Ontario's finance minister has approved contentious amendment to calculation of fees for credentialing bodies
Despite multiple stakeholders voicing their concerns to Ontario’s financial services regulator, its proposal to revise a rule to create a special calculation for self-regulatory credentialing bodies (CBs) has been approved.
Last week, the Financial Services Regulatory Authority of Ontario released its final Rule 2022 – 001 Assessments and Fees (Fee Rule). The rule was approved by the province’s Minister of Finance on September 13.
Among numerous provisions, the new fee rule specifies a separate system of calculating fees for self-regulatory organizations (SROs) that are approved as CBs under the province’s title protection regime. As of now, the Canadian Investment Regulatory Organization (CIRO) is the only SRO being considered as a CB.
In June, multiple stakeholders representing advisors, financial professionals, and advocates released a joint statement against such a change, asserting it would be “fundamentally flawed.”
“If approved by the Minister, it would create fee exemptions that are completely disproportionate to Title Protection Framework cost realities, and would exempt CIRO and its representatives from paying their fair share of fees required to fund Ontario's Title Protection Framework; fees all other credentialing bodies (CBs) and their credential holders pay,” that joint statement said.
FP Canada, one of the voices who spoke out with concerns in June, has reiterated its position in a new statement reacting to the approval of the Fee Rule:
“FP Canada is very disappointed that Ontario’s Minister of Finance has signed off on the revised FSRA Fee Rule. As FSRA’s consultation summary indicates, virtually all stakeholders had concerns with the revised Fee Rule. Many stakeholders recommended consumer-focused alternatives and suggested a better way to bring CIRO into Ontario’s Title Protection Framework. It is unfortunate that these suggestions were not considered by FSRA or the Minister.”
A call for fairness
In an email to Wealth Professional, FSRA explained that it would be inconsistent with its fairness principles to charge CIRO as much as other CBs, as it’s also subject to oversight by the Ontario Securities Commission (OSC) and the Canadian Securities Administrators (CSA). But FP Canada disagrees.
“We continue to be concerned with a Fee Rule that includes an arbitrary annual fixed fee for CIRO. Other than to state in general terms that the objective of the revised Fee Rule is to avoid duplication of regulatory oversight, FSRA has not been able to provide any rationale for the quantum of the $25,000 fixed fee. Given the lack of information provided to stakeholders, it is challenging to understand how the revised fee rule aligns with FSRA’s principles of fairness, consistency, and transparency.”
FP Canada is urging a rethink and for the FSRA and the Ministry of Finance to re-engage with all stakeholders “to restore fairness to the allocation of costs associated with Ontario’s Title Protection Framework.”