The Investment Dealers Association of Canada is considering hiking the non-refundable portion of its application fee to $10,000 from $2,000.
The IDA says that it is the current $2,000 deposit requirement does not reflect the full cost of reviewing an application. In cases where applications are denied, the SRO says that it’s the other IDA members who effectively bear the added cost.
The IDA is contemplating two ways to deal with the issue:
- hiking the deposit requirement to $10,000; or
- requiring a deposit significantly higher than the current $2,000 with the proviso that the portion of the deposit not related to costs incurred by the IDA would be returned if the application is withdrawn or is unsuccessful.
The regulator notes that the second option would require the IDA to build an accounting infrastructure to track all costs related to a new member application across all departments involved in the process to provide a detailed reporting breakdown of the costs in determining the amount to be refunded.
The IDA says that it prefers requiring a non-refundable deposit of $10,000, “as it serves to differentiate the serious applicant and provides the most simplistic method for the association to recover costs involved in relation to the application review in the event it is either withdrawn or unsuccessful.”
The proposed bylaw change also allows the IDA to require an applicant to reimburse it for extraordinary costs involved with an application.