Firm Bulletin: Changes to OBSI’s Fee Calculation Methodology for CIRO Firms

OBSI is changing the methodology used to allocate fees for CIRO regulated firms. The changes are intended to improve administrative efficiency, fee transparency and fee predictability for firms.

The total amount charged to the CIRO sector as a whole will not change as a result of adoption of the new methodology. However, how we allocate this amount among firms in the sector is changing. The changes will take effect in fiscal 2027.

Previous fee calculation methodology

OBSI operates on a cost recovery basis. Each year, OBSI’s Board of Directors approves both the organization’s overall budget and the allocation of that budget among the industry sectors that use OBSI’s services. This allocation is grounded in the principle that no sector or registrant category should subsidize another.

Sector allocation

For fee setting purposes, OBSI allocates its budget across five industry sectors based on the number and complexity of cases opened in the most recently completed year: 

• Banks and other federally regulated financial institutions, including payment service providers
• Investment firms that are members of CIRO, including investment dealers and mutual fund dealers
• Investment firms that are not members of CIRO, such as portfolio managers, exempt market dealers, restricted registrants and investment fund managers
• Scholarship plan dealers
• Provincial credit unions

This approach ensures that each sector bears costs proportionate to its actual demand on OBSI’s services, and the resources required to investigate and resolve complaints. The sector allocation will not change under the new fee model.

Once the sector-level allocations are established, OBSI determines firm-level fees within each sector.

CIRO firm fee allocation

Under the previous methodology, for CIRO firms, the sector fee was further allocated between investment dealers and mutual fund dealers. This allocation was calculated based on the number of cases opened over the previous rolling eight quarter period.

The sub-sector fee was then allocated amongst individual firms on the basis of firm size. For investment dealers, size was assessed on the basis of the count of approved persons and for mutual funds dealers, size was assessed on the basis of assets under administration.

New fee allocation methodology

Starting November 1, 2026, OBSI will implement the following changes to our billing process for CIRO member firms:

• The quarterly CIRO sector fee allocation will no longer be divided between investment dealers and mutual fund dealers.
• The allocation of the quarterly sector allocation among individual CIRO member firms will be made on same basis as is used by CIRO pursuant to their new integrated fee model – i.e., based on count of approved persons and adjusted revenue (including AUA for all mutual fund dealers). OBSI fees will be allocated among CIRO member firms in the same relative proportion as CIRO’s fees are allocated.
• OBSI will collect proportionate firm fee allocation information from CIRO on a quarterly basis.

Benefits of the new methodology

The new methodology will:

• better align CIRO fee calculations with the fee allocation approach used for other sectors that use OBSI’s service
• significantly simplify fee calculations by eliminating the need to maintain and update rolling multi-year calculations and will reduce the quarterly billing administrative burden for CIRO and OBSI
• provide greater fee transparency and predictability for CIRO member firms by reducing the volatility associated with rolling, overlapping periods
• increase the fairness and accuracy of the firm size calculations used for our fee assessments – the new CIRO Integrated fee model is based on a broader set of measures than OBSI’s current fee model (i.e., revenues and AUA including Quebec-based AUA)
• be adaptable to the increasingly integrated business models of some CIRO member firms

Financial impact on firms

Overall, the new process will be economically neutral to the sector. The total amount charged to CIRO members will not change as a result of adoption of the new methodology. However, within the sector, some CIRO member firms will see decreases in OBSI fees and some will see increases.

Fee variances among firms will primarily be due to the inclusion of firm revenue and Quebec based AUA in the criteria for fee allocation. In general, investment dealer firms with higher revenues will see increases (especially those with relatively low approved person numbers), while investment dealer firms with lower revenues (especially those with relatively high approved person numbers) will see decreases.

For mutual fund dealers, firms with significant assets in Quebec will see increases, while most other mutual fund dealers will see decreases. We note that the net effect of this change will be to better align OBSI fees for Quebec-based firms to other OBSI member firms of similar size and complaint volume levels.

Why is OBSI making this change?

OBSI’s previous methodology for allocating fees to CIRO member firms was first developed in 2002, when OBSI first received the mandate to consider investment cases. While the current process has evolved over the years to reflect the increased independence of OBSI’s internal administration and the merger of IIROC and MFDA, it continues to reflect historical considerations and past practices that are no longer appropriate or necessary.

Expect to hear from us in November

OBSI's fiscal year begins on November 1. CIRO firms can expect to receive their invoices and payment instructions directly in November. 

If you have any questions, please contact membership@obsi.ca or call 1-888-451-4519 ext. 2418.