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Investor Presentaiton

As with other areas of the financial products sector, industry concentration is relatively high. In December 2005, the ten biggest firms offering mutual funds in Canada managed nearly 78% of the total assets held in Canadian funds². There are 210 mutual funds grouped into 24 families in Québec. The province has 411 "brokerage advisory firms" employing over 28,000 sales reps who are registered in the securities field and authorized to work in this sector. About 21,000 of these specialize exclusively in mutual funds³. A number of factors explain the growing popularity of mutual funds, including the aging population, the increased number of well-to-do investors, and the greater number of actual funds available. 2.2. The major players The mutual funds industry is mainly composed of promoters (managers) and distributors. Banks and credit unions play the roles of both promoter and distributor. Consumers can buy mutual fund shares from financial advisors, mutual fund sales reps, lending institutions, financial planners, and securities brokers. Mutual funds involve several parties at different operational levels. Below is a list of the main players. " ◉ ☐ The fiduciary holds the securities that belong to the fund on behalf of the shareholders. The management company (or manager) often acts as a funds promoter. It sets up one or several funds, administers them, and markets them. The custodian is the fiduciary bank or company appointed by the management company to safeguard the securities held in the fund. The investment advisor is the professional financial manager appointed by the management company to direct the investments. The company often takes on the investment advisory role itself, in which case it makes all of the investment decisions, constantly monitors economic conditions, and modifies the investment allocation accordingly. The principal distributor coordinates the sale of the mutual fund shares to investors, either directly or through the network of registered securities dealers. 2 3 INVESTMENT FUNDS INSTITUTE OF CANADA, Table showing the relative position of members, December 2005. [online] [https://statistics/ificmembers.ca/English/reports/2005/12/public/relativepos.xls] (Consulted on March 1, 2006) AUTORITÉ DES MARCHÉS FINANCIERS, Mémoire préparé dans le cadre des travaux préliminaires (brief drafted during the preliminary work), p. 29 Consultation paper Page 4
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