OBSI Joint Regulators Committee Responds to Independent Evaluator’s Report

Toronto, ON – In response to the release of the independent evaluator’s report of the Ombudsman for Banking Services and Investments (OBSI) published today, the OBSI Joint Regulators Committee (JRC) is issuing the following statement:

A fair, efficient and accessible dispute resolution system is an important component of the investor protection framework and is vital to the integrity and confidence of the capital markets. The JRC strongly supports OBSI as the dispute resolution service and expects registrants to abide by their obligations by participating in OBSI’s services in a manner consistent with their obligation to deal fairly, honestly and in good faith with their clients.

The Canadian Securities Administrators (CSA) and JRC have received a copy of the report of the independent evaluators delivered to the OBSI Board, and we thank them for their work on this evaluation. The JRC has met and will continue to meet with OBSI staff and will meet with the OBSI Board in September to learn more about OBSI’s position on the report’s findings and recommendations. In the meantime, we will begin analyzing the findings and recommendations, along with other stakeholder input, in considering next steps in response to the report.

BACKGROUND:

In 2014, amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) came into force requiring all registered dealers and advisers outside Québec to offer OBSI’s services to their clients.  In conjunction with the passing of these amendments, the CSA and OBSI signed a Memorandum of Understanding (MOU) that creates a framework for oversight and engagement.

The MOU provides for certain standards for OBSI to meet, including around governance, independence and standard of fairness, processes to perform functions on a timely and fair basis, fees and costs, resources, accessibility, systems and controls, core methodologies, information sharing, and transparency. It provides a framework for cooperation and information sharing between OBSI and the CSA.  OBSI agreed to undergo an independent evaluation within two years of the amendments to NI 31-103 coming into force and at least once every five years thereafter.

In addition, at the time the MOU was signed, the CSA and OBSI agreed with the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) to form the JRC. The role of JRC is to:

• facilitate a holistic approach to information sharing and monitoring of the dispute resolution process with an overall view to promoting investor protection and confidence in the external dispute resolution system;
• support fairness, accessibility and effectiveness of the dispute resolution process; and
• facilitate regular communication and consultation among JRC members and OBSI.

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Members of the JRC are representatives from the CSA (currently, CSA designated representatives are from British Columbia, Alberta, Ontario, and Québec), and the two self regulatory organizations, IIROC and MFDA. The JRC meets regularly with OBSI to discuss governance, patterns and trends, and operational matters and other significant issues that could influence the effectiveness of the dispute resolution system.

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