The Ontario Securities Commission has finalized its proposed new fee rule and sent it to the minister of finance for approval.

The OSC published the latest version of its’ fee rule for a 90-day comment period back in October. In Friday’s OSC Bulletin, the commission reports that it made some changes to that proposal, and that the amended rule was sent to the minister for approval on Jan. 20. If it is approved by March 19, it will come into force on April 5.

Among other things, the OSC is proposing that participation fees for reporting issuers be increased by 17% annually over three years; that capital markets participation fees be increased by 9% annually over three years; and certain activity fees are also being increased. “Where no change in an activity fee is proposed, higher costs for resources have been offset by savings from process improvements and improved quality of material submitted for review,” it notes.

The rule proposed back in October generated comment letters from three fund managers and two lobby groups. Among other things, they complain that the fund industry is currently paying a disproportionate share of the OSC’s fees. The commission agrees with this assessment, and says that the proposed increases move toward a better balance, but adds that the sort of increase needed to eliminate the disparity would not be tolerable. It promises to resolve the issue “as soon as practicable”.

Other comments suggest that it is not the right time to increase fees, due to the effects of the market crisis; and, particularly for the mutual fund industry because of the costs of the new point-of-sale regime and the new harmonized sales tax. “We understand the concerns about the impact of the costs arising from additional regulation, however, these measures are necessary to achieving our mandate to provide protection to investors and to foster fair and efficient capital markets,” it says.

IE