RESEARCH

iTrust Institute was established to study the key features, risk minimizing practices, perceived potential & benefits of income trusts starting from the premise that:

The Institute tests this notion and explores related questions in a focused manner.

Objective Insight

Demand for income trusts is driven by institutional and retail investors who perceive that they provide superior rates of return relative to risk. Sophisticated private equity owners have used trust indentures for a long time and continue to use them with contractual law to structure their investments and secure returns.

Yet, along with interest in trusts, there is great concern about the because of growing public demand to participate in this flexible form of security. Tax policy questions remain too narrow in scope to provide meaningful measure of the lost or potential value to Canadians of income trusts. Misconceptions about income trust features, risks and benefits remain among members of the investing public, the financial community, media, regulatory bodies and government.

We provide a home for clear, thorough and fair exploration of key questions on a number of levels:
- Policy requirements including taxation;
- Business fundamentals;
- Ownership considerations;
- Market factors.

The iTrust Institute aims to assess income trust structures in the context of securities markets to gain and share insight into the unique characteristics and distinct potential for this form of equity to add economic value at all levels. For example, focus for inquiry can include:

1. The trust indenture can offer value to managers and investors by clarifying company policies and operating practices;
2. Cash distributions paid by companies have economic value in the form of tangible business information for investors as well as a useful priority for disciplined management;
3. The high frequency of cash distributions can reduce risk while hastening tangible returns to investors and the related economic multiplier effects;
4. Market liquidity has value at a number of levels;
5. Stable and real returns on trust investments provide the basis for growth in the national tax base.
6. When attracting capital in the market for new issues, mergers and acquisition and secondary issues, flow-through entities enable repatriation of Canadian business and employment, profitable cash flow and tax.
7. Trusts trigger useful discussion and development of financial policies, accounting standards, governance practices and market regulations that enhance returns for investors while ensuring the viability of these Canadian securities and local exchange in a highly competitive global financial market.

Independent & Inclusive Imperative

Income trusts and their markets have matured quickly in recent years. Questions remain, but also change, with evolution in the market. In effect, the distinction between trust structures, other equities and forms of securities might be reduced or disappear over time if only due to competition for low cost capital and the interplay of public misconceptions, corporate tradition, innovation and value.

We face the possibility that the overall market will continue to evolve to become more income-oriented & trustworthy, the specific shape of which we do not yet know. Independent on-going research is necessary. To this tend, we use an iterative process to probe, test, report findings, analyze, evaluate and review income trusts including such means as the following:
- undertake stakeholder surveys and interviews;
- coordinate third party research and literature reviews;
- host or participate in conferences & roundtable events;
- inform and engage market participants in dialogue.

We welcome work with stakeholders and experts from all sides of the market and society, intending as well to reach beyond the trust market into financial circles in general, involving those with knowledge in Canada and abroad. Findings in regard to income trusts and their role in a dynamic market and growing economy will offer value in the form of prescient market insight and intelligence for:
- investors;
- Canadian tax authorities;
- security issuers, directors, trustees and managers;
- market regulators and dealers;
- financial advisory firms and professionals;
- securities brokers, promoters and fund managers;
- investment analysts and bankers.

The iTrust Institute invites membership from stakeholders in Canadian markets & local constituents who desire economic growth