The Ontario Securities Commission (OSC) has released its Management’s Discussion and Analysis (MD&A) report for 2016, outlining how much the regulator earned and spent during its fiscal year, as well as its plans for 2017.
New fee rules which were implemented in April 2015 helped to increase the OSC's total revenues to $116.8 million in 2016, up 12.4% compared to the previous year, while expenses increased by 5% to $104 million. The regulator says that the year-over-year increase in the latter is mostly attributable to higher salaries and benefits costs due to new personnel hired in priority areas.
Salaries and benefits came to about $79 million and accounted for 76.2% of the OSC's total expenses last year. For 2017, the regulator plans to spend $83.5 million on salaries and benefits. "The increase reflects an increased investment in the oversight of the derivatives market, the implementation of the Whistleblower program and investment in information services," reads the report.
Most of the money the OSC requires to fund its operations will have to come from fees. It certainly won't be generated by the sanctions it imposes; although the regulator handed out $59,026,455 in penalties in 2016, it was only able to collect 18.57% of that amount or $10,959,020.
Looking for ways to improve
“Historically, collection rates from market participants have been much higher than from respondents sanctioned on matters related to fraud – where assets are typically non-existent or inaccessible. Collections of monetary sanctions improved in 2016 primarily because two of the respondents are well-established firms that paid the sanctions assessed to them,” reads the report. “We continue to look for ways to improve our collections rates, including reviewing the experiences of other public and private sector organizations to identify methods that can be used by the OSC.”