Canadian Securities Administrators calls for comment on binding regime for investor-related dispute

CSA is accepting comments from the public until February 28, 2024

Canadian Securities Administrators calls for comment on binding regime for investor-related dispute

The Canadian Securities Administrators (CSA) is seeking comment on a proposed regulatory framework for an independent dispute resolution service with binding decision-making powers.

Under the proposed framework, the Ombudsman for Banking Services and Investments (OBSI) would be the designated or recognized entity for dispute resolution services within the investment industry. The proposed regulatory changes also involve amendments to complaint handling provisions under Canadian securities law.

The CSA seeks comments from industry and retail clients on the proposed changes to the regulatory framework. Stan Magidson, CSA chair and CEO of the Alberta Securities Commission, expressed the CSA's commitment to refining the system of redress available to Canadian investors in the event of disputes with their investment firms. Magidson emphasized the importance of soliciting feedback from industry professionals and retail clients to ensure a comprehensive and informed approach to the ongoing development of the regulatory regime.

Registered dealers and advisers outside Quebec are obliged to provide clients with access to OBSI as a dispute resolution service, but OBSI lacks the authority to issue binding decisions. In developing the proposed framework, the CSA considered various public reports, consultations and reviews contemplating the benefits of giving OBSI binding authority.

The CSA has initiated a 90-day comment period and invited stakeholders to provide written comments by February 28, 2024. The CSA is seeking general feedback on several structural elements of the proposed framework, including questions for stakeholder consideration.

While the British Columbia Securities Commission (BCSC) supports the project's intended outcomes, it is not currently participating in the proposal for comment on rule amendments. British Columbia is exploring legislative changes that align with the proposed framework. The BCSC is interested in feedback on the proposed framework and will consider comments.

In Quebec, the Autorité des marchés financiers (AMF) already provides dispute resolution services, conciliation and mediation services to consumers of financial products and services. The AMF is participating in the CSA consultation, proposing to maintain the exemption applicable to firms registered in Québec regarding dispute resolution services requirements. The CSA Notice and Request for Comment is available on CSA members' websites.

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