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FCNB Local Rule 11-501 Fees

Letter Summary:

The amendments to the fee rule in New Brunswick would impose new late fees for late filings of certain documents, including exempt distribution reports and insider reports, in each case to a maximum for each report or calendar year as applicable. In addition, requests for refunds would need to be made within 2 years. Fees are charged in similar circumstances in other CSA jurisdictions.

Overview of the Council’s Comments:

The council is supportive of the Proposed Amendments, as we encourage members of the CSA to seek harmonization of filing fees and filing requirements. We suggest that additional consideration could be given to including failure to file exempt distribution reports on time on the list for repeat offenders, in addition to the proposal that the new fee imposed will be shown in default on the New Brunswick reporting issuer list.

The council also referenced an article abstract from CFA Institute entitled “Regulating Fraud in Financial Markets: Can Behavioural Designs Prevent Future Criminal Offences?” (DigestSummary) which suggests that a study of three criminal securities law cases in the United States illustrates that punishments such as fines may not be the ideal deterrent for certain behaviours, but that early detection may have been. The author of the abstract suggests that behavioural insights may be a more effective tool in promoting ethical conduct in the work environment. In the context of the Proposed Amendments, consistent late filings of important disclosure documents may be a sign of a more serious underlying problem at the issuer or registrant.