On June 13, 2022, the Independent Evaluation of the Ombudsman for Banking Services and Investments (OBSI) [investments mandate] was released. In accordance with its Terms of Reference and a Memorandum of Understanding between the Canadian Securities Administrators (CSA) and OBSI (the MOU), OBSI must have an independent evaluation for its investment-related complaints function every five years. The purpose of the review, which was conducted by Professor Poonam Puri, was to determine whether OBSI is fulfilling its obligations as outlined in the MOU and whether any operational, budget and/or procedural changes in OBSI would be desirable. We discussed the evaluation late last year in our November Bulletin.

The evaluation report concluded that OBSI had met or exceeded its obligations under the MOU overall. The evaluators were particularly impressed with OBSI’s handling of cases in a timely matter and with the skill and candidness of the case investigators. Mention is also made of significant improvements in operation since the last review in 2016, and that OBSI managed a high case volume during the pandemic without delays in investigations. In addition, OBSI’s reasons for decision were stated to be fair, proportionate and explained in plain language, with conclusions flowing from the evidence.

Despite the positive conclusions, the report does contain 22 recommendations for improvement relating to some of the aforementioned areas. Some of these recommendations relate to a review of its governance structure, to ensure that key stakeholder interests are effectively considered in board oversight and decision making. Specific recommendations are made with respect to the content of closing letters to complainants, such as a clearer description of limitation periods for further action. Still other recommendations relate to OBSI’s identification of systemic issues and indicates that OBSI should report annually on the number of such potential issues it has identified with a generic description, with the goal of working with regulators to issue a public report on what steps have been taken to deal with the potential systemic issues they’ve identified.

The report ultimately suggests that OBSI should be given authority to render binding decisions (with a higher compensation limit of $500K), which would increase legitimacy and be more consistent with international best practices for dispute resolution services.

June 30, 2022