© Copyright 2000 Rogers Media. The following article first appeared in the September 2000 edition of BENEFITS CANADA magazine.

E-Poll

Do you believe high closing is a common practice among Canadian pension asset managers?

Vote at benefitscanada.com

The practice of high closing is rumoured to be quite common in the money management business. Typically, it involves late-day purchases of small stocks already held by the fund to boost the stock's market price at the end of a month or quarter, when asset managers report their performance numbers.

RT Capital Management Inc., following an investigation by the Ontario Securities Commission (OSC), admitted in July that it had engaged in the practice. The firm was fined and several employees (who've since resigned) had their trading privileges suspended and, in one case, revoked permanently.

This month's e-poll asked just how common the practice really is. Results suggest that industry observers do believe high closing is a fairly common practice. More than half (60%) believe high closing is common among Canadian pension asset managers, while 31% believe it is not. Nine per cent of respondents say they don't know how common the practice is.

"In terms of how widespread [high closing is], it's mostly just rumour," says Lew Johnson, professor of finance at Queen's School of Business in Kingston, Ont.

Institutional money managers are reluctant to comment publicly on the matter. One money manager who didn't want to be named told benefits canada it's impossible for anyone besides the OSC to know how common the practice is. "Anyone who tells you they do is either lying or guessing," he says.

Michael Wilson, the new president and chairman of RT Capital, agrees. He tells benefits canada that it's not possible for anyone to make generalizations about high closing one way or the other (see "The stabilizing element," page 29).

"I suspect they [regulators] will find more [cases of high closing]," says Johnson. "I wouldn't be surprised if they did find more. I'd be somewhat surprised if they didn't."

The Romanow Commission has released its final report on the future of healthcare in Canada.

For Commissioner Romanow's recommendations, click here.

Click here for Senator Michael Kirby's report, "The Health of Canadians – The Federal Role: Recommendations for Reform."