Requirement to Make OBSI Available to Clients

Effective May 1, 2014, National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) was amended to make the Ombudsman for Banking Services and Investments (OBSI) the common dispute resolution service for the securities industry outside of Québec. The transition period for existing registrants ends on August 1, 2014. After that date, all dealers and advisers registered in Ontario must take reasonable steps make OBSI’s services available to clients who have “eligible complaints”. This includes becoming an OBSI “Participating Firm” by that date and thereafter, cooperating in any OBSI dispute resolution process that involves the firm. There are also related new client disclosure requirements in the amendments. For more information about these amendments, see CSA Notice of Amendments to NI 31-103 and to 31-103CP (Dispute Resolution Services)

Firms whose only clients are permitted clients who are not individuals are not affected by the amendments. IIROC and MFDA Member Firms are not materially affected by the amendments, because they will continue to be subject to Member Rules that already mandated the use of OBSI. We remind all dealers and advisers of their existing requirements in section 13.15 of NI 31-103 to have internal complaint handling policies to ensure that all client complaints are addressed appropriately.

On May 1, 2014, the CSA published Staff Notice 31-338 Guidance on Dispute Resolution Services Client Disclosure for Registered Dealers and Advisers that are not members of a Self-Regulatory Organization. This Notice provides a sample client disclosure document and guidance regarding the information firms must provide to their clients about the availability of OBSI’s services, internal complaint handling procedures that meet the requirements of the rule.

 The CSA, other than Québec, have entered into a Memorandum of Understanding with OBSI concerning its oversight.