The Canadian Securities Administrators (CSA) is inviting feedback on its 60-day consultation on its proposed framework for an independent dispute resolution service with binding authority, presumably of the Ombudsman for Banking Services and Investments (OBSI).
According to a news release from the CSA, the consultation covers its proposed:
- oversight model to balance between OBSI’s independence and accountability
- refinements to the review and decision stage of the dispute resolution process
- changes to the second-stage review of the dispute resolution process for OBSI compensation recommendations for $75,000 and over, with OBSI obligated to appoint external decision-makers to review recommendations before finalizing the decision
“Introducing binding authority for investment complaints is important to ensure investors have the ability to seek access to an impartial, fair and efficient dispute resolution process, and to give more certainty to businesses over the outcome of claims,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission, in the news release.
Magidson added that the planned changes seek to update the structure of the Canadian capital markets and streamline the complaints process, which will benefit investors and businesses.
In its news release, the CSA noted that the imposition of the final framework would depend on whether the different provincial and territorial governments would enact enabling legislation. As the council of Canada’s securities regulators, the CSA aims to coordinate and harmonize regulations for the country’s capital markets.
Areas of interest
In its news release, the CSA urged stakeholders to share their general feedback on the consultation by Sept. 15.
In its notice and request for comment, the CSA said those interested could also respond to these specific questions:
- Is $75,000 an appropriate threshold amount to require OBSI to appoint an external decision-maker or a panel of external decision-makers at the second stage?
- Does setting a monetary threshold for the requirement to appoint an external decision-maker at stage two impact the accessibility of the proposed framework for investors?
- What are the potential advantages and disadvantages of permitting OBSI to appoint senior OBSI staff not involved in the first-stage process to a panel conducting the second-stage process in cases that meet or exceed the proposed monetary threshold, if the majority of the panel comprises external decision makers?
- Does the oversight framework strike the appropriate balance between ensuring OBSI’s accountability and maintaining OBSI’s organizational and decision-making independence?
- What would the impact be of maintaining OBSI’s current six-year limitation period?
The CSA noted that it got feedback on OBSI’s six-year limitation period since some jurisdictions have two-year limitation periods. The CSA explained that it did not have current plans to change OBSI’s limitation period, with its notice giving the context behind this limitation period.
2023 consultation
In its news release, the CSA shared that certain proposed changes reflected comments received during its consultation two years ago.
In November 2023, the CSA’s members released a notice and request for comment concerning registered firm requirements for an independent dispute resolution service. Apart from the BC Securities Commission (BCSC), members published for comment proposed changes to:
- some complaint-handling provisions of NI 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations
- Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations
While the BCSC did not publish these planned changes, it supported the initiative’s intended results. The BCSC, which was weighing possible legislative amendments that could attain the same goals, expressed its interest in opinions on the proposed oversight model, refinements, and OBSI’s limitation period.
The Autorité des marchés financiers (AMF) in Quebec planned to retain the exemption applicable to Quebec-registered firms for dispute resolution services requirements.
The CSA confirmed that Quebec would not recognize OBSI. However, the CSA noted that the province’s retail investors and other financial products and services consumers could still avail of OBSI’s non-binding services alongside the AMF’s conciliation and mediation services.