The Form 13-502F4 Capital Markets Participation Fee
Calculation (F4) must be filed on December 1
each year by all registered firms, unregistered investment fund
managers, and firms operating under the exemptions available in
sections 8.18 and 8.26 of NI 31-103 Registration Requirements,
Exemptions and Ongoing Registrant Obligations. This form
is used to calculate your firm's annual fee, which is based on
revenues earned through your firm's capital market activities
For the first time, Staff of the Compliance and Registrant
Regulation Branch (CRR Staff) of the OSC reviewed
a number of Form 13-502F4 Capital Markets Participation Fee
Calculation filings submitted in 2012, to ensure they had been
completed correctly. CRR Staff reviewed almost 500 filings
and found that firms had incorrectly calculated their Ontario
revenues for a variety of reasons. Some of the errors found
include the following:
On Line 1 of the F4, firms are required to use their gross
global revenues for the firm, as reported on their audited annual
financial statements. Firms were found to include only their
Ontario gross revenues on Line 1, when the firm had other revenue
On Line 2 of the F4, firms are required to include deductions
for activities not earned through their global capital markets
activities. Firms were deducting revenues earned that were
attributable to capital markets activities outside Ontario.
Firms are required to report the percentage of revenues earned
from their clients in Ontario. Some firms were using the
number of clients in Ontario in comparison to the number of clients
outside Ontario for determining their Ontario percentage. In
other cases, firms having the same fiscal and taxation year end,
were found to have included an Ontario percentage that was
significantly different than the firm's Ontario corporate
income tax return.
CRR Staff reminded firms, required to file the F4, that it is
important that they have the UDP and CFO sign the F4. Firms
should also ensure these forms are readily available in the event
they are requested by the OSC, as they intend to review the
F4 filings on a more regular basis.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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