In addition, the proposals will set clear requirements for dealers to report on activities that could harm customers or the capital markets, such as customer complaints including data breaches, serious violations of IIROC requirements, and serious account-related misconduct.
In addition to setting clear expectations about how firms conduct internal investigations, the proposals will prohibit dealers from using the term “ombudsman” or similar designations for their internal dispute resolution services.
In a joint staff notice last year, securities regulators and self-regulatory organizations issued guidance on not allowing the use of an internal ombudsman to address customer complaints.
“In some cases, it appears that customers are not being given a clear option to use the services of OBSI within the time-limit prescribed by NI 31-103… [T]hey are [effectively] being referred to an Internal Ombudsman, while the deadline for submitting a complaint or initiating a civil action to the Ombudsman for Banking Services and Investments (OBSI) continues to run,” the notice said.
It emphasized that an internal ombudsman should not be held as a “substitute” of OBSI, and should be made available to OBSI, even if the customer has pursued his complaint with the internal entity.
