Ms. Maureen Jensen reports

OSC PROPOSES AMENDMENTS TO FEE RULES

Ontario Securities Commission has published proposed amendments to OSC Rule 13-502 fees and OSC Rule 13-503 (Commodity Futures Act) fees for a 90-day comment period. While the OSC typically re-evaluates its fee levels only once every three years, the commission is re-examining its fee rules early to consider important issues raised by market participants. The OSC wishes to be responsive to its stakeholders and ensure that its fee rates remain appropriate.

The proposed rules introduce changes to simplify and streamline the process for calculating participation fees. One key proposed amendment is that market participants would calculate their participation fees based on their most recent financial year, rather than using a reference year. The main advantage to this model for market participants is that fees will track more closely to their current fiscal situation, with fees rising or falling based on changes in their respective business conditions or performance.

The proposed approach may reduce the predictability of OSC revenues; however, recent growth in the markets, coupled with the OSC's continuing cost controls, allow the OSC to avoid implementing the increased rates that were to come into effect April 1, 2015, and to maintain participation fee rates at current rate levels.

"The proposed rules carefully considered comments from our stakeholders as well as our funding needs," said Maureen Jensen, executive director and chief administrative officer of the OSC. "As a result, the proposed amendments establish a new model that better reflects current market activity and is less complex to administer."

The OSC continues to operate on a cost-recovery basis, is committed to efficient, continuing cost control and continues to align decisionmaking with government directions on fiscal responsibility.

The proposed amendments have been published to address comments from the OSC's stakeholders on the understanding that changes to the current regulatory structure in Canada are under way, specifically progress toward a co-operative capital market regulator.

Comments on the proposed amendments to Rule 13-502 and Rule 13-503 are encouraged and should be submitted by Dec. 17, 2014.