FFH delisting from NYSE

[Daphne]

Fairfax Voluntarily Delisting From NYSE

 

Marketwire

 

Fairfax Financial Holdings Limited

 

November 19, 2009 - 05:02:19 PM

 

Fairfax Voluntarily Delisting From NYSE

 

TORONTO, ONTARIO--(Marketwire - Nov. 19, 2009) - Fairfax Financial Holdings Limited (TSX:FFH)(NYSE:FFH) announced today its intention to voluntarily delist its subordinate voting shares from the New York Stock Exchange (NYSE).

 

After the delisting from the NYSE, Fairfax's subordinate voting shares will continue to be listed on the Toronto Stock Exchange (TSX), where they will be traded in both Canadian and U.S. dollars under the trading symbols FFH and FFH.U, respectively.

 

"After our recent privatization of Odyssey Re, Fairfax now wholly owns all of its primary businesses and is the largest property and casualty insurance company based in Canada, with worldwide operations in over 50 countries," said Prem Watsa, Chairman and CEO. "While our decentralized operations have global reach, after reviewing the factors relevant to our continued listing on the NYSE, we determined that our company and its shareholders will be better served by the simplified focus and lower cost resulting from the maintenance of only our original TSX listing. In recent years, as markets have become significantly more global and liquid, our constituents, including shareholders and employees, no longer require multiple listings. The voluntary delisting will have no impact on our ongoing strategic and operating philosophy nor on our very substantial presence in the United States and our presence in the other global markets in which we operate."

 

In accordance with the procedures established by the U.S. Securities and Exchange Commission (SEC), Fairfax will file a Form 25 with the SEC on or about November 30, 2009 to effect the delisting, and the delisting is expected to be effective ten days thereafter, on or about December 10, 2009. The delisting will not affect Fairfax's continuing obligation to file required reports with the SEC.

 

Fairfax Financial Holdings Limited is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

 

FOR FURTHER INFORMATION PLEASE CONTACT:

 

Fairfax Financial Holdings Limited Greg Taylor Chief Financial Officer (416) 367-4941

 

Media Contact Fairfax Financial Holdings Limited Paul Rivett Chief Legal Officer (416) 367-4941

[Parsad]

I think that is a good move.  Cost savings, less regulatory headache and shorts can suck it!  Cheers!

[KFRCanuk]

I think that is a good move.  Cost savings, less regulatory headache and shorts can suck it!  Cheers!

 

Wow... Does this mean no more 13-f? I'm sad about that.

 

I wonder if they will be able to quantify the $ savings from this. I'd imagine all the fillings, accounting, NYSE listing fee's, SOX compliance probably add up to a lot of money.

 

Without knowing anything about these costs. I bet the savings will be several million a year.

[Guest Broxburnboy]

Bravo!

 

There is more to this than meets the eye, and must have something to do with how Wall Street abused the stock and SEC refused to enforce the rules... This may be the first of many delistings as Wall Street, NYSE and SEC are further exposed as the manipulators they always have been.

[FFHWatcher]

Trade on the TSX in Cdn$ and US$ ?  Cool.

That is the first time I have heard that option.  Sounds cool at first glance.

Shorts are ok. FFH does it to others.

Naked shorts and short and then distort/issue a negative public analysis and hire underhanded, illegal, immoral, and unethical people to drive down the share price...no love there  >:(

 

Hmmmm?  What about the options?

[ubuy2wron]

Will the options eventually cease to be traded as well on US exchanges. I do not currently have a position but I have enjoyed profits on leaps in the past.

[Partner24]

"shorts can suck it"

 

I have nothing to add, except for that I wonder if we would not get the quarterly holdings anymore...

[hyten1]

guys so what does this mean i own shares under FFH:NYSE

 

 

[hyten1]

am i force to sell because of the delisting from nyse

[Myth465]

15% of my holdings are in FFH options, I definitely want to know what happens next.

[Parsad]

Guys,

 

A few answers to your questions:

 

First, a 13-f filing is required by anyone who owns $100M or more of U.S. equities.  So a 13-f will continue to be filed, unless Fairfax decides not to own any U.S. equities.

 

Second, the transition from the NYSE to TSX will be seamless.  When you put in an order, your broker will simply buy either U.S. or CDN denominated shares of Fairfax based on what you desire.  The US dollar stock will be available on the TSX from Monday, and FFH will be delisted from the NYSE on December 10th.

 

Third, NYSE exchange positions will be closed out, but anyone who has an outstanding short position will still have to meet that obligation they have, since they borrowed the stock.  They can buy the stock on the TSX if required.

 

Fourth, regarding your NYSE call options, it is best to contact your broker and get details on that.  Cheers!  

[hyten1]

sorry i am still confused

 

i am a us resident and i buy/sell stock using a discount broker, i can only buy/sell us equities from this discount broker (td ameritrade)

 

does this mean i am force to sell?

[Packer16]

Will the NYSE shares be converted to ADRs like other Canadian securities?  Since you cannot hold foreign (non-ADR) securities in an IRA, will the securities be automatically converted?

 

Packer

[rogermunibond]

I imagine a market maker or dealer will trade FFH on the OTCBB for those who cannot access the TSE.

[Cardboard]

I would think that all Fairfax U.S. options will have to be closed out. Since the security for these derivatives is no longer "deliverable" on a U.S. exchange, the clearing process likely stops to work.

