Last month, the Ontario Securities Commission published its
final amendments to OSC Rule 13-502 Fees and Companion Policy 13-502CP
Fees. These amendments are largely consistent with materials
published for public comment on August 23, 2012, but incorporate a
number of changes made in response to concerns communicated during
the comment process. Assuming Ministerial approval, the amendments
will come into force on April 1, 2013.
Purpose of the amendments
In order to remain financially stable, achieve cost recovery by
2016, and be able to achieve its mandate, the OSC is raising its
fees as set out in the amendments. The OSC, which is dependent on
fees from market participants, is currently projecting to operate
at a deficit of $10.7 million in 2012/2013. The fee rates it set in
2010 were structured with a regard for market participants facing a
challenging market period, and were anticipated to be insufficient
to fully recover the OSC's projected costs. The OSC considers
the fee increases necessary to address the current operating
deficit and return the OSC to cost recovery. Furthermore, it plans
to allocate part of the increased fee revenues towards new costs
associated with meeting evolving regulatory responsibilities and
improving its capacity to keep up with market developments,
innovation, and investor concerns.
Summary of the amendments
The amendments are largely consistent with the current
framework, but make changes so that the fees charged by the OSC are
aligned more closely with actual costs. New activity and
participation fees are imposed in areas where workload has
increased and more resources are being targeted.
Participation fees are based on the cost of a range of
regulatory services that cannot practically be attributed to
individual entities or activities. These fees will continue to be
set using a tiered structure, with reporting issuer fees varying by
average market capitalization in a fiscal year and registrant fees
varying by the registrant's annual Ontario revenues. However,
the final amendments raise the participation fees for reporting
issuers by approximately 11.65% as of April 2013, with subsequent
11.65% increases in April of 2014 and 2015. The final amendments
also raise the participation fees for registrants approximately
4.7%, with subsequent 4.7% increases in April of 2014 and 2015.
This is a marked decrease from the August 2012 proposals, which
proposed increases of 15.5% per year and 7.9% per year,
respectively. The final amendments also provide for two additional
categories of participation fees: fees for specified regulated
entities (such as exchanges and clearing agencies) and fees for
designated rating organizations.
The British Columbia Court of Appeal has recently considered whether the doctrine of unconscionability can be invoked to set aside a contractual clause providing for the payment by one party to the other...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).