We would like to remind you that registered firms and unregistered capital markets participants must calculate their annual participation fee by December 1 every year, as prescribed by OSC Rule 13-502 Fees (Rule 13-502).
How to pay. Firms must complete and file Form 13-502F4 Capital Markets Participation Fee Calculation by December 1 through the OSC filing portal. Annual registration fees in other jurisdictions, if applicable to your firm, are automatically calculated on the National Registration Database (NRD) on December 1.
How much to pay. Participation fee revenue will be based on the portion of total revenue that can be attributed to Ontario for your firm’s fiscal year. For your firm’s 2015 calculation, you should calculate fees based on the firm’s financial year ending in 2015. The participation fee as calculated in Form 13-502F4 will be withdrawn from the firm’s NRD account on December 31. Ensure your NRD account has the necessary funds on December 31 to allow this withdrawal.
If you do not pay. Failure to pay the annual participation fee will result in automatic suspension of the firm and its individuals. Yes, you read that right – automatic suspension (if you are keen, see section 29 of the Ontario Securities Act).
During a recent OSC Registrant Outreach seminar, OSC staff highlighted changes to OSC Rule 13-502 Fees, which came into effect earlier this year.
These changes include:
- Removal of the use of the reference “fiscal year” (for 2015, all registrants and unregistered capital markets participants should calculate fees based on the firm’s financial year ending in 2015)
- Change in the definition of “capital markets activities” (meant to address the common error made by firms that deduct all non-Ontario revenues even if they are considered capital markets activities, and to reflect that investment fund managers (IFMs) are required to be registered)
- Change in the definition of “Ontario percentage” (meant to simplify and clarify the term by removing references to various tax legislation tied to its previous definition)
- Amendments to filing and payment deadline for unregistered IFMs (meant to align the fee calculation and payment time with registrants and exempt international firms)
- Requirement for the CCO (or person acting in a similar capacity, in the case of unregistered capital markets participants) to attest to completeness and accuracy of the Form 13-502F4 calculation
- Late fee amendments (including increase in late fee cap for all forms or documents to be filed from $5,000 to $10,000, for the three largest categories of registrants with Ontario revenues over $500M)
- No refunds (clarifies that, absent exceptional circumstances, the OSC will not issue a refund if the request is made later than 90 days after the fee was required to be paid)
- Indirect avoidance of Rule (clarifies the OSC’s views with respect to fee avoidance)
- Participation fee rates (will be kept at the 2014 level until 2016)