One of the items that frequently vexes registered firms is keeping their “outside business activities” (“OBA”) disclosure up to date. The Ontario Securities Commission (“OSC”) regards OBA disclosure as an important means for registrants to monitor for conflicts of interest. What constitutes OBA is very broad and includes volunteer unpaid board positions or other “positions of influence”. Some registered firms send out internal reminders to individuals asking them to keep the firm’s compliance department up to date on OBA disclosure. The OBA disclosure, however, must be updated within 10 days of a change and failure to report updates on a timely basis will trigger late fees levied by the OSC of $100 per business day for the late filing of Form 33-109F5 which is used to amend the Form 33-109F4 (which contains OBA disclosure), subject to a maximum aggregate late fee of $5,000 for all documents required to be filed or delivered by a registered firm in a calendar year.
In order to enable registered firms to “catch up” with OBA filings, the OSC believes that late fee relief may be appropriate for certain filings of Form 33-109F5 related to previously existing OBAs.
The eligibility criteria and the late fee relief process, including the process for reporting a change to OBAs, are set out in the OSC Staff Notice 13-705 Reduced Late Fee For Certain Outside Business Activities Filings (the “Notice”).
The late fee relief application process is available to registered firms if the registered firm’s representatives:
- have amendments to item 10 of Form 33-109F4 relating to OBAs, and
- between October 16, 2014 and on or before March 27, 2015, submit a completed Form 33-109F5 via the National Registration Database to report each change to OBAs reported on item 10 of Form 33-109F4.
A registered firm that meets both of these criteria and other requirements in the Notice will be considered for a reduced late fee of $100 for each late notice of a change to OBAs.
Registrants have until March 27, 2015 to take advantage of this relief. Thereafter, the late fees for late OBA updates will accumulate at $100 per business day.