 

It is also unfortunate if U.S. holders will be forced to sell due to IRA rules. We do not have such restriction in Canada for RRSP, LIRA and others where we can hold securities listed on U.S. exchanges and even U.S. options.

 

I applaud the idea of cost savings, but IMO we are going a bit backwards. On average, volume on the NYSE was higher than in Toronto. Actually, I would be curious to know at this point the number of Fairfax holders being American vs Canadian.

 

We were also getting a lot of coverage from U.S. investment firms and things such as Motley Fool which were the result of being listed in the United States. Have you ever seen anything in the U.S. on Onex or Power Corporation? It is true that this "coverage" was mostly negative in the past, but has turned very positive ever since the CDS gains. Fairfax was gaining followers and investors down there with each day going by and this process will slow down dramatically without our presence on the NYSE. It will be interesting to see if firms such as JP Morgan will continue covering the company and attending conference calls.

 

Why not delisting on the TSX instead to realize cost savings? Similar savings, no restriction for investors that I can think of and still access to the largest capital market in the world.

 

Cardboard

[bargainman]

Second, the transition from the NYSE to TSX will be seamless.  When you put in an order, your broker will simply buy either U.S. or CDN denominated shares of Fairfax based on what you desire.  The US dollar stock will be available on the TSX from Monday, and FFH will be delisted from the NYSE on December 10th.

 

Third, NYSE exchange positions will be closed out, but anyone who has an outstanding short position will still have to meet that obligation they have, since they borrowed the stock.  They can buy the stock on the TSX if required.

 

Ummm.. what does this mean?  Will the FFH I hold in my US account be force sold leaving me with a big tax bill?

[Smazz]

sorry i am still confused

 

i am a us resident and i buy/sell stock using a discount broker, i can only buy/sell us equities from this discount broker (td ameritrade)

 

does this mean i am force to sell?

I have to believe that you will be able to hold it in a CAD account through TD ameritrade.

[hyten1]

my us td ameritrade account doesnt allow us to buy/sell canadian stocks not trading in the us exchanges

 

man this sucks, unless an adr or something is available i would be force to sell

[Uccmal]

I agree... it sucks.  Anyway, I have been looking into options/leaps handling. 

 

There are a couple of possibilities: 

1) Someone will start an ADR on NYSE and the Leaps will continue to be assigned to this.  An example if RBS - plc.  You can buy American options on the ADR.  I think this is unlikely for FFH since it is simply too illiquid.

 

2) Existing options will be honoured to the TSX listed security with appropriate currency conversions.  No more will be written

 

3) The exchange (presumably the CBOE) will settle the options and close the position.

 

I most hope for number 2 since I have over 20 Jan 2011 Leaps and was expecting FFh to go up by quite a bit before then.  I cannot afford to convert them all to stock.  Anyway, I will be calling my borker tomorrow. 

 

A.

[Packer16]

Given the level of trading an ADR may be available but it may be illiquid

 

Packer

[FlyingArrow]

I agree... it sucks.  Anyway, I have been looking into options/leaps handling. 

 

There are a couple of possibilities: 

1) Someone will start an ADR on NYSE and the Leaps will continue to be assigned to this.  An example if RBS - plc.  You can buy American options on the ADR.  I think this is unlikely for FFH since it is simply too illiquid.

 

2) Existing options will be honoured to the TSX listed security with appropriate currency conversions.  No more will be written

 

3) The exchange (presumably the CBOE) will settle the options and close the position.

 

I most hope for number 2 since I have over 20 Jan 2011 Leaps and was expecting FFh to go up by quite a bit before then.  I cannot afford to convert them all to stock.  Anyway, I will be calling my borker tomorrow. 

 

A.

 

Al, please let us know what you find. I'm in meetings all day tomorrow until late afternoon. I too have a very large number of 2011's I was expecting to hold. They are deep in the money and I damn well don't want a tax bill on them this year. Nor could I convert them entirely to common at this time.

 

I have to believe they are doing this ultimately in the long term interests of their long term shareholders of which I am one. The SEC and it's family of crooks who pervasively exploit NYSE listed stocks has been no friend of ours. But if this attracts a short term tax hit I really wish they would have waited till the new year....

 

 

[ERICOPOLY]

I imagine a market maker or dealer will trade FFH on the OTCBB for those who cannot access the TSE.

 

 

That's what happened with NB.  I owned it via the ticker NBFCF.

[ERICOPOLY]

Since you cannot hold foreign (non-ADR) securities in an IRA

 

I have some good news for you there:

 

I held my NBFCF (Northbridge) shares in my IRA -- traded over the counter.

 

I currently hold SFKUF (SFK.UN) in my IRA -- again, over the counter.

[ERICOPOLY]

I'm not going to be able to use my FFH as margin equity if I take delivery on the 2011 calls, now that it is going to be a "foreign" listed stock.

 

In order to preserve my margin borrowing capacity I'll need to take delivery of FFH and then move the shares to an account in Canada I assume?  Any tips on best/reasonable Canadian brokerage?

 

[ERICOPOLY]

2) Existing options will be honoured to the TSX listed security with appropriate currency conversions.  No more will be written

 

I take it the new TSX USD denominated version of FFH can be used for this, so no currency conversions needed.