Northern reports on application for stay and risk adjusted capital
issues, and updates shareholders on progress in replacing the
carrying broker for Northern Securities
TORONTO,
Nov. 26, 2012 /CNW/ - Northern
Financial Corporation (TSXV: NFC) ("Northern Financial" or
the "Company") announced that its wholly-owned subsidiary,
Northern Securities Inc. ("NSI") and NSI's Chief Executive
Officer, former Chief Compliance Officer, and former Chief
Financial Officer were granted an interim stay by the Ontario
Securities Commission ("Commission") regarding all sanctions
and penalties imposed by the Hearing Panel of IIROC in its decision
dated November 10, 2012. The interim
stay will continue until December 18,
2012 or further order of the Commission. The stay motion was
otherwise adjourned to December 17,
2012 to set a date for the hearing of the stay motion. NSI
has applied for a stay until the date of the Commission's decision
on the appeal of the Hearing Panel's decision. If an
extension of the stay is not granted, the sanctions and penalties
imposed by IIROC will become enforceable, and trading of the
Company's shares on the TSX Venture Exchange may become halted.
On November 20,
2012, at the request of IIROC, NSI filed a calculation of
its risk adjusted capital or regulatory capital ("RAC"),
which was positive. Although not requested by IIROC, NSI also
included in its filing RAC estimates for the weeks ended
November 2 and 9, which reported a
deficiency of $11,000 and
$3,000, respectively. Based on
the accounting for RAC employed by NSI, NSI had believed that its
RAC for each of the weeks mentioned was positive.
Nonetheless, NSI currently has positive RAC, has raised additional
capital and intends to raise further capital to account for reduced
revenues in the continuing negative macro market that has impacted
securities firms in the industry, including NSI. NSI is
currently working cooperatively with IIROC to ensure that IIROC's
reporting requirements and restrictions are properly complied
with.
Further to the Company's press release dated
November 14, 2012, NSI continues to
seek alternative arrangements in order to replace Penson Financial
Services Canada as NSI's carrying broker. NSI has been in active
discussions with a number of other carrying brokers and
self-clearing firms that could provide NSI with clearing,
settlement, and custodian services. The Company believes it is
likely that NSI will enter into an arrangement with a self-clearing
firm or a carrying broker to replace Penson by Penson's desired
date for termination of its services, which is December 31, 2012, or such later date that may be
agreed upon by Penson and NSI. In the unlikely event that NSI
is not able reach a suitable arrangement with another firm prior to
the date agreed upon with Penson, NSI may seek an order from the
courts to require Penson to provide 180 days notice of its decision
to exit the clearing business in Canada or NSI would continue with its capital
markets business and may be restricted in its ability to process
trades for its retail and institutional clients. NSI's
position is that Penson was required to give NSI 180 days' notice
(not 90 days' notice as given by Penson); however, NSI and Penson
are currently acting cooperatively in pursuing an alternative
arrangement by the earliest date possible.
About Northern Financial Corporation
Northern Financial Corporation wholly owns
Northern Securities Inc., a full service investment dealer that
provides financial advisory services to retail and institutional
clients and investment banking services to small capitalization
companies.
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this news release.
This press release may contain forward-looking statements with
respect to the Company, its operations, strategy, financial
performance and condition. These statements generally can be
identified by use of forward looking words such as "may", "will",
"expect", "estimate", "anticipate", intends", "believe" or
"continue" or the negative thereof or similar variations. The
actual results and performance of the Company discussed herein
could differ materially from those expressed or implied by such
statements. Such statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
Important factors that could cause actual results to differ
materially from expectations include, among other things, general
economic and market factors, competition, changes in government
regulations and the factors described under "Risk Factors" in the
Management's Discussion and Analysis and Filing Statement of the
Company which are available at www.sedar.com. The cautionary
statements qualify all forward-looking statements attributable to
the Company and persons acting on their behalf. Unless otherwise
stated, all forward-looking statements speak only as of the date of
this press release and the Company has no obligation to update such
statements.
SOURCE Northern Financial Corporation