Last month, the Ontario Securities Commission published final amendments to OSC Rule 13-502 Fees and its companion policy that will see an increase to the current fees payable by market participants. As we described in August 2012, the OSC published proposed amendments to its fee structure last year.
While the final version of the amendments is generally consistent with the earlier proposal, the OSC has taken steps to address some of the concerns communicated during the public comment process. For example, while the original proposals contained increases in participation fees over a three-year fee cycle of 7.9% per year for registrants and 15.5% for issuers, the increases have been reduced to 4.7% and 11.65% per year, respectively.
Of note, the OSC has exempted unregistered investment fund managers that do not have a place of business in Ontario from the requirement to calculate and pay capital market participation fees where the investment fund manager does not have security holders resident in Ontario or where there has been no active solicitation of investors in Ontario after September 27, 2012. However, while many commentators expressed opposition to the OSC’s proposed change to the calculation of fees based on a “reference fiscal year”, which for many market participants will result in the fees payable over the next three years to be based on historical market capitalization or revenue data rather than current data, the OSC, citing the need for predictability in its fee revenues, proceeded with this change.
Assuming Ministerial approval, the amendments to both rules will come into force on April 1, 2013.