current success rate and I’ll be striving to maintain that. We have
an excellent record of acceptance of recommendations from both
firms and complainants.
Although the publication of non-acceptance cases naturally attracts
a great deal of attention when it happens, the reality is that more
than 99% of the thousands of complaints brought to us have been
successfully resolved. And now that the team has worked through
the significant backlog of investment cases brought on by the
financial crisis, we are back to working at optimal levels for our
member firms and their clients. All investment complaints that come
to OBSI are now assigned to an investigator almost immediately,
and our latest data shows that over the past year we have resolved
more than 95% of investment cases within 180 days.
We are absolutely committed to maintaining our performance
standards and delivering high quality analysis as efficiently
as possible. OBSI is committed to being an efficient and cost-effective Ombudservice for the Canadian financial industry.
We treat this responsibility with respect and ongoing diligence.
I recognize we must maintain excellence in our work, strive for
continuous improvement and be ready for future changes in client
volume that naturally result from the cyclical nature of the financial
As Private Capital Markets Participants and Exempt Market
Dealers – what can we expect to see from OBSI in the near future?
In the near future, most importantly, you can expect OBSI’s
continued commitment to resolving complaints efficiently and
effectively for your members and their clients. You can also expect
continued dialogue. Before the amendments to NI 31-103 took
effect, OBSI engaged in significant dialogue with various firms,
PCMA, NEMA and securities regulators, to learn and openly
discuss issues relevant to the exempt market sector.
That dialogue is essential. I see it as a crucial part of building a
strong working relationship with the exempt market industry, and
also part of a constant examination of our processes to determine
how we can become more efficient. Beyond that, in 2016 we will
reach our two-year mark as the dispute resolution service provider
for private capital market firms in Canada.
OBSI’s Board and the securities regulators have agreed, at that
time, to a review of our governance and fee structure. As part of
that review, we will take our collective learnings and make any
necessary adjustments, subject to stakeholder consultation by
What has OBSI’s experience been during its first year of
servicing EMD client escalations?
During this first year, OBSI has only opened a handful of EMD
complaints, so we don’t have a significant sample size to report
trends or broad observations. With the small number of cases we
have seen, the issues involved were similar to the types of issues
we investigate against other sectors, such as investment suitability
and unauthorized transactions, and the products involved were
flow-through limited partnerships and private placements, which
we would expect to see. We’re pleased to share that with all of the
EMD cases closed to date, we were able to close the investigations
within our performance standard of 180 days.
Our investigators are well versed in dealing with exempt product
cases, as a result of their years of experience with our MFDA
members who are dually-licensed. I will say that I was a little
surprised by the low number of cases we have received from the
sector to date. OBSI’s engagement with exempt market members is
new, so perhaps that makes sense, but I would have expected more
cases by this juncture, simply based on the size of the EMD market.
By the two-year mark in our relationship, we should have additional
data to review and assess for insights that we can both benefit from.
How does OBSI view the private capital markets and its unique
mix of products, risk exposures and client relationships?
Although this sector is not new to us – we have investigated
complaints involving exempt products for many years now,
coming from our dually-licensed MFDA members – there are
certainly unique aspects to the exempt market sector. To ensure
our team was up to speed on their knowledge, the entire OBSI
investment investigative team has taken the CCO Education
Series offered by PCMA.
In addition, in advance of your members joining OBSI, many of
our staff members also took specific exempt product courses,
and continue to do so. The team is familiar with the industry as
most of our investigators have worked for investment dealers
before joining OBSI. It’s this combination of experience and
deep knowledge in the sector and its products that make OBSI
well prepared to best resolve any complaints coming from the
exempt market industry.
In the near future, most importantly, you can expect
OBSI’s continued commitment to resolving complaints
clients. You can also expect continued dialogue.