CSA proposes binding authority for dispute resolutions

The Canadian Securities Administrators (CSA) has sent out a notice to seek general feedback on a proposed regulatory framework set out for an independent dispute resolution, bringing forward a binding regime for investment-related disputes.

The Ombudsman for Banking Services and Investments (OBSI), under the proposed framework, would be designated as the independent dispute resolution service for the investment industry. The proposed framework includes as well proposed rule amendments to certain complaint-handling provisions under the Canadian securities law.

“The CSA is seeking comment on proposed changes to the system of redress available to Canadian investors when they have a dispute with their investment firm. While we continue to develop key areas of the regime, we are soliciting feedback from industry and retail clients to help inform this ongoing work,” said Stan Magidson, chairperson of the CSA and chair and CEO of the Alberta Securities Commission.

All registered dealers and advisers should take reasonable steps to make OBSI available to their clients as a dispute resolution service. However, with the current regulations, OBSI cannot issue binding decisions. The CSA has presented in the proposed framework the benefits of giving OBSI binding authority after considering various public reports, consultations, and reviews.

The British Columbia Securities Commission (BCSC) is considering legislative changes to achieve the same outcomes and is interested in feedback on the proposed framework and will take comments into consideration. Therefore, it is not participating in the proposal for comment on the rule amendments.

In Québec, under legislation, the Autorité des marchés financiers (AMF) provides a dispute resolution service as well as conciliation and mediation services to consumers of financial products and services and retail investors. The AMF is participating in the consultation, proposing to maintain the exemption applicable to firms registered in Québec with regards to requirements around dispute resolution services.

 The period provided for comments is 90 days since posting, wherein stakeholders can leave comments until February 28, 2024. The CSA Notice and Request for Comment can be found on CSA members' websites.

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