- in Canada
- with readers working within the Banking & Credit and Oil & Gas industries
- within Intellectual Property, Consumer Protection, Food, Drugs, Healthcare and Life Sciences topic(s)
- with Senior Company Executives, HR and Finance and Tax Executives
Earlier this summer, the Canadian Securities Administrators (CSA) released a consultation, CSA Notice and Request for Comment 25-314 – Proposed Approach to Oversight and Refinements to the Proposed Binding Authority Framework for an Identified Ombudservice, on a proposed framework for an independent dispute resolution service, expected to be the Ombudsman for Banking Services and Investments (OBSI). The consultation includes a proposed oversight model.
The framework would include a two-stage process for resolving a complaint. The first stage would involve the investigation (using an inquisitorial approach) and a recommendation made by OBSI. The recommendation would become binding after being accepted by the complainant and the firm, or at the end of the acceptance period if the firm did not object to it and the complainant accepted or did not reject the recommendation. The second stage would be a review and decision conducted by OBSI under certain circumstances. If the complainant initiated the stage 2 review, then the decision would be final and binding on both parties once issued, otherwise the complainant can accept or reject the decision within a specified time. A final decision may be filed as a court order if a firm fails to comply with the final decision.
As a change to the initial consultation which occurred in 2023, the CSA is now proposing that for complaints over $75,000 that move to a stage 2 review, OBSI will have to appoint external decision makers to review its recommendation before reaching a final decision. This is instead of the original proposal which contemplated using a senior internal decision maker from OBSI who was not involved in the initial recommendation. These external decision makers would be retained by OBSI on a part-time basis, on a roster that would be approved by the CSA. The intention is for these individuals to receive the same training as persons employed directly by OBSI.
The notice indicates that an enhanced oversight regime of OBSI would require that OBSI operate in the public interest, meet certain corporate governance standards set by the CSA, have the CSA approve OBSI's key governing documents, require robust reporting practices, and examinations by the CSA against OBSI's obligations. Certain changes would require pre-approval by the regulators, including the delegation of any of OBSI's responsibilities, the process for a firm to become a member of OBSI as well as OBSI's loss calculation methodologies. OBSI would be expected to notify the OBSI Oversight Committee of significant events, such as any potential material violations of applicable securities legislation.
Many CSA jurisdictions will require legislative amendments to enable the proposed framework, including the oversight framework. While the British Columbia Securities Commission is not participating in the part of the consultation involving CSA oversight of OBSI, British Columbia is considering legislative changes that may achieve the same outcome. In Québec, the Autorité des marchés financiers proposes to maintain the exemption applicable to firms registered in that province for the dispute resolution requirements under National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. OBSI's non-binding services would remain available to retail investors in Québec.
The comment period on this consultation closed on September 29, 2025.
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.
