MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, September 17, 2009 Is a Canadian Fund Feud a Sign of Things to Come? An on-going feud between the Canadian mutual fund industry and provincial governments escalated on Tuesday. The Ontario government has taken the offensive in the current tête-à-tête over a proposed harmonization of taxes on mutual funds in Ontario and British Columbia. Fund executives have been especially vocal in their complaints against the new taxes, saying they will cost investors millions in extra fees. The managers' vocality has upset the Ontario government, who've now threatened to publicly release a document on the negative impact of management fees for investors if fundsters keep complaining. There are currently no taxes on mutual funds in any province, and the proposed "harmonized tax would mean an extra 8 per cent on management fees in Ontario and 7 per cent in British Columbia," the Globe and Mail reported. According to Canadian finance minister Dwight Duncan, the taxes will make businesses more competitive, as well as make fees more transparent for investors. “If we learned anything a year ago with the closing of Lehman Brothers, when issues of this nature aren't clear and transparent, problems happen,” Duncan told the Globe and Mail. Although there should be no direct effects on the American mutual fund industry, the issue of fees strikes close to home as American fundsters await the Supreme Court's take on the Oakmark Funds fee suits. Additionally, the U.S. government has made moves towards fee regulation themselves with three newly formed sub-committees devoted to examining "the needs of investors when they purchase specific products (mutual funds, hedge funds, money market funds) and services (brokerage, investment advisory, and financial planning).” The new committees include the investor as purchaser subcommittee, the investor as shareholder subcommittee and an investor education subcommittee. While both governments claim to be trying to help investors, fund companies in the neighboring nations don't like the purposed actions. Third parties have rushed to the aid of Oakmark in the forms of petitions to the Supreme Court, and Canadian firms are surely planning their next move. “They [the Ontario government] are nickel and diming people who are saving for their retirement," Lisa MacLeod, revenue critic for the Ontario Progressive Conservatives, told the Globe and Mail. "It's the wrong signal to send in tough economic times.” Printed from: MFWire.com/story.asp?s=22638 Copyright 2009, InvestmentWires, Inc. All Rights Reserved |