Canada: New Requirements For Financial Institution

Last Updated: December 10 2013
Article by Brett Kenworthy


On September 2, 2013, new regulations and commissioner's guidance from the Financial Consumer Agency of Canada (the "FCAC") came into effect. These regulatory frameworks impose three overarching changes: (i) guidance with respect to the creation and operation of internal dispute resolution practices and procedures of federally regulated financial institutions ("FRFIs"); (ii) enhanced oversight requirements for external complaints bodies that provide services to banks listed in Schedule I and II of the Bank Act, as well as authorized foreign banks (which are the subject of an order under subsection 524(1) of the Bank Act) (collectively, "Banks"); and (iii) additional dispute resolution reporting requirements for Banks. As a result of these amendments, all FRFIs should review internal dispute resolution practices and procedures to ensure compliance, and each Bank should additionally ensure that the external complaints body to which it is a member has been approved by the Minister of Finance.

(i) Internal Dispute Resolution

The intention under the legislation and new FCAC commissioner's guidance appears to be that the vast majority of complaints made by a person (the "Complainant") be handled internally and that external complaints bodies operate only as a last resort. While FRFIs are already required by legislation to have dedicated personnel and procedures in place to attempt to resolve such complaints, the FCAC commissioner's guidance, CG-12 Internal Dispute Resolution (the "IDR"), provides direction to FRFIs with respect to expectations for compliant internal dispute resolution policies and procedures. The three guiding principles of the IDR are: (1) effectiveness; (2) efficiency; and (3) accountability.

(1) Effectiveness

FRFIs must demonstrate that internal dispute resolution policies are designed to achieve a successful resolution to customer complaints. In the IDR, the FCAC commissioner indicates that it will evaluate effectiveness upon four criteria: (1) organizational commitment; (2) adequate resources; (3) training for staff and (4) monitoring and reporting systems. These criteria are examined in depth in the IDR. The underlying focus of the FCAC's evaluative metrics appear to emphasize that FRFIs commit to the independence, impartiality and ability of dispute resolution staff to deliver proper resolution to a complaint, while retaining complaint data in an accessible form.

(2) Efficiency

In the IDR, the FCAC emphasizes that efficiency is the timely resolution of disputes. However, the IDR is equally focused upon the transparency of FRFIs' process and encourages communication at important milestones with respect to the anticipated timeline and progress of the complaints. The IDR also identifies the necessity of educating a Complainant on how to raise a complaint that was not resolved satisfactorily to an external complaints body.

(3) Accountability

FRFIs can demonstrate accountability by providing accessibility and transparency for a Complainant submitting to the internal dispute resolution process. Legislation requires that FRFIs disclose their complaint-handling procedures: (i) in brochures; (ii) on their website; and (iii) in writing, upon request. Additionally, the FCAC has indicated it will consider written policies and procedures with relation to internal dispute resolution issues to demonstrate an overall commitment to accountability.

(ii) External Complaints Bodies

Where the internal dispute resolution process fails to resolve the complaint to the satisfaction of the Complainant, it can be brought before an external complaints body for determination. By law, every FRFI must be a member of an external complaints body and this has not changed. It would appear that the intention behind creating such external complaints bodies is to enhance the transparency and efficacy of the complaint process of FRFIs, as well as to enhance a potential Complainant's knowledge of and access to a process designed to be impartial. However, the Complaints (Banks, Authorized Foreign Banks and External Complaints Bodies) Regulations, S.O.R./2013-48 (the "Regulations") now impose an additional requirement that Banks be members of an external complaints body approved by the Minister of Finance. The Regulations serve two purposes: (1) to increase the requirements of external complaints bodies with member Banks; and (2) to impose additional reporting requirements upon Banks.

The Regulations require that Banks provide a Complainant with the necessary information to submit a complaint, as well as any information necessary to enable the complainant to meet the requirements of its dispute resolution procedures. The Regulations specifically state that "all information ... must be provided in language that is clear, simple and not misleading." The Regulations also require that each Bank displays and makes available to the public (at all locations where business with the public is carried on and where it opens or initiates the opening of retail deposit accounts) copies of a written statement disclosing the name and contact information of the external complaints body of which it is a member. Additionally, once notification of a complaint is provided by a Bank's designated external complaints body, the Bank must cooperate by providing without delay all relevant information in their possession or control.

While outside of the scope of this article, the FCAC commissioner's guidance CG-13 Application Guide for External Complaint Bodies serves to clarify how external complaints bodies may submit an application and receive approval from the Minister, upon the recommendation of the commissioner of the FCAC. The FCAC will ensure the compliance of the external complaints bodies.

(iii) Reporting Requirements

Banks' policies and procedures must demonstrate how it will adhere to the Regulations. An additional requirement imposed by the Regulations includes that Banks must identify the most senior position authorized to resolve such complaints. The Regulations require that Banks disclose: (a) the number of complaints dealt with by the most senior officer or employee designated by the bank for such a purpose; (b) the average length of time spent for the senior officer or employee to address complaints; and (c) the number of complaints that were resolved by the senior officer or employee, in accordance with the Bank's procedures, to the satisfaction of the Complainant. In order to disclose this information, the Regulations require that Banks use an appropriate format to publicly report such information on an annual basis (for example, its inclusion in an Annual Report, Public Accountability Statement, etc.).


There are a few action points that can be taken from the newly effected changes to the regulatory framework. First, all FRFIs should review internal dispute resolution practices and procedures to ensure compliance with the IDR. Second, each Bank should ensure that the external complaints body to which it is a member applies under subsection 455.01(1) of the Bank Act and is approved by the Minister of Finance. Furthermore, it is important that each Bank reviews whether its policies and procedures comply with the disclosure requirements, with respect to: (i) the disclosure and availability of contact information for its external complaints body to its customers; and (ii) the provision of information in its possession or control when requested by the external complaints body. Finally, Banks must update the necessary policies and procedures to comply with the additional annual reporting requirements.

* Assisted by Jami Makan, a summer student at the firm, and by Graham Topa, an articling student at the firm.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Brett Kenworthy
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions