2008 through the consolidation of the Investment Dealers
Association of Canada (IDA) , and the
BUS 410
SFU
Beedie School of Business
Patrick Lenouvel
INVESTMENT BANKS - SECURITIES FIRMS
1987: Regulatory changes
The 1987 changes in the framework of Canadian financial market allowed commercial banks to acquire security firms or to expand into the security business.
As a result, most major commercial banks acquired Canadian dealers:
RBC bought Dominion Securities in 1988, Pemberton (89), Mc Neil Mantha (91)
Richardson (96)
CIBC acquired Wood Gundy in 1988
Bank of Nova Scotia acquired McLoed Young Weir in 1987
BMO acquired Nesbitt Thomson (in 1988), Burns Fry (in 1994)
National Bank acquired Levesque Beaubien in 1988
TD Securities built from within (organic growth) but bought First Marathon in 93
The Canadian capital market
Equity market = around 3 to 4% total world market but large relative to GDP
(98%) (vs 130% for the US, 79% for the UK)
Characterized by small number of large issuers (many in Ontario) and many small issuers including many microcaps (mostly in BC and in Alberta)
1000 listed companies with market cap of less than $5 million
385 listed companies between $5 million to $10 million
Deal types: Example RBC
Debt:
Canadian Corporate
Government Corporate
30.70%
19.80%
Canadian syndicated loan
21.30%
Canadian equity, equity linked, preferred
14.90%
Canadian M&A
16.27%
Regulations
Primary regulators: Provincial Securities Commissions co-ordinated through the Canadian
Securities Administrators (CSA)
Each provinces and territories has a securities commission
Eg: Ontario Securities Commission,BC Securities Commission
Each provinces has their own legislation.
The role of the CSA is to develop uniform rules
Note: Canada is the only industrialized country without a national securities regulator
National Self Regulatory
Organization
Investment Industry Regulatory Organization of Canada, formed in 2008 through the consolidation of the Investment Dealers
Association of Canada (IDA) , and the