On behalf of the Board I would like to wish everyone a healthy, prosperous and happy 2003. 2002 was a difficult year for many in our industry. Let us hope the new year has better things in store for us.

I'd like to thank the 350+ members who attended our annual Christmas Party at the Park Hyatt. I think Judy did a fantastic job planning the event. It was nice to see so many familiar faces enjoying the festivities.

I would like to express a special thank you to everyone for being so generous in the purchase of 50/50 Raffle tickets. We managed to raise $4900 for The Bay Street Children's Foundation. For those of you who missed it, the winners were as follows:

1st: Karin Furlong, Nesbitt
2nd Naresh Tejpal, Scotia
3rd Michelle DaCosta (yes me, no fix, but just in case you were concerned, I donated it back)

The IETA Christmas Party 2002 was generously sponsored by: BMO Nesbitt Burns Inc., Canaccord Capital Corp., Commission Direct Inc., CS First Boston Securities Canada Inc., Dundee Securities Corp., E*Trade Institutional Securities Canada, First Energy Capital Corp., Griffiths McBurney & Partners, Goldman, Sachs & Co., ITG Canada Corp., Merrill Lynch Canada Inc., National Bank Financial, Paradigm Capital Inc., RBC Capital Markets, Raymond James Ltd., Research Capital Corporation, Scotia Capital Inc., Sprott Securities Inc., State Street Global Markets Canada Inc., TD Newcrest Inc., and Yorkton Securities Inc.

We "kick off" the new year with a number of events - Bowling and the Vendor Fair in February, and an Educational Seminar in late March. Please check Dates To Remember below or the IETA website for frequent updates.

As always, we look forward to any feedback or suggestions you may have.

Michelle DaCosta, President, IETA (of Toronto)
416-365-2427
mdacosta@dynamic.ca

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If any of you have been receiving money laundering emails from Zaire, Nigeria, etc., etc., or anywhere, you may want to forward them on directly to the RCMP at the following email address: wafl@phonebusters.com.

Carol Banahan
Director
416-730-5326
carol_banahan@otpp.com

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The IETA held a “panel discussion” on Corporate Governance at the TSX on September 16th. We were fortunate to have some very high profile panelists participating, Claude Lamoureux, Purdy Crawford and Barbara Stymiest. This panel was moderated by Bill McKenzie.

It was an interesting discussion that took place. It was very interactive with each panelist posing questions to each other in addition to the moderator. Purdy and Claude were also able to bring quite a lot of humour to an otherwise very serious topic. We were updated on all the latest developments going on in boardrooms, with large shareholders and the updates with Purdy’s involvement with the 5 year review.

Thanks again to everyone who helped to organize this evening.

Carol Banahan
Director
416-730-5326
carol_banahan@otpp.com

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On Thursday October 3rd, TSX Markets hosted a Best Execution Conference in order to address and raise the profile of this complex topic. Given the recently published Trade Management Guidelines by AIMR the conference drew a capacity crowd.

Following an introduction by Richard Nesbitt of the TSX, Wayne Wagnor of the Plexus Group outlined the key concepts of Best Execution. Mr Wagnor stressed that best execution should not be confused with lowest commissions, cheapest execution, best price available or beating the volume weighted average price. Best execution should be defined as a process to achieve the best investment results, not the lowest costs, and results must be continually evaluated in order to derive and document solutions.

The next speaker, Anath Madhaven of ITG, approached the topic in terms of practical applications. Mr Madhaven emphasized the importance of evaluating execution costs and their measurement. While explicit costs such as commissions, ticket charges, applicable taxes are straightforward to measure, the implicit costs such as delay costs, timing gains or losses, market impact and opportunity costs can be difficult to quantify. Post trade analysis requires the selection of an appropriate benchmark in order to measure the execution against. Mr. Madhaven argued that using a VWAP benchmark may not always be appropriate since it encourages traders to parcel out trades over longer periods and leads to missing the opportunity to obtain alpha. Proper communication between traders and PM's in essential to improve trading strategy and performance.

Tom Kain of TD Asset Management spoke on the role of technology in the best execution process. Mr. Kain stressed the importance of the efficient movement of orders from the PM's idea stage to execution and how delays in this process increase the risk of opportunity costs. Tom stressed the importance of collecting trade data and measuring costs as a key to streamlining the process.

Gregory King of CDP Global Asset Management spoke on the need to reconcile research commitments with best execution. He outlined the natural conflict between paying brokers for research and ensuring best execution obligations are followed. In some circumstances, unbundling research from commissions as an alternative was suggested. Mr. King summarized that a broker evaluation process is necessary to help identify conflicts where execution quality could be compromised.

The Keynote speaker of the afternoon was Dr. Benn Steil who shook up the audience with his remarks on the compatibility of best execution and institutional brokerages. His conclusion, brokers do not add value (yes, I know . . . ). For complete details of Dr. Steil's presentation, log onto our website at http://www.ietatoronto.org. With that behind us, it was time to move into cocktail hour.

