The Canadian Securities Administrators (CSA), Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) recently released the 2020 annual report of the Joint Regulators Committee (JRC), which provides oversight of the Ombudsman for Banking Services and Investments (OBSI). The annual report provides an overview of the JRC's activities in 2020.
Of interest, the annual report notes that of the 456 cases of investment-related complaints during fiscal years 2018 to 2020 that ended with monetary compensation, 31 were settled below OBSI recommendations. According to the annual report, clients have ultimately received about $1.3 million less than OBSI recommendations since 2018. As it was last year, this remains an area of concern, and the JRC intends to continue monitoring client compensation that is inconsistent with OBSI recommendations.
The annual report also highlights a review conducted by staff of the Ontario Securities Commission (OSC), IIROC and the MFDA of a sample of registered firms' websites to assess whether complaint handling processes were consistent with applicable rules. The review identified a number of issues, including with respect to a lack of information regarding a client's right to immediately access OBSI where the client is unsatisfied with the firm's response to a complaint. According to the annual report, firm websites directed clients to firms' internal ombudsmen, which according to the JRC may mislead clients and give them the impression that clients must first contact a firm's ombudsman prior to contacting OBSI. Information about OBSI's services was also not given equal prominence to information about firms' internal ombudsman. The review resulted in the OSC, MFDA and IIROC issuing letters to the relevant firms to ensure compliance. According to the annual report, the OSC, MFDA and IIROC intend to continue monitoring the issue.
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