OSC regulatory fee overhaul draws sharp pushback from SIMA

The Securities and Investment Management Association (SIMA) is calling on the Ontario Securities Commission (OSC) to redesign its fee-setting approach, warning that proposed amendments to OSC Rule 13-502 Fees will add compounding costs to an industry already absorbing multiple fee increases across Canadian jurisdictions.

In a submission filed with the OSC on July 29, 2026, SIMA expressed qualified support for the OSC's stated goals of promoting capital formation and economic growth but raised significant concerns about the mechanics of the proposed amendments.

At the centre of SIMA's objections is the OSC's plan to introduce Ontario Consumer Price Index (CPI)-based annual increases on top of existing participation fees. SIMA argues the proposal creates a duplicative escalator in a fee structure that already rises automatically as industry revenues grow.

Multiple fee increases

According to SIMA's submission, which cites OSC financial statements for the period ending March 31, 2025, market participant fees increased 66.6 per cent between 2016 and 2025 — approximately $58.9 million — representing a compound annual growth rate of about 5.4 per cent. That rate is nearly double Ontario's average CPI over the same period, which was approximately 2.7 per cent.

"We support the OSC's efforts to promote capital formation and growth for all market participants," said Andy Mitchell, SIMA's President and Chief Executive Officer. "At the same time, we urge any amendments to be considered within the context of multiple fee increases and the existing fee models across the broader regulatory environment."

SIMA further warned that the proposed highest fee tier — which would impose substantially higher costs on the largest market participants — has not been accompanied by sufficient justification, particularly regarding the OSC's assertion that those firms generate proportionately greater regulatory intensity.

Calls for structural reform across the CSA

Beyond opposing specific provisions, SIMA's submission puts forward a broader reform agenda for the Canadian Securities Administrators (CSA) as a whole. The association is calling for multi-year fee frameworks that give firms the predictability they need for financial planning, greater transparency in how reserves and surpluses are managed, and full disclosure of segmented cost data by OSC branch.

SIMA also recommends that the OSC reconsider how it calculates participation fees for investment dealers, specifically arguing that financing costs on secured financing transactions — such as repos and securities borrowing and lending — should be deductible from gross revenue when determining market participation fees. The association contends that gross capital markets revenue overstates a firm's true capacity to pay and does not accurately reflect the regulatory burden imposed.

AI and regulatory modernisation

One of the more forward-looking elements of SIMA's submission concerns the role of artificial intelligence in reducing the need for fee increases altogether.

The association questions whether proposed increases to exempt market report and Fund Facts filing fees are necessary, given that both categories involve highly prescribed forms that are, in SIMA's view, well-suited for AI-based automation.

SIMA is also urging the OSC and CSA to move toward a model of regulatory centres of expertise — designating individual securities regulators to lead research and policy development on specific emerging issues on behalf of the broader CSA, rather than having each jurisdiction duplicate the work independently. The association argues this would reduce costs, accelerate modernisation, and strengthen Canada's standing as a competitive financial centre.

The OSC has not yet publicly responded to SIMA's submission. A timeline for finalising the proposed amendments to OSC Rule 13-502 Fees and OSC Rule 13-503 (Commodity Futures Act) Fees has not been confirmed.