Calls for harmonized investor redress across Canada as binding decision power evolves
The Securities and Investment Management Association is pressing Canadian securities regulators to refine and standardize the proposed binding-authority model for the Ombudsman for Banking Services and Investments.
SIMA wants to ensure the new regime is both equitable and consistent across all jurisdictions and in a submission filed Monday it applauds the Canadian Securities Administrators’ move to strengthen OBSI but warns that several structural refinements are needed to achieve real fairness.
“We support the CSA’s commitment to enhancing the effectiveness and fairness of investor dispute resolution. Achieving harmonization and transparency in binding decision authority is essential for Canadian investors and the health of our capital markets,” says Andy Mitchell, SIMA’s President and CEO.
Mitchell reiterated SIMA’s push for stakeholder feedback windows: “We also continue to urge the CSA to establish a minimum 90-day comment period for all CSA proposals to ensure stakeholders have the time necessary to provide meaningful feedback.”
Among SIMA’s recommendations:
- Rule harmonization — The association argues the CSA should not allow the binding framework to take effect until all provinces, including Quebec, have enacted the enabling legislation. A staggered rollout could sow confusion and elevated compliance burdens.
- Procedural transparency — To bolster legitimacy, SIMA calls for OBSI to produce decision-making guidelines, maintain a repository of previous binding decisions (with identifying information redacted), and furnish high-level summaries to OBSI’s Oversight Committee.
- Independent adjudicators for larger cases — For disputes above the $75,000 threshold, SIMA supports mandating external decision makers — or a panel — entirely independent of OBSI. Internal OBSI staff (uninvolved in Stage 1) may serve in a non-voting support role, but must not influence outcomes.
- Cost controls and fee impact analysis — Given that improved processes and binding decisions may increase the cost burden, SIMA urges the CSA to quantify the financial impact and keep OBSI’s fees fair and sustainable.
- Limiting forum shopping — SIMA cautions that maintaining the status quo six-year limitation period could allow investors to litigate first and then submit the same complaint to OBSI. They recommend barring duplicate claims across court and OBSI.
SIMA’s submission also stresses the need for a robust “skills matrix” for Stage 2 adjudicators. Its proposal draws inspiration from CIRO’s Excellence Standards, demanding adjudicators have a qualified legal background, investment industry acumen, and procedural experience.
The association says that adjudicators must not only abide by rigorous eligibility criteria but also commit to training, oversight, and public reporting obligations to maintain legitimacy.
