The Ontario Securities Commission has finalized its reformed fee model. The rule establishing the new model was delivered to the Minister of Finance on Dec. 20, 2002 and published on Jan. 3.

The rule was withdrawn by the commission to address concerns about a new activity fee of $2,000 for reports of exempt distributions. The activity
fee has been removed from the rule. OSC staff intend to address this fee at a later date by an amendment to the rule which will go out for public comment.

The rule is intended to achieve three primary objectives: to reduce the overall fees charged to market players; to simplify, clarify and streamline the current fee schedule; and to ensure that the fees more accurately reflect the OSC’s cost of providing services to market players.

It requires the payment of “participation fees” and “activity fees”. Participation fees are intended to represent the benefit derived by market players participating in Ontario’s capital markets. Activity fees are intended to represent the direct cost of OSC staff resources to take a specific action or provide service requested by a market player.

The rule attempts to match the OSC’s revenues to costs based on current predictions of future costs of providing services. The OSC is currently proposing the new fee model be re-evaluated every three years, to account for any surplus or deficit.

The rule was resubmitted to the Minister on Jan. 29. Assuming that it is approved by March 31, the rule will come into force on April 14.