OSC maintains regulatory fees for next two years

By Staff | March 15, 2018 | Last updated on March 15, 2018
2 min read

Participation and activity fees will stay the same for the next two years, the OSC said Thursday.

Participation fees pay for regulatory services while the flat-rate activity fees cover the costs of reviewing regulatory documents. The rates for both will stay the same for the next two-year period beginning April 1.

Market participants fund the OSC through fees, which are evaluated roughly every three years. For the period from 2015-2018, capital market growth resulted in revenues 3% higher than projected and total costs came in 5% lower, the OSC said in a notice. But while it expects a “modest surplus” this year, the OSC anticipates annual deficits beginning in 2019 based on its capital market growth assumptions.

The commission will continue to make “critical investments in data and information systems, enforcement tools, facilities rehabilitation and other technology” without raising fees by drawing down on its cash position to fund the initiatives, a release said.

That cash position is “approximately 39% (four months) of total operating and capital expenditures and is expected to decline to 25% (three months) of total operating and capital expenditures by fiscal 2020,” the notice said.

Because fees make up 84% of the OSC’s total revenues and are tied to industry and general market growth, a market decline would mean revisiting fees if there isn’t an adequate reserve, the notice said.

OSC Notice 13-707 Fees under OSC Rule 13-502 Fees and OSC Rule 13-503 (Commodity Futures Act) Fees describes the rationale for maintaining existing rates.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.