TORONTO – The Ontario Securities Commission (OSC) today published for comment proposed changes to its fee rules that would establish a new fee for the market participants that are most active in Ontario’s over the counter (OTC) derivatives market, while reducing certain fees for the vast majority of Ontario market participants. The proposed amendments reflect the growth and complexity of capital market activities and the OSC’s systemic risk-related mandate, while considering burden reduction and fair allocation of costs across market segments.
In support of this mandate, the OSC will introduce a new fee, totaling $13.5 million, to the large financial institutions responsible for the vast majority of derivatives transactions in Ontario. The increase reflects the complexity and growth in the province’s OTC derivatives sector and the need for comprehensive oversight. The fee covers the cost to the OSC of oversight of the derivatives market and assists with the monitoring of systemic risk. The fee will also cover future investments in technology and staffing resources to oversee this activity, which continues to increase significantly each year.
At the same time, proposed changes to the OSC’s fee rules would result in a targeted reduction in participation, activity, and late fees of approximately $5.6 million. 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 proposal includes an estimated $3.1 million in savings from the reduction of participation fees, which would benefit an estimated 98 percent of registrants and 88 percent of reporting issuers. In addition, exempt market participants would benefit from an estimated $1.8 million in savings from reduced fees relating to certain exempt distribution filings. The proposed changes also include approximately $700,000 in savings from the elimination of several other activity fees and late fees.
Stakeholders are invited to provide comments in writing by April 21, 2022.
Proposed Amendments to OSC Rule 13-502 Fees, OSC Rule 13-503 (Commodity Futures Act) Fees and changes to their respective companion policies are available on the OSC’s website.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at https://www.osc.ca.
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