Association responds to CSA proposals for independent dispute resolution service
The Investment Funds Institute of Canada (IFIC) has responded to proposals for a new regulatory framework which will enable an independent dispute resolution service to make binding decisions.
The Canadian Securities Administrators (CSA) proposed in December that investment related disputes should be handled by the Ombudsman for Banking Services and Investments (OBSI) as the designated independent dispute resolution service (IDRS) and asked for feedback.
In its response, IFIC makes several recommendations that includes harmonization across Canada.
“For the dispute resolution system to be fair, efficient and accessible for all Canadian investors, it must be harmonized across all provinces and territories, simplified and streamlined, and have fair processes for both firms and investors,” said Andy Mitchell, President and CEO, IFIC.
IFIC says that OBSI’s compensation cap of $350,000 should not be increased without public consultation and that there should be a statutory right of appeal for those disputes that involve compensation of at least $35,000 unless the investor either stops the process or begins litigation before the IDRS has made its final decision. It says that appeals should be handled by a third party such as a division of the CSA or CIRO.
Additionally, the recommendations include same treatment for both investor and firm regarding the final decision and any mechanisms that follow.
The organization would prefer that the new stage two – review and decision – is not implemented but, if it is, it suggests greater transparency around the process and the senior decision makers’ training and implementation of fairness standards.
IFIC also wants to see a redesign of the complaint handling and dispute resolution process to harmonize and streamline both and improve certainty for all parties while reducing regulatory burden and cost for stakeholders.
