Trade Talk, June 2006

Table of Contents

In this issue...

When Global Investor magazine announced the results of their Global Custody survey in May, The Mellon Group - CIBC Mellon, ABN AMRO Mellon, and Mellon Global Securities Services – held the top spot.

CIBC Mellon has spent the last two years working with capital market participants and the CCMA to provide both support for and valuable input into the development of  a securities legislative framework for the more efficient and timely processing and settlement of institutional trades.

Capital markets in Canada and abroad have seen some fast times over the past two years, largely driven by strong commodity prices, very high rates of public offerings and elevated merger activity.  Strong financial markets lend themselves nicely to securities lending returns; while there are many drivers of underlying securities lending activity, we have highlighted the top three areas where our clients benefit the most.

Currency overlay is a recent concept in Canada but it has been widely used in Europe since the mid 80s. At its core, currency overlay strategies involve hedging the currency exposure created by a foreign investment through the use of a foreign exchange (FX) forward contract.

When CIBC Mellon began in 1996, we started with approximately two hundred employees and a market share, as measured by assets under administration of 10 per cent.  Since then, we’ve grown to become a leading provider of custody and trust services in the Canadian market; reaching 30 per cent market share (measured by assets under administration) with more than 1,400 employees today.

The strong run in the S&P/TSX has some harkening back to the ill-fated equities rally of the late 1990s. But the late 1990s rally was all about promised earnings to come, and rested on a very narrow base of telecom and tech stocks. This time more players are involved, and operating earnings have outpaced the market index.

Earlier this year, we asked clients what features and functionality CIBC Mellon could provide to help them meet their current and future reporting needs. We also discussed general portfolio strategies, and the direction they are likely to take in the next few years.

This issue by:

Terri Labrecque

Elizabeth Earle

Jeffrey Alexander

Zafar Bhatti

Thomas C. MacMillan

Avery Shenfeld

Andrew Grovestine

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Trade Talk® is provided for general information purposes only and CIBC Mellon Global Securities Services Company, CIBC Mellon Trust Company, CIBC, The Bank of New York Mellon Corporation and their affiliates make no representations or warranties as to its accuracy or completeness. Readers should be aware the content of this publication should not be regarded as legal, tax, accounting, investment, financial or other professional advice nor is it intended for such use.