guidelines and regulations binders

The Ontario Securities Commission’s (OSC) current fee model will remain in place for two years, starting April 1, the regulator announced Thursday.

Higher-than-expected revenues and lower-than-expected costs will produce a surplus, the OSC explains in a notice.

Revenues at Canada’s largest securities regulator are 3% higher than forecast for the 2015-2018 period due to stronger capital market growth.

In addition, the commission’s costs for the three-year period are 5% lower than originally estimated.

As a result, the OSC expects to record a modest surplus for fiscal 2018.

Looking ahead, the regulator says that it expects annual cash flow deficits starting in fiscal 2019. This forecast assumes weaker market growth in the next couple of years. As well, the OSC says that it expects activity fees “to normalize” over the next two years.

“The OSC’s revenues, in particular revenue generated from participation fees (84% of total revenues), are directly tied to changes in firm, industry and general market growth. Should there be a market decline in the absence of an adequate reserve, rates would need to be revisited at that time,” the OSC notice says.

“The resources employed in performing activities for which activity fees are charged were considered reasonably stable, warranting no changes to these fees at this time.”

With its fees remaining unchanged, the OSC says that it will draw on its existing cash to finance its planned “critical investments in data and information systems, enforcement tools, facilities rehabilitation, and other technology.”