The Ontario Securities Commission has now finalized changes to OSC Rule 13-502 Fees, which will come into force on June 1, 2009, subject to the necessary approvals by the Ontario Minister of Finance.
In response to comments – including those of Borden Ladner Gervais LLP – the OSC has decided to not increase the participation or activity fees payable by reporting issuers and registrants for at least another year. The OSC has also dropped the controversial proposal to levy participation fees based on historical results of a reference financial year – being the last completed financial year that ended prior to January 1, 2008.
We described the proposed changes to the Fee Rule in our Securities and Capital Markets Alert of December 2, 2008, available here.
Because of its decision to not increase fees at this time, the OSC anticipates a significant revenue shortfall. The OSC plans to retain the forecast $45 million revenue surplus for the year ending March 31, 2009 to help offset its operating deficit.
These measures will result in a period where fees do not reflect the actual costs of the OSC’s operations. The OSC expects that future fee increases, which may be significant, will be required for the OSC to return to recovering costs in 2010 and following years.
Changes to the Fee Rule have also been made to deal with technical issues. Please click here for the OSC’s Notice and the final Fee Rule.
Other changes to the Fee Rule that will affect registrants will be made once proposed National Instrument 31-103 comes into force, expected later this year.