Housing agency now backing $502 billion in Canadian mortgages
Article by Peter Stockburger
On May 17, 2017, the US Securities and Exchange Commission (SEC), through its National Exam Program, issued a “Risk Alert” to broker-dealers, investment advisers and investment firms to advise them about the recent “WannaCry” ransomware attack and to encourage increased cybersecurity preparedness. The purpose of the alert, according to the SEC, was to “highlight for firms the risks and issues that the staff has identified during examinations of broker-dealers, investment advisers, and investment companies regarding cybersecurity preparedness.”
Based on a 2015 survey of 75 SEC registered broker-dealers, investment advisers and investment firms, the SEC National Exam Program staff recognized certain firm practices that registrants may find relevant when dealing with threats such as the WannaCry ransomware attack:
- Cyber-risk Assessment: Five percent of the broker-dealers, and 26 percent of the investment advisers and investment companies examined “did not conduct periodic risk assessments of critical systems to identify cybersecurity threats, vulnerabilities, and the potential business consequences.”
- Penetration Tests: Five percent of the broker-dealers, and 57 percent of the investment companies “did not conduct penetration tests and vulnerability scans on systems that the firms considered to be critical.”
- System Maintenance: All broker-dealers, and 96 percent of investment firms examined “have a process in place for ensuring regular system maintenance, including the installation of software patches to address security vulnerabilities.” And only ten percent of the broker-dealers, and four percent of the investment firms examined had a significant number of critical and high-risk security patches that were missing important updates.
The SEC recommends registrants undertake at least two separate tasks: (1) assess supervisor, compliance and/or other risk management systems related to cybersecurity risks; and (2) make any changes, as may be appropriate, to address or strengthen such systems. To assistant registrants, the SEC highlights its Division of Investment Management’s recent cybersecurity guidance, and the webpage of the Financial Industry Regulatory Authority (FINRA), which has links to cybersecurity-related resources.
The SEC cautions that the recommendations described in the Risk Alert are not exhaustive, “nor will they constitute a safe harbor.” Factors other than those described in the Risk Alert may be appropriate to consider, and some factors may not be applicable to a particular firm’s business. Moreover, future changes in laws or regulations may supersede some of the factors or issues raised in the Risk Alert. Ultimately, the “adequacy of supervisory, compliance, and other risk management systems can be determined only with reference to the profile of each specific firm and other facts and circumstances.”
The SEC recognizes that it is not possible for firms to anticipate and prevent every cyber-attack. However, “appropriate planning to address cybersecurity issues, including developing a rapid response capability is important and may assist firms in mitigating the impact of any such attacks and any related effects on investors and clients.”
Dentons is the world’s largest law firm, a leader on the Acritas Global Elite Brand Index, a BTI Client Service 30 Award winner, and recognized by prominent business and legal publications for its innovations in client service, including founding Nextlaw Labs and the Nextlaw Global Referral Network. Dentons’ global Privacy and Cybersecurity Group operates at the intersection of technology and law, and was recently singled out as one of the law firms best at cybersecurity by corporate counsel, according to BTI Consulting Group.
Dentons is the world’s first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world’s largest law firm, Dentons’ global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com
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TORONTO _ Rarely has an IPO drawn as much political attention as Kinder Morgan’s for its Trans Mountain pipeline expansion. Projected to be worth $1.75 billion as of last week, it’s also one of the most valuable share offerings since Manulife Financial went public for $2.49 billion in 1999.
Here’s a look back at some of the biggest IPOs in Canada since 2000:
Sun Life Financial: $1.8 billion in 2000. Soon after Manulife’s blockbuster IPO, Sun Life Financial raised $1.8 billion from its own share offering. The insurance company listed on the Toronto market in March 2000, one of a wave of so-called demutualizations by insurers in 1999 and 2000. Other insurers that went public around that time include Clarica, which Sun Life took over in 2001, and Canada Life Financial, which was purchased by Great-West Lifeco in 2003. The stock debuted below $14 and rose to more than $55 by 2007. In early trading Tuesday, it was at $44.33.
Hydro One: $1.66 billion in 2015. The Hydro One IPO, another politically charged stock offering, was part of the Ontario government’s plan to raise money to fund transit and infrastructure projects. The partial sale of the utility also triggered concerns from critics who said it would push the province further into debt and result in higher electricity prices. It debuted at $21.50 and in early trading Tuesday it was at $23.38.
