It was déjà vu all over again as the latest independent review of the Ombudsman for Banking Services and Investments (OBSI) recommended this week that OBSI be granted binding authority for its decisions on consumer complaints.
“For international best practice, we cite the financial services ombudsmen scheme in the United Kingdom, Ireland, Australia, