Proposed changes expected to take effect in April 2023
The Ontario Securities Commission (OSC) has begun seeking comments from the public on the proposed changes to its current fee structure.
According to the OSC, the proposed changes reflect the increase in funding required to streamline its derivatives regulatory oversight program and the growth and complexity of capital market activities, and form part of its systemic risk-related mandate, while allowing for burden reduction and fair allocation of costs across market segments.
Under the proposed changes, the OSC will introduce a new fee to the large financial institutions responsible for the most derivatives market transactions in Ontario.
The OSC said that the new fee is expected to bring about $13.5 million in new revenue, which will cover the cost of oversight of the derivatives market and assist the agency with the monitoring of systemic risk. The new fee will also finance future investments in technology and staffing in the derivatives area, which is experiencing significant growth each year.
Alongside the new fee, the OSC will also reduce an array of other fees, including participation, activity and late fees.
“The reductions are aimed at small and medium-sized businesses, in keeping with the OSC's ongoing efforts to reduce regulatory burden, and its mandate to foster capital formation and competitive capital markets,” the OSC said.
The fee reductions are expected to save businesses an approximately $5.6 million: $3.1 million in savings from the reduction of participation fees, $1.8 million in savings from reduced fees relating to certain exempt distribution filings and $700,000 in savings from the elimination of several other activity and late fees.
The OSC will accept comments until April 21, while the proposed changes are expected to take effect on April 3, 2023.