Ombudsman for Banking Services and Investments (OBSI)
OBSI is a free, independent service for resolving investment disputes between participating firms and their clients if they can't solve them on their own. If OBSI decides that a firm has acted unfairly, made an error or given its client bad advice, and the client lost money as a result, OBSI will recommend that the firm restore the client’s financial position to where it should have been. The limit for their recommendations is $350,000.
In December 2013, OBSI announced changes to its terms of reference and to its processes following substantial reforms. The terms of reference describe the principal powers and duties of OBSI, the duties of participating firms, the scope of its mandate and the process of OBSI for receiving, investigating and seeking resolution of financial services customer complaints. The terms of reference are available on OBSI’s website (available in French).
In 2014, amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (Amendments) came into force, which require all registered dealers and advisers, outside of Québec, to use OBSI as the common service provider for dispute resolution services. After August 1, 2014 all registered dealers and registered advisers, outside of Québec1, including portfolio managers, exempt market dealers and scholarship plan dealers, had to make OBSI available to their clients as their dispute resolution provider.
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1In Québec, the Autorité des marchés financiers (AMF) provides a mediation service to those clients of all registered dealers and advisers who reside in Québec. The Québec regime remains unchanged and firms registered in Québec have to inform clients residing in Québec of the availability of the AMF mediation service.
About the Joint Regulators Committee
In conjunction with the passing of the Amendments, the CSA and OBSI signed a Memorandum of Understanding (available in French) which provides an oversight framework for the CSA members and OBSI to cooperate and communicate constructively, and to ensure that OBSI continues to meet the standards set by the CSA. The standards are set out in the Memorandum of Understanding (MOU) and include: 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; transparency; and, information sharing.
The CSA jurisdictions and OBSI agreed with the SROs to form the OBSI Joint Regulators Committee (JRC) with a mandate to:
- facilitate a holistic approach to information sharing and monitor 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.
The Ontario Securities Commission is the current chair of the JRC.
Members and frequency of meetings
The JRC meets regularly with OBSI to discuss governance and operational matters. Members of the JRC are representatives from the CSA (CSA designated representatives are from British Columbia, Alberta, Ontario and Québec ), IIROC and MFDA.
The JRC meets on a regularly scheduled basis, typically four times each year.
As provided in the MOU, the JRC will meet with the Board of Directors of OBSI at least once a year to discuss, among other things:
- material operating issues, including fees, specific to OBSI
- OBSI governance matters
- effectiveness of OBSI’s dispute resolution practices.
Contacting the JRC
You may contact the JRC on any matter relating to the JRC’s oversight of OBSI by email at: ContactJRC-CMOR@acvm-csa.ca
Since its formation in 2014, the JRC has published three Annual Reports on its activities:
- OBSI Joint Regulators Committee Annual Report for 2016 (English)
- OBSI Joint Regulators Committee Annual Report for 2016 (French)
- OBSI Joint Regulators Committee Annual Report for 2015 (English)
- OBSI Joint Regulators Committee Annual Report for 2015 (French)
- OBSI Joint Regulators Committee Annual Report for 2014 (English)
- OBSI Joint Regulators Committee Annual Report for 2014 (French)
2 The Autorité des marchés financiers became a member of the JRC as of December 1, 2015.
Systemic Issues Protocol
Given the removal of the investigation of systemic issues from the OBSI Terms of Reference, the Memorandum of Understanding provides for reporting by the Chair of OBSI's Board of Directors about issues that appear likely to have significant regulatory implications, including issues that appear to affect multiple clients.
In 2015 the JRC finalized with OBSI a protocol to define potential systemic issues and to set out a regulatory approach to address these issues when reported by OBSI.
The Memorandum of Understanding requires that an independent review of OBSI's operations and practices on the investment side of OBSI’s mandate commence within two years of the Amendments (that is, by May 1, 2016). Following the issuance of a Request for Proposal, OBSI’s Board of Directors appointed Deborah Battell of Headway Consulting to be the evaluator. Consultations with stakeholders took place in the early part of 2016 and a final report with findings and recommendations was issued on June 6, 2016.
- Independent Evaluation of the Canadian Ombudsman for Banking Services and Investments’ (OBSI) Investment Mandate (English)
- Independent Evaluation of the Canadian Ombudsman for Banking Services and Investments’ (OBSI) Investment Mandate (French)
On June 6, 2016 the JRC issued a statement in response to the release of the independent review expressing support for OBSI as the dispute resolution service, and setting out the Committee’s next steps in reviewing and analyzing the report’s findings and recommendations.
On December 7th, the Canadian Securities Administrators (CSA), Investment Industry Regulatory Organization of Canada (IIROC) and Mutual Fund Dealers Association of Canada (MFDA) released a joint Notice that highlights concerns about some registered firms’ complaint handling systems and participation in OBSI’s services, and sets out potential regulatory responses. The notice also outlines staff’s concerns regarding the use of an internal “ombudsman” as part of complaint handling systems.
- Joint CSA Staff Notice 31-351, IIROC Notice 17-0229, MFDA Bulletin #0736-M Complying with requirements regarding the Ombudsman for Banking Services and Investments (English)
- Joint CSA Staff Notice 31-351, IIROC Notice 17-0229, MFDA Bulletin #0736-M Complying with requirements regarding the Ombudsman for Banking Services and Investments (French)
OBSI Annual Reports
You also may wish to review OBSI’s Annual Report for its fiscal year 2016:
For additional information on OBSI and its role in resolving disputes between investment firms and their customers, please go to OBSI.ca.