On November 21, 2024, the Canadian Securities Administrators (CSA) released for public comment proposed amendments to Multilateral Instrument 13-102: System Fees, aimed at ensuring sustainable funding for the CSA's national systems, including SEDAR+ and the National Registration Database (NRD). The CSA stated that the proposed amendments are designed to better align system fee revenues with projected national system operating costs over the next five years.
Background and CSA rationale
The CSA's national systems play a critical role in facilitating securities regulation and market efficiency across Canada. However, according to the CSA, increasing operational costs—driven by rising IT labour expenses, technological advancements, and enhanced cybersecurity measures—necessitate in their view adjustments to the fee structure to maintain the integrity and functionality of these systems. The CSA quotes industry-wide trends that indicate IT labour costs have risen by 35 to 45 percent, alongside significant increases in technology and risk mitigation expenses.
Under the proposed plan, the CSA intends to implement a system fee increase phased over a five-year period beginning in late 2025. The proposed amendments ensure the funding model remains cost recovery based, without introducing new system fees or altering the flat-fee structure. Instead, existing fees will be proportionally increased to support the CSA's operational needs.
Key details of the proposed amendments
1. Initial fee adjustment (2025):
A 60% system fee increase will take effect in November 2025. According to the CSA, with this adjustment:
- For 95% of filing and registrant organizations, the increase will amount to less than CA$2,500 annually.
- For 85% of these organizations, the increase will be less than CA$1,000 annually.
2. Subsequent annual increases (2026–2029)
To ensure continued alignment with funding requirements, the CSA is proposing to increase system fees by 3% annually in each of the four years following the initial adjustment.
3. Equitable impact across market segments
Since system fees are calculated based on the type and number of filings submitted and the number of individual registrants, the CSA has stated that proportional increases will equitably affect all market participants.
Consultation process
The CSA has requested stakeholder input in shaping these proposed changes. A 90-day comment period, will conclude on February 19, 2025, and will provide an opportunity for market participants, organizations, and other stakeholders to share feedback. The full proposal and accompanying details are available on CSA member websites.
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