Group says OBSI binding decisions should not face judicial appeals
A coalition of consumer advocates are urging the Canadian Securities Administrators (CSA) to implement the proposed binding decisions framework for the Ombudsman for Banking Services and Investments (OBSI) without potential for third-party appeals.
In an open letter to the CSA, the group which includes FAIR Canada, CARP, Prosper Canada, Kenmar Associates, CFA Societies Canada, and several others, says that the framework provides protection for investors and mean that investment firms could not ignore OBSI’s decisions or push clients into accepting low offers.
The coalition opposes the calls of some in the industry for a third-party appeals process, perhaps a judicial appeal, warning that this would make complaints more costly, complex, and time consuming.
It also says that the proposed threshold for the complaints handled by OBSI is at a fair level with the organization having experience of handling complaints up to $350,000 and any reduction in this level would mean firms that did more harm would not be held to account and investors with higher-level complaints may face pressure to accept lower settlements or be left with nothing.
“Canadians must be confident that governments and regulators will protect them when their hardearned assets are at stake,” said Jean-Paul Bureaud, Executive Director of FAIR Canada. “Delaying or weakening these reforms will only hurt investors and erode trust in the financial system.”
The coalition says that independent expert reviews have consistently found no evidence that OBSI is biased in favour of investors and on average it finds in favour of firms about 67% of the time, and firms underpay OBSI recommendations by millions.
“We would like to set the record straight,” said Elizabeth Mulholland, Chief Executive Officer of Prosper Canada. “We are navigating unprecedented economic times, and investors are feeling the strain. Now, more than ever, we need a fair system that holds firms accountable and gives harmed investors real protection.”
