The Ontario Securities Commission’s new fee model took effect Monday reducing regulatory costs for market participants, said OSC Executive Director Charlie Macfarlane.

“We are fulfilling our commitment to streamline our fee schedule and charge fees that better reflect the services we provide,” said OSC executive director Charlie Macfarlane. “Costs will increase for some market participants and decrease for others, but overall, costs for market participants are expected to go down by as much as 20% based on current revenues.”

The OSC has already implemented across-the-board fee reductions of over 20% over the past three years.

“Ontario Finance Minister Janet Ecker has approved our new fee proposal, which will bring us to a total reduction of up to 40%,” he said. “When you add it up, these combined fee reductions will result in the industry saving an amount well in excess of $40 million per year in fees payable to the OSC.”

The new schedule incorporates two types of fees. Participation fees reflect the benefit derived by market participants from taking part in Ontario’s capital markets. All market participants, including reporting issuers, registrants and mutual fund managers, will be required to pay an annual participation fee. The participation fees are based on a measure of the size of the market participant, which is intended to serve as a proxy for the market participant’s use of the capital markets.

Activity fees reflect the direct cost for activities provided by OSC staff at the request of the market participant. Examples include processing registration documents, or reviewing prospectuses and applications for discretionary relief.

The OSC commits to re-evaluate the fee schedule every three years, Macfarlane said.

The new fee model was developed with extensive industry cooperation, including focus groups with reporting issuers, dealers, advisers, mutual fund managers, the Investment Dealers Association of Canada and the Investment Funds Institute of Canada, Macfarlane added.