The Canadian Security Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) have jointly published Staff Notice 31-364 – OBSI Joint Regulators Committee Annual Report for 2022 (The Staff Notice).
The Staff Notice serves as the Annual Report of the Joint Regulators Committee (JRC) of the Ombudsman for Banking Services and Investments (OBSI). It provides an overview of the JRC and highlights the major activities conducted by the JRC in 2022.
In 2022, the JRC continued to monitor data on investment-related complaints, including compensation refusals and settlements below OBSI’s recommendations, through the review of OBSI’s quarterly reporting. The JRC believes this data can sometimes provide risk- based indications of potential problems with a firm’s complaint handling practices or raise questions about whether a firm is participating in OBSI’s services in good faith or consistent with the applicable standard of care.
While the JRC found no compensation refusals in 2022, the number of low settlements continued to cause concern. Since OBSI’s 2018 fiscal year, the regulator noted that clients received approximately $1.6 million less than it recommended. For OBSI’s fiscal years 2018 to 2022, out of 844 cases that ended with monetary compensation, 42 instances (approximately 5 per cent) involving 24 firms settled below OBSI recommendations. In the same five-year period, 10 of the 24 firms made settlements below OBSI’s recommended amount more than once. However, two of these firms made additional payments on three cases in 2021 to align compensation amounts with OBSI recommendations after follow-up by the CSA.
The JRC recognizes the impact on complainants when firms refuse to compensate clients consistent with OBSI recommendations or settle for lower amounts than recommended by OBSI. The JRC continues to monitor low settlements and supports the ongoing work of the CSA to provide OBSI with the authority to make binding awards.
The JRC is composed of designated representatives from the CSA and CIRO. In 2022, CSA-designated representatives were from British Columbia, Alberta, Ontario, and Quebec. In 2022, the JRC also included representatives from the two self-regulatory organizations (SROs) that amalgamated on January 1, 2023 and are predecessors to CIRO, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA).
CSA Staff Notice 31-364, OBSI Joint Regulators Committee Annual Report for 2022, is available for download from CSA members’ websites.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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