Fiscal Decision Time for Political Leaders

Global economies will face significant challenges in 2013 and beyond regardless of the scope and direction of imminent fiscal decisions according to a new report, Search for Growth: Fiscal Decision Time for Political Leaders. The report -- written by the Economist Intelligence Unit and sponsored by BNY Mellon, CIBC Mellon's U.S. parent -- examines the diverse opinions of leading market watchers and participants.

Key findings include:

• Experts are divided on whether government leaders will make the tough fiscal decisions necessary to save their economies.
• Viewing the U.S. "fiscal cliff" as a binary event distorts what's likely to happen.
• The European economy faces two major uncertainties: Will European countries ever submit themselves to outside fiscal control? Will the European Central Bank cut off an ailing country from further support if it fails to meet conditions for its loans?

This paper, written by the Economist Intelligence Unit, is part of the BNY Mellon-sponsored Search for Growth research initiative. more »

Author: The Economist Intelligence Unit (EIU)

Publication date: January 2012

Central clearing further strengthens Canada’s financial market infrastructure

The market for securities repurchase agreements (“repos”) is a key source for market funding in Canada. Insurance companies, pension funds, dealers and banks, all use the repo market in some way to manage cash balances. On February 21, 2012, the CDCC launched the first phase of Canada’s new central counterparty (CCP) for the fixed income market. The new fixed income CCP centrally clears repurchase agreements (repos) of securities issued by the Government of Canada and by Federal Crown Corporations.

Lou Lesnika, assistant vice president, trade settlements, looks at Canada’s new central counterparty for fixed income repurchase agreements and at other emerging changes to central clearing in Canada. more »

Author: Lou Lesnika

What sets Canada apart?

Canada is attracting interest from international securities lending players, says
Phil Zywot, Head of Trading, CIBC Mellon

Once discounted for its conservative practices and comparatively small market, Canada continues to receive outsized attention from investors around the world for its strong governance, stable banks and effective regulation. Investors are looking to Canada for best practices and opportunities - and the country's securities lending market players are working to respond to this growing demand.

Reprinted with permission of Euromoney PLC.

Author: Phil Zywot

Publication: Global Investor/isf magazine

Publication date: September 2012

Canada's Window of Opportunity

As a leading Canadian custodian, CIBC Mellon is often asked to share its insight of the various market indicators because of its unique position as an asset servicer to a diverse range of segments across the financial services industry including hedge funds, pension plans, mutual funds, alternative investments, insurers and others. Specific to the Canadian hedge fund industry, we anticipate tremendous growth opportunities in 2013 for hedge funds. Our outlook is based not only on the leading indicators we’ve witnessed through our industry servicing experience in Canada but also our view of the global marketplace and economic events. more »

Author: Charbel Cheaib

Publication: Canadian Hedge Watch

Publication date: August 2012

Coping with collateral: Mitigating counterparty credit risk in OTC derivatives

Following the 2008 market downturn, derivatives market participants, regulators, legislators and other stakeholders have been moving towards a number of trends, including: standardization and simplification of OTC derivatives contracts; greater market transparency through establishment of trade repositories; migration of OTC derivatives business to central counterparties; and requiring market participants to engage in risk mitigation processes. Today’s OTC derivatives markets demand stronger reporting, more intensive processing, more accurate pricing and much more effective management of collateral. more »

Author: Claire Johnson

Global Investment Performance Standards (GIPS®): A new definition of transparency

Global Investment Performance Standards has emerged as the global benchmark for investment performance measurement and reporting. GIPS are “a set of standardized, industry-wide ethical principles that provide investment firms with guidance on how to calculate and report their investment results to prospective clients.” They have been designed to be the premier set of standards globally, representing best industry practices in “quantifying and presenting investment performance that ensure fair representation and full disclosure.” GIPS delivers compelling value for investment managers as they enable institutional investors to compare manager performance against a single set of global standards. In addition, adhering to such standards enables firms to demonstrate the quality of their reporting and their strong internal control policies. more »

Publication date: November 2011

Exchange Traded Funds: Leveraging insight to deliver operational efficiency

Since the early nineties, Exchange Traded Funds (ETF) have been playing an increasingly prominent role in the portfolios of institutional and retail investors alike. Liquidity, transparency and the fee structure of ETFs have given them a presence and appeal that resonate well in today’s highly volatile market. Risk focused managers are looking to ETFs as a source of diversification and hedging. Institutional investors see the potential of being a market maker. Sophisticated retail investors understand the accessibility and leverage that ETFs can offer. Collectively the appeal has resulted in a more than 200 per cent increase in assets in Canada since June 2006. more »

Publication date: September 2011

Redefining collaboration: From custodian to asset servicing provider

With the looming possibility of a double-dip recession and the lingering lessons of the financial crisis, institutional investors are actively seeking ways to boost performance while managing significantly increased reporting and accountability requirements. Though creating returns for investors while appropriately managing risk remains the central focus, institutional investors are seeing more and more of their time taken up in reporting to regulators, governments and their own internal stakeholders. Risk management, transparency and good governance are no longer mere buzz-words, but are now requirements for participating in the global capital marketplace. more »

Publication date: June 2011

Institutional investors from around the world count on CIBC Mellon to settle trades quickly, identify and correct issues promptly and reconcile accounts precisely.  The accurate execution of time-sensitive investment strategies is central to the management of any institutional investment portfolio. This trade settlement process hinges on the provider having a well-established connection with its central depository for securities. Canada’s central depository, Canadian Depository for Securities Ltd. (CDS Ltd.) supports the smooth operation of the Canadian capital market, maintains a clear view to market changes, and provides market participants with the information they need. CIBC Mellon’s relationship with CDS goes beyond trade settlements, however: we collaborate with CDS to develop industry standards and introduce operational efficiencies in the capital markets that support our clients’ investment management needs. more »

Publication date: May 2011

IFRS: A changing landscape for Canada

The International Financial Reporting Standards (IFRS) were developed as a response to the growing need among companies and institutional investors worldwide for uniform standards around accounting, reporting and financial statement interpretation. As companies continue to expand their operations outside their home country, a common set of standards ensures consistency of information and empowers auditors, analysts and regulators with the transparency necessary to compare companies and make informed assessments. Founded on April 1, 2001, IFRS have quickly been adopted on every continent with new countries regularly coming on board. In early 2008, Canada’s Accounting Standards Board (AcSB) announced the implementation of IFRS. Since then, CIBC Mellon has been working closely with its clients to assess these changes and develop solutions that meet clients’ accounting and reporting needs during the transition and well into the future. more »

Publication date: April 2011

Basel III: Update and implications to Canadian investors

Across the globe, organizations are beginning to react to the new, more stringent regulations required as a result of Basel III. Firms in all sectors of the financial services  industry are looking closely at the new capital requirements and working to understand the impacts of the redefinition of capital and how best to achieve and maintain the minimum requirements. Canadian regulators, working closely with the Basel Committee and the Bank for International Settlements, are looking to Canadian financial institutions to act responsibly and continue making prudent decisions. CIBC Mellon continuously monitors the regulatory environment to respond effectively to the rapidly changing needs of clients. more »

Publication date: March 2011