The OSC yesterday published for comment proposed amendments to its rules that set out the fees to be paid by market participants. The proposed amendments involve changes to the calculation of participation fees, which apply to reporting issuers, registrants, certain unregistered capital market participants, specified regulated entities and designated rating organizations, and are meant to reflect a market participant’s use of the Ontario capital markets, as well as changes to certain activity fees, which are generally charged when a document of a designated class is filed, under OSC Rule 13-502 Fees and OSC Rule 13-503 (Commodity Futures Act) Fees.
Among other things, the amended rules would remove the use of reference fiscal years in the calculation of participation fees and require that market participants calculate their participation fee payable using information from their most recent financial year. According to the OSC, the change would achieve a "closer link" between a market participant's current financial performance and the level of participation fee payable.
A number of new activity fees would also seek to improve fairness and consistency while better matching revenues to the OSC's costs. Proposed new activity fees would include $83,000 for an application for designation as a trade repository, $15,000 for an application for designation as a designated rating organization and an extension of the $4,500 take-over and issuer bid circular fee to information circulars filed in connection with such things as going private transactions, amalgamation and mergers. An additional fee of $2,500 would also apply for each technical report incorporated by reference in a prospectus.
The current rule requiring unregistered investment fund managers to pay participation fees within 90 days after the end of its fiscal year would also be amended to require a fee payment deadline of December 31. Investment fund managers would also no longer be exempted from late fees in respect of filing Form 13-502F4 Capital Markets Participation Fee Calculation. Of particular note, the OSC is also considering whether to change the requirement in respect of the payment of late fees so as to make investment fund managers liable for the late fees in respect of any investment funds for which they act as manager.
According to the OSC, while new exempt market and derivative related fees were also considered, the underlying policy work in respect of those issues has yet to be completed, and any new fees may be included in future proposals. The OSC is accepting comments on the proposed changes until December 17, 2014.