PrairieSky: $1.46 billion in 2014. Calgary-based energy giant Encana Corp. raised $1.46 billion in a spring 2014 IPO when it spun off 40 per cent of its PrairieSky Royalty subsidiary, which pays dividends based on its rights to oil and gas exploration areas in Alberta. After debuting on the open market at $37 in May and hitting a peak of $42.39 in July 2014, PrairieSky was trading early Tuesday at $30.21.
Athabasca Oil: $1.35 billion in 2010. Founded in 2006, the energy company is focused on the development of oil assets in northern Alberta. In 2014, Athabasca Oil completed the sale of its Dover project to PetroChina for $1.18 billion. After debuting around $15, the stock fell to $10 within six weeks. Their stock has been below $2 since January, trading at $1.27 early Tuesday.
Franco-Nevada: $1.1 billion in 2007. The Toronto-based mining royalties company was taken private in 2002 and went public in 2007, raising $1.1 billion on the strength of its portfolio including Barrick Gold Corp.’s Goldstrike property and Stillwater Mining Co.’s Stillwater property. Since its debut in December 2007, Franco-Nevada’s stock has increased from around $15 to $98.65 shortly after markets opened Tuesday.
With average household debt and housing prices at record highs across Canada, a new poll by CIBC (CM:TSX) (CM:NYSE) finds that a growing number of Canadian homeowners (48 per cent) are choosing to renovate this year, but are spending less to do so. Homeowners will spend $11,800 on average – the lowest in three years – to address ‘wear and tear’ and basic home maintenance, like painting, flooring, and replacing appliances.
Further, as many as 56 per cent of homeowners who plan to renovate are choosing to stay put and spruce up their space instead of selling their current home and buying another.
Key poll findings:
- 48 per cent of Canadian homeowners intend to repair or improve their home this year, up from 37 per cent in 2016. Among those planning to renovate this year:
- $11,800 is the average they plan to spend on their renovation, down from roughly $13,000 last year
- Homeowners in Ontario and British Columbia plan to spend the most at $16,000 and $13,200, respectively
- 56 per cent are choosing to renovate instead of selling and buying a new home
- The primary reason to renovate is to address ‘wear and tear’, with a third (32 per cent) saying they ‘need to do repairs’; another quarter (25 per cent) ‘want to make their home look nice’, and 12 per cent want to increase the value of their home to sell.
- Top renovation projects include basic maintenance (48 per cent); landscaping (38 per cent); and bathroom renovations (31 per cent).
- 67 per cent will use cash or savings to fund their projects, while 25 per cent will cover the costs with a loan, line of credit or credit card
- $11,800 is the average they plan to spend on their renovation, down from roughly $13,000 last year
“These findings show that the decision to either renovate or relocate comes down to your financial situation, emotional attachment to your home, and ultimate real estate goals,” says Scott McGillivray, renowned real estate investor, contractor and television personality. “While moving into a new home can help address your need for space, a renovation can often help achieve the same goal, while keeping you in your neighbourhood and, if done right, adding value to your home. Do your research first by speaking with your realtor, a trusted contractor and your financial adviser. Expert advice can help you determine which option best fits your needs and your budget.”
Biggest irritants and worries
Not surprisingly, the poll finds homeowners about to embark on renovations are most worried about project delays, household disruption and overspending. While the majority (86 per cent) agree ‘renovations end up costing more than you plan for’ and 31 per cent admit they blew their budget on a previous project, almost two-thirds (61 per cent) of those planning to renovate this year don’t have a detailed budget for their upcoming project.
“Renovations can be stressful, but having a detailed budget can help minimize the disruption and keep your project on track,” says Scott Wambolt, Senior Vice President, Retail and Business Banking, CIBC. “Be clear about the goals and limits of your project as well as the costs before you head over to the hardware store or pick up your toolbox. While DIY can add up to some cost savings, it could end up costing you more if you don’t know what you’re doing.”
The trick is to make sure your small fix doesn’t turn into a bigger project than you’d planned for and cost you more than you bargained for in time or money, he adds.
Among those planning to renovate, homeowners in Ontario and British Columbia plan to spend the most, at $16,000 and $13,200, respectively, funded mainly by cash or savings. While spending is lower in Quebec at $8,400, as many as a third (32 per cent) say their project will add to their debt.
The poll findings also reveal that fewer Boomers (36 per cent) plan to renovate than younger Canadians, but they will spend nearly twice as much at $16,800, with the bulk of it being spent on home repairs (45 per cent) or landscaping (34 per cent). This group was also more likely to cite “increasing the value of their home to sell” as a primary purpose for undertaking the project.
“Renovations can be a great way to invest in your home. When done right they can make a home more functional, more energy efficient, and they’re a great way to freshen up a tired space,” says Mr. McGillivray. “Just be sure any upgrades are in keeping with the quality of the rest of the neighbourhood, especially if your goal is to add value to your home and/or recover the cost when you sell.”
CIBC’s Home Renovation Checklist can help homeowners with valuable tips and advice to keep their project on track.
Tips for less stressful renovation:
- Plan for what will (and won’t) be part of your project
- Know if you will live out or live-through your renovation
- Create a budget – and stick to it!
- DIY what you know
- Hire a professional for what you don’t
CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units – Retail and Business Banking, Wealth Management and Capital Markets – CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/ca/media-centre/ or by following on LinkedIn (www.linkedin.com/company/cibc), on Twitter @CIBC, Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.
Bill Gates just announced his summer book recommendations. They all have something in common.
By Victoria Bischoff and James Burton For The Daily Mail
Britain’s biggest insurer last night vowed to end a rip-off hitting millions of families.
In a victory for the Daily Mail, the boss of Aviva said it was wrong to charge loyal customers more every year.
Mark Wilson admitted the market was dysfunctional and promised to overhaul the way his firm sells insurance to ensure that all his 16million customers would have the best prices.
He called on the rest of the industry to follow suit.
The boss of LV=, which is the biggest car insurer, rallied to his call last night, admitting more needed to be done to help customers who stay with the same provider.
A Money Mail investigation revealed on Monday that loyal customers routinely pay three times the lowest market price for car and home cover.
In the worst cases they are charged £1,000 more than new customers, whose cut-price deals they effectively subsidise.
Speaking at Aviva’s annual meeting yesterday, chief executive Mr Wilson said: ‘There’s the broader problem of steep price rises when artificially low introductory discounts come to an end.
‘This means across the whole industry in the UK, when customers come to renew, they often get quoted more.
‘The market is broken. I don’t like it and neither do our customers. This dysfunctional market is a problem for the whole industry. And it requires an industry-wide solution. But we aren’t waiting for that.’
Mr Wilson promised to introduce a new product to ensure customers always got the best deal.
However, the firm would not reveal any more details. Richard Rowney, chief executive of LV=, told the Mail: ‘We agree that more needs to be done to support loyal consumers and we strongly believe that we need to tackle this together as an industry.
‘We will work to ensure that we continue to do what’s in the best interests of consumers, focusing on providing them with value for money and a great service.’
A spokesman for Direct Line said: ‘We will look at this new launch with interest.’
Mr Wilson told the Mail last night: ‘We’ve been working for the last 12 months on a product which rewards loyalty and offers our best prices to our existing customers and we plan to launch this later this year.
‘It’s time to tackle the broken system of steep price rises for insurance after artificially low introductory discounts end and we congratulate the Daily Mail on its campaign.’
Former pensions minister Baroness Altmann said: ‘Well done to the Daily Mail.
‘I’m delighted to see that Aviva is acknowledging these problems and it’s a really good step forward. It’s very often the most vulnerable people – the elderly and disabled – and those who work too many hours of the day who lose out because they don’t switch.’
Usually customers are offered better prices only if they threaten to leave.
At some insurers, as many as 80 per cent of customers roll over their insurance with their existing deal. The longer customers stay with their insurer, the more they are likely to be overpaying.
The renewal rip-off is thought to cost drivers £1billion a year.
James Daley, of consumer group Fairer Finance, said: ‘It’s great that Aviva are taking a stand and I hope that other insurers will follow suit … I’m sceptical that others will stop playing the game without heavy-handed intervention from regulators.’
A spokesman for the Association of British Insurers said: ‘The UK insurance market is highly competitive with most customers shopping around and lots of switching.’
Edited for ILSTV