John Paul Matthews
416-974-2216
johnpaul.matthews@rbc.com

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Recently members of the Boards of the IETA/CSTA met with Randee Pavalow and other staff members of the OSC to discuss rules, penalties, and infractions sanctioned by the O.S.C., as well as other topics under review by the board. A full report on the minutes of this meeting will be forthcoming. In the interim, we encourage our members to refer to both the following websites for further information and clarification on our industry rules, and recent sanctions by the OSC, as well as updates to UMIR by the RS Inc. www.regulationservices.com and www.osc.gov.on.ca

James R. Beattie, CFA
Director
Institutional Equity Trader
Capital Markets Services
416-842-6000
james.beattie@rbccm.com

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The Bay Street Children's Foundation is a non-profit foundation dedicated to improving the quality of life for children in need. Through donations, sponsorships and fundraising events The Bay Street Children's Foundation will distribute funds to qualified children's charities and non-profit organizations.

The Foundation will host a wide range of events this year focused on the Bay Street community. Events to be held are a Celebrity Pro-Baseball tournament, an Old Timers hockey game and 50/50 raffles.

The Board of Directors is composed of seven dynamic individuals within the Bay Street community:

James Duncan, VP International Trading, (416) 869-3381
Peggy Bowie, Equity Trader, (416) 926-5462
Tony Oram, Equity Trader, (416) 352-4620
Diane Peto, Manager, Equity Trading, (416) 369-2413
John Kerrigan, Institutional Equity Trader, (416) 359-4149
Michelle DaCosta, Equity Trader, (416) 365-2427
Jackie Walker, Equity Trader, (416) 842-6000

If you would like to provide any input on worthy children's charities or to volunteer your time to help out with the Foundation's events, please feel free to contact myself or any of the above Board members.

James Duncan
416-869-3381
james_duncan@canaccord.com

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All IETA members are invited to attend GL Trade Canada’s “Official Canadian Launch” cocktail party on January 30, 2003 from 5-9 p.m. at Cha Cha Cha’s, 11 Duncan Street.

Please RSVP Dan Mulcahy @ 416-582-2338, or dmulcahy@gltrade.ca

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Calling all bowlers...from king pins to gutter magnets...the IETA welcomes everyone who wishes to test their skills against their colleagues in a friendly competition at our Annual Charity Bowling Tournament. This event always proves to be memorable with much laughter and "cheer". More importantly the event raises mucho funds for our selected charities.

Let's see if last year's winners, TD Newcrest, can hold onto their title.

So please be on the lookout for the invitation form that will be available on http://www.ietatoronto.org in the near future and submit your teams. Due to the limited number of spots available teams will be accepted on a "first come first served" basis.

Judy Nishimura
Director
416-308-4743
judy.nishimura@tdam.com

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Please join us from 12 noon to 9 p.m. at the DESIGN EXCHANGE, 234 Bay Street, 2nd Floor, Toronto.

We strongly encourage all IETA members to invite their IT, telecom and business representatives to come and see the new and innovative products/services being showcased at the 2003 Winter Vendor Fair as they represent a peek of what's on the horizon. The participating vendors include companies from diverse businesses such as: research, risk management, phone systems, exchanges, trading software, direct execution providers and many more.

So far, the 2003 Winter Vendor Fair Participants include Archipelago, Belzberg, Bloomberg, E*Trade, GL Trade, Instinet, IPC, ITG Canada, KTG Technologies, MacGregor, NASDAQ, Reuters, and TSX.

We hope to see you at the 2003 Winter Vendor Fair; it promises to be a very exciting event. If you are thinking of participating, please contact us as soon as possible because spots are filling up fast and availability is limited !

For further information, please contact Nicholas Thadaney at 416-874-0737 or James Duncan at 416-869-3844

This event is being jointly organized by the IETA and CSTA. For further information regarding all current industry news, issues, and upcoming events, please log on to http://www.ietatoronto.org

Nicholas Thadaney
Director
416-874-0737
nthadane@itgcan.com

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For the IETA membership we can get a block of 50 to 60 tickets for the Lacrosse game for approximately $25.00 each -- this will be a fun evening !! I saw them last year and it was very entertaining. If there is an interest, please e-mail me. Tickets will be available on a "first come first served" basis.

Larry Conn
Director
416-947-8699
larry_conn@guardiancapital.com

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On December 4, 2002, Market Regulation Services Inc. issued the attached "RS Notice" requesting comments on a proposal to exempt trades pursuant to market maker obligations from the payment of the Regulation Fee. In order to ensure that all Participants are given an opportunity to comment on this proposal, the deadline for making submissions has been extended to Friday, January 17, 2003.

(See attached file: RS Notice Proposal to Exempt Trades Pursuant to Market Maker.pdf)

e-mail: james.twiss@regulationservices.com

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Nasdaq “Double Header” Toronto – Wednesday, January 15, 2003
Nasdaq “Double Header” Montreal – Thursday, January 16, 2003
GL Trade Official Launch – Thursday, January 30, 2003
IETA Charity Bowling – Thursday, February 6, 2003
IETA/CSTA Vendor Fair – Thursday, February 13, 2003
STANY Conference – April 11-13, 2003
STA Congressional Conference – May 7-10, 2003 in Washington
CSTA Annual Conference – August 21 – 24, 2003 in Whistler, B.C.


 

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Congratulations and best wishes to the following individuals who have recently made moves:

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For further information regarding all current industry news, issues, and upcoming events, please log on to www.ietatoronto.org