**OT** BCE--NT---
OSC to Allow 25% Limit on Single-Stock Holdings by Index
Funds
By Dao Thu Hien
Toronto, Jan. 29 (Bloomberg) -- The Ontario Securities
Commission is willing to allow index investment funds to own as
much as 25 percent of any single company's stock, more than double
the current 10-percent constraint, the Globe and Mail reported,
citing a letter by Rebecca Cowdery, OSC manager of investment
funds to the Investment Funds Institute of Canada. Cowdery said
the temporary upper limit will be in place until the OSC finishes
and puts out for industry comment draft amendments, the Globe
reported, adding at least 19 big Canadian mutual funds invested
more than 20 percent of their assets in BCE Inc. and its
subsidiary Nortel Networks Corp., which preliminary calculations
show that BCE's spinoff could boost Nortel's weighting on the
Toronto Stock Exchange 300 Composite to 26 percent and its weight
on the S&P/TSE 60 to 36 percent. The OSC said the move is to
``permit any index mutual fund to follow its target index in
accordance with its stated investment objective,' although it is
reluctant to change limits for actively managed funds, the Globe
said.
With the recent surge in stocks, such as Nortel Networks
Corp., which accounts for 14.7 percent of the TSE 300, some index
fund managers said they can't match and beat the performance of
competing indexes if the holding limit is not removed. |
