FAIR Canada met in Montreal on May 26, 2009 with 11 senior members of the Coalition for the Protection of Investors.  The two organizations decided to work together on some of the key issues described below.  Coalition co-founder and spokesman Robert Pouliot has since joined the FAIR Board of Directors.  The list of participants can be found at the end of this report.

Origins and Focus of the Coalition

Following the Norbourg and Portus hedge fund scandals, a group of prominent consultants, academics, (mostly retired) investment and finance executives and retired politicians from all major parties in Quebec came together informally in October, 2006.  They shared a common goal of improving the protection of investors in a fast-changing financial world.

The Coalition is self-funded and concentrates on intervening at the institutional level with regulators, legislators, and professional associations. Members of the Coalition also engage in educating the public about financial and pension issues.

The Coalition focuses on lobbying for investor rights and frequently partners with other groups, especially pensioners.  At a recent submission to a House of Commons committee the Coalition received the backing of organizations with 1.8 million members.

Other organizations linked to or allied with the Coalition

MÉDAC, Mouvement d’éducation et de défense des actionnaires, now has 2,000 members paying annual dues of $35 each. MÉDAC focuses on corporate governance and was instrumental in pushing “say on pay” resolutions at the annual meetings of major Canadian publicly-traded companies. The President of MÉDAC, Claude Béland, is also one of the two official spokespersons of the Coalition.

GIREF, Groupe Internationale de Recherche en Éthique Financière et Fiduciaire, provides objective, independent research on ethical issues, governance questions and fiduciary responsibility.  It has affiliations with universities in Canada, France and the UK.

FidRisk is a joint program of a group of pension fund sponsors and endowment funds for an independent assessment of investment managers, affiliated with investment consultant Morneau Sobeco.  Starting this summer, Fid-Risk will provide voluntary measures of fund managers based on objective principles and international best practices.

Indemnity Fund – the Coalition’s Highest Priority

The Coalition has devoted much time and effort to advancing the idea of an industry wide, inclusive indemnity fund.  The following is a summary of the Coalition’s thoughts on an indemnity fund. Click here to read more on Indemnity Fund.

Other important Coalition goals

Create a national institute of saving and investment to monitor trends and capital flows across the country. The current debate about the state of savings has no ability to reach consensus, and Statscan’s figures are too vague.

The savings and investment institute would unite representatives of governments, regulators, financial service firms, non-profit agencies, investor advocates and labour unions to come up with agreed figures.  The observatory would also measure regional variations and the situation of groups with special needs – single parent families, handicapped citizens, old age citizens, young couples, and others.

Stronger custodians protecting investors. Restructure the model of all managed funds to greatly strengthen the powers of the custodian along European lines.  Supplement the Investment Review Committee role in mutual funds to give the IRCs a broader mandate and some teeth.

Mandatory fiduciary benchmarking of managers. Roll out the Fid-Risk program to assess investment managers.  The program will start off on a voluntary basis; the backing of its large pension and endowment sponsors should aid its penetration.  Eventually the Coalition hopes to make this program mandatory, with an annual review of all asset classes.

Participants in the meeting

Ermanno Pascutto, Executive Director, and Steve Garmaise, Associate Director of FAIR Canada met with the following members of the Coalition for the Protection of Investors:

• Robert Pouliot – see separate bio on the website.
• Reynald N Harpin, CFA.  Member of a dozen pension committees and former Chief Pension Investment Officer of Alcan.
• Andrée De Serres, founding co-director of GIREF.  Head of MBA corporate finance program, Quebec University in Montreal, founder of MBA financial services with the Canadian Bankers Institute.
• Michel Roux, founding co-director of the GIREF. Dean of the Business School of Paris 13, former investment banker.
• Claude Béland, President of MÉDAC- Mouvement d’éducation et de défense des actionnaires.  Former President and CEO of the Caisse Desjardins, the largest financial institution in Quebec.
• Yves Bonneau, editor of all French publications of Rogers on pensions and investment advice.
• Claude Castonguay, former banker and former Quebec Cabinet minister – he created the health insurance program.
• René Delsane, actuary, former investment management consultant at AON.  Member of several pension fund committees.
• Michel Toupin, formerly of Quebec Ministry of Finance and Caisse de Depot, managing director of asset management of Laval University pension funds and member of 10 other pension fund committees.
• Manon St-Cyr, financial planner, President, Association of Independent Financial Planners.
• Rosaire Couturier is the former president of the Canadian institute of Bankers, professor of finance at Laval University, and consultant to several financial; regulators in the Gulf area (Saudi Arabia and Qatar)

Coalition members who sent regrets, were unable to attend the meeting:

• Bernard Landry, former premier of Quebec, lawyer,professor of international trade, UQAM.
• Jean-Luc Landry, head of Landry-Marin, an asset management firm, and former head of Montrustco Bolton Tremblay.
• Jean-François Bernier, lawyer, managing director of Interactive Brokers in Montreal, ex-Commission des valeurs mobilières du Québec in charge of derivatives, professor of securities markets at Sherbrooke University
• Yves Séguin, former Quebec Finance and Revenue minister, President, SNCO, lawyer and chartered accountant