2019 Capital Markets Participation Fees and Related Matters – Action Items
1. YOUR REQUIRED SUBMISSION OF 2019 FEE FORMS AND PAYMENT OF 2019 CAPITAL MARKETS PARTICIPATION FEES
This e-mail is being sent to:
- firms registered in Ontario under the Securities Act or the Commodity Futures Act (including agents for service identified by the firm on our National Registration Database, or NRD), who will be required as a “registrant firm” to pay a capital markets participation fee for 2019 under the corresponding fee rules referred to below
- firms relying on certain exemptions from registration requirements in Ontario under the Securities Act or the Commodity Futures Act (including agents for service identified by the firm on NRD), who will be required as an “unregistered capital markets participant” to pay a capital markets participation fee for 2019 under the corresponding fee rules referred to below
(This e-mail is also being sent as an information item to subscribers to the OSC’s Registrant Outreach program.)
The Fee Forms used to calculate the 2019 capital market participation fees are now available on the OSC’s website in the Participation Fees section of https://www.osc.gov.on.ca/en/Dealers_forms_index.htm
- Form 13-502F4 Capital Markets Participation Fee Calculation under Ontario Securities Commission Rule 13-502 Fees (OSC Rule 13-502)
- Form 13-503F1 (Commodity Futures Act) Participation Fee Calculation under Ontario Securities Commission Rule 13-503 (Commodity Futures Act) Fees (OSC Rule 13-503)
All firms receiving this email should note the following deadline dates:
- December 02 - Deadline to file Form 13-502F4
- December 02 - Deadline to file Form 13-503F1
- December 31 - Deadline to pay applicable annual participation fee(s)
Note: Under OSC Rules 13-502 and 13-503, firms that do not meet applicable deadlines will be subject to additional fees for any late filing or payment.
Also, under subsection 29(1) of the Securities Act, the registration of a firm will be automatically suspended if its capital markets participation fee required to be paid under OSC Rule 13-502 remains unpaid for more than 30 days after its December 31, 2019 due date.
- In completing the applicable Fee Form, each firm must use gross revenues from its financial year ending in 2019 to calculate its 2019 capital markets participation fee. This may require some firms with a financial year-end occurring in the last quarter of the 2019 calendar year to estimate the firm's gross revenues for the purposes of completing its calculation of its 2019 capital markets participation fee.
Payment of 2019 capital markets participation fee
- For registrant firms with bank account information recorded on NRD, capital markets participation fees will be automatically withdrawn by the Ontario Securities Commission from the firm’s bank account
- For all other firms, payment of their capital makets participation fee must be made by cheque or wire transfer. Cheque and wire transfer payment instructions, along with additional payment details that must be provided with the payment are set out in the instruction #4 link, below.
Certification of 2019 Fee Forms (including NEW OPTIONS)
- Under amendments to OSC Rule 13-502 and OSC Rule 13-503 that came into force on October 18, 2019 (the Rule Amendments), firms can now have specified individuals, other than the Chief Compliance Officer, certify their 2019 Fee Forms as to completeness and accuracy.
- The Commission has introduced this additional flexibility in who may certify the Fee Forms, as part of the Commission’s Burden Reduction Task Force initiative, to facilitate potential time savings for firms that are required to file a Fee Form.
- Previously, the chief compliance officer (CCO) of the firm (or, in the case of an unregistered capital markets participant without a CCO, an individual acting in a similar capacity) was required to certify for completeness and accuracy.
- The Fee Forms may now be certified by one of the following:
- the chief compliance officer of the registrant firm or the unregistered capital markets participant;
- in the case of an unregistered capital markets participant without a chief compliance officer, an individual acting in a similar capacity;
- a specified officer of the registrant firm or the unregistered capital markets participant, or an individual acting in a similar capacity;
- a director of the registrant firm or unregistered capital markets participant.
For the purposes of the above paragraph (c), “specified officer” of a registrant firm or an unregistered capital markets participant, is defined under the Rule Amendments to mean an individual with any one or more of the following positions in relation to the registrant firm or the unregistered capital market participant:
- chief executive officer;
- chief financial officer;
- chief operating officer.
- Firms that wish to continue their existing processes for Fee Form certification by their CCO are still be permitted to do so.
Note: Firms that have already submitted their 2019 Fee Forms using the previous Fee Form that was posted on the OSC website before October 18, 2019 are not required to re-submit using the above 2019 Fee Forms, which reflect the Rule Amendments.
2. IF YOU ARE CONSIDERING: VOLUNTARILY SURRENDERING YOUR REGISTRATION; CONSENTING TO THE SUSPENSION OF YOUR REGISTRATION; OR PROVIDING NOTICE OF YOUR NON-RELIANCE ON AN EXEMPTION
- Registrant firms that wish to apply for a voluntary surrender or consent to the suspension of their registration must complete and file an application letter (which should be attached as a pdf to the online portal form, prepared in accordance with the template set out in the instruction #5 link, below).
- Unregistered capital markets participants who no longer wish to rely on an exemption from a registration requirement under section 8.18 [International dealer] or section 8.26 [International adviser] of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, or under section 4 [Permitted clients] of Multilateral Instrument 32-102 Registration Exemptions for Non-Resident Investment Fund Managers, must complete and file a notification of non-reliance on the exemption through the OSC’s online portal and file a notification letter (which should be attached as a pdf to the online portal form and include the information set out in the instruction #6 link, below).
- We recommend that firms submit their application or notification by December 16, 2019 for review and processing prior to the December 31, 2019 deadline for payment of their capital markets participation fees. If we receive applications or notifications after December 16, 2019, we may not be able to process them in time for these to be reflected in the capital markets participation fee that is due on December 31, 2019.
4. IF YOU WANT MORE INFORMATION
- OSC Rule 13-502 Fees
- OSC Rule 13-503 (Commodity Futures Act) Fees
- Link to OSC’s Registrant Search to identify the firm’s National Registration Database (NRD) number
- Payment instructions
- Instructions for application for voluntary surrender or consent to suspension of a firm’s registration
- Instructions for notification that an unregistered capital markets participant is no longer relying on an exemption from registration
5. IF YOU HAVE ANY QUESTIONS
If you have any questions, please contact the OSC Contact Centre by e-mailing [email protected] or calling 1-877-785-1555 (toll-free) or 1-866-827-1295 (TTY).