CSA Invites Comments on Process Refinements and an Oversight Model for a Proposed Dispute Resolution Service for Investor Complaints

Written By Will Osler, Ali Naushahi, Bosa Kosoric and Yuliya Bairamova

The Canadian Securities Administrators (CSA) are asking for comments on a proposed framework to oversee an independent dispute resolution service with binding authority for resolving investor complaints. The authority is expected to be the Ombudsman for Banking Services and Investments (OBSI), which currently helps resolve disputes between clients and financial institutions arising from client complaints.

The CSA proposes an oversight framework to accompany the plan to grant OBSI binding authority. This framework aims to balance preserving OBSI’s independence and ensuring accountability. The CSA's primary aim is to establish a neutral, fair and effective dispute resolution process for resolving investment complaints while offering businesses clarity on dispute outcomes.

The CSA proposal builds on amendments and a request for comment from the CSA in 2023 regarding changes to the complaint handling provisions in National Instrument 31-103—Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103). They also explored potential structural elements of a regulatory framework for the creation of a dispute resolution service with binding decision-making authority. The current CSA proposal includes refinements to the 2023 proposed framework.

The comment period closes on September 15, 2025.

Background

NI 31-103 sets out requirements for registered firms, other than investment fund managers, for handling and responding to client complaints. These generally include making an independent dispute resolution or mediation service available to clients and taking reasonable steps to ensure that OBSI is the ombudservice made available to them. OBSI is an independent, national, nonprofit entity that resolves disputes between banking services and investment firms and their clients. Currently, OBSI reviews complaints and makes recommendations to financial institutions regarding compensation, but it has no formal power or process to require a firm to pay a complainant (although if a recommendation is ignored by a firm, OBSI will publicize the firm's name). As a result, some firms have offered complainants less than the amount recommended by OBSI.

The current CSA request for comment proposes refinements to the 2023 proposed framework and seeks to address certain concerns raised by commenters, including regarding the absence of an external right of appeal. The proposed refinements and oversight model are intended to address these concerns. The CSA aims to keep disputes out of tribunals or courts which would reduce costs, delays and complexity for all parties.

Proposed Oversight Framework

CSA Notice and Request for Comment 25-314—Proposed Approach to Oversight and Refinements to the Proposed Binding Authority Framework for an Identified Ombudservice includes:

• designation or recognition orders that would set out the terms binding OBSI as the identified ombudservice; and
• a Memorandum of Understanding (MOU) among participating CSA jurisdictions setting out how the CSA would oversee and review OBSI. The MOU contemplates an OBSI Oversight Committee and a process for reviewing OBSI’s rules and operations.

The CSA oversight regime requires that OBSI operate in the public interest. The CSA sets out corporate practices and standards, mandates the CSA's approval of OBSI’s key governing documents, sets out mandatory reporting practices and provides for periodic examinations and reviews by the CSA and independent third parties.

Each participating jurisdiction would require enabling legislation to implement the oversight framework.

Proposed Process Refinements

The proposed CSA framework includes a two-stage process for how OBSI would resolve a complaint:

1. the first stage is the investigation and recommendation stage, which follows OBSI's current processes.
2. if a firm objects to a recommendation within a specified time, the process moves to the review and decision stage. At the second stage, a senior OBSI decision-maker, not involved at the first stage, renders a final and binding decision. To ensure compliance, the CSA contemplates that a final decision may be filed with the courts.

The CSA invites comments on the proposed refinements to the second stage. The CSA proposes that if either party initiates a review on claims of C$75,000 or more, OBSI would have to appoint an external decision-maker or panel to review a recommendation before the final decision is made. The external decision-maker is retained on a contractual basis and elected from a roster of industry experts, lawyers and relevant technical experts approved by the CSA. This approach allows the parties to have an external decision-maker issue a binding decision involving substantial monetary compensation, without the need to hire legal counsel or go through a formal appeal process.

The CSA also asks for input on the six-year limitation period that applies to the exercise of OBSI's binding authority.

British Columbia and Québec

The British Columbia Securities Commission (BCSC) supports the project's intended outcomes although they did not participate in the 2023 proposal to grant OBSI binding authority. To inform potential legislative changes of its own, the BCSC welcomes feedback on the oversight framework, the refinements, and OBSI’s limitation period.

In Québec, the Autorité des marchés financiers (AMF) provides dispute resolution services to consumers of financial products and services. Although OBSI would not be recognized as an identified ombudservice, Québec will oversee OBSI’s non-binding services and is also interested in feedback on the current CSA proposal.

Summary

The CSA requests feedback on:

• the appropriateness of the C$75,000 threshold for involving external decision-makers at the second stage of the OBSI review process;
• how these proposed changes, including setting a monetary threshold, might affect accessibility for investors;
• the impact of maintaining OBSI's six-year limitation period; and
• how to best balance OBSI’s independence with its accountability to regulators.

Comments are to be made to local securities regulators. The comment period closes on September 15, 2025.

Bennett Jones would be pleased to assist your organization with submitting feedback on the current CSA proposal.

If you have any questions, please contact a member of the Bennett Jones Capital Markets group.

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