Draft revisions for CSDs concerning the OSBI outlined
The Canadian Securities Administrators (CSA) have proposed a groundbreaking framework for the Ombudsman for Banking Services and Investments (OBSI) to make binding decisions in investment-related disputes. This change aims to modernize the structure of Canada’s capital markets, simplify the complaints process, and provide more certainty and fairness in resolving disputes.
Key features of this new dispute resolution process include:
- Binding Authority: OBSI will have the power to make final, binding decisions on investment complaints, ensuring investors have access to an impartial and efficient resolution process, while giving businesses clarity on claim outcomes.
- Oversight Framework: To balance OBSI’s independence with accountability, the CSA proposes a new oversight model ensuring fair governance and transparency in the dispute resolution service.
- Refined Review Process: For complaints involving compensation recommendations of $75,000 or more, OBSI must appoint external decision makers to review its recommendations before finalizing the decision, enhancing fairness and thoroughness at this higher claim level.
- Simplified and Modernized Process: The framework aims to streamline the complaint handling to reduce complexity and improve the overall experience for investors and businesses in Canada's capital markets.
The proposed dispute resolution process is a two-step mechanism: an investigation and recommendation (Step 1), followed by an optional review leading to a binding decision (Step 2) by OBSI. If either party objects to the recommendation in Step 1, the complaint would proceed to Step 2, where OBSI would review the recommendation and make a final, binding decision.
The consultation period for the Canadian Securities Administrators' proposal ends on September 15, 2025. The Canadian investment services landscape is undergoing a transformation in dispute resolution between investors and brokers, with the aim of creating a faster, clearer, and more reliable dispute resolution mechanism with independent oversight and final decision-making authority vested in OBSI.
- The proposed changes by the Canadian Securities Administrators (CSA) in the dispute resolution process will provide businesses in the finance sector with greater clarity on claim outcomes, as the Ombudsman for Banking Services and Investments (OBSI) will have the power to make final, binding decisions on investment complaints.
- This modernized dispute resolution mechanism, destined to streamline the complaints process in Canada's capital markets, aims to create a more reliable and efficient resolution process for investment-related disputes, offering benefits for both investors and businesses within the finance industry.
