The Ontario Securities Commission says operating expenses are expected to increase 4.3% this year while revenues will fall 3%.

In its most recent proposed statement of priorities for fiscal 2003/2004, the OSC says it has budgeted for total 2003/2004 operating expenditures of $57.8 million, a 4.3% increase over projected 2002/2003 expenditures. The key budget component is salaries and benefits costs, which are projected to rise by 8.3% to $40.7 million. Total staffing is projected to remain at current levels.

The OSC revenue forecast for 2003/2004 is $65 million, which is 3% lower than the $66.9 million projected in 2002/2003.

The OSC is required to publish its priorities by June 30 of each year. It sets out how the OSC plans to meet its business strategy and priorities for the coming year. The commission is requesting comments on its priorities statement.

This year, the OSC says it recognizes that it must address a number of key trends and changes affecting the business environment, capital markets, market participants and the global regulatory framework. In particular, it must focus on public confidence in capital markets, streamlining the securities regulatory process and the global integration of markets and market participants.

Among its plans, the OSC is planning to develop a model to permit flexibility in the business models that registrants can use. It says that during 2003/2004 the OSC will focus resources on restructuring the registration system, including harmonizing categories of registration and conditions of registration across Canada; it also wants to create a passport system permitting a registrant in one province to trade or advise in another.

During 2003/2004 the OSC plans to publish draft rules for comment to address the following issues: auditor oversight; CEO/CFO certification of financial information; and the composition and responsibilities of audit committees.
The OSC says that it will have superior and transparent governance and accountability mechanisms. It plans to adopt a more customer-focused approach to communications and service delivery, improve the transparency of OSC corporate governance practices and accountability mechanism and tailor the form and method of access to OSC communications to the needs of OSC constituents, including implementing predominantly electronic-based communications vehicles and redesigning the OSC Web site.

The OSC also will implement a restructured fee schedule, effective March 31. Currently, the OSC remits all revenues surplus to its operations to the Ontario government. Now, the OSC plans to review its fee structure every three years. Any surplus net revenues generated during the three-year period will be used by the OSC in calculating future fee levels and would reduce the need for future fee increases.