Regulatory fees are on the way up for both registered firms and individual reps in Alberta under a proposed new fee schedule published on Monday by the Alberta Securities Commission (ASC).
Among the changes proposed by the ASC, the annual fee for dealers, advisors and investment fund managers would be increased to $1,400 from $1,200, and the fee for individual reps will be increased to $400 per year from $300.
In addition, the regulator proposes to change from a fixed-fee model to a participation-fee model based on market capitalization for most reporting issuers. The ASC is also proposing participation fees for regulated entities such as exchanges based on either their share of Canadian trading, or a fixed fee, depending on the nature of the firm, and whether they service securities or derivatives markets.
The proposed new schedule would also introduce fees for international dealers and advisers, and it would eliminate fees based on proceeds from either a distribution of securities, or exempt distributions for reporting issuers that are not investment funds.
The ASC has not raised fees since 2006 (when a 20% increase was implemented over three years), the regulator notes. Since then, its regulatory obligations have increased “as more resources are required to monitor growth and ensure compliance in the exempt market, manage increasingly complex enforcement cases, and proactively address constantly evolving fraudulent activities,” the ASC says in a statement.
The has operated at a deficit for the past four years, the regulator notes, and notwithstanding the proposed new fee model, it is not expecting to increase spending.
“With significant changes in the size and complexity of Alberta’s capital market over the past ten years, the proposed changes are essential for the ASC to continue to fulfill our mandate of ensuring a fair and efficient capital market and protecting investors,” says Tom Cotter, interim chairman and CEO of the ASC. “Acknowledging that these changes come during a difficult financial period in Alberta, we believe the new fee structure represents an appropriate balance between the necessity of balancing the ASC’s budget with any impact increased regulatory costs may have on market participants.”
The new model is out for a 75-day comment period that will end on Jan. 18, 2016. The proposed new fee schedule, which requires ministerial approval, would come into force on Dec. 1, 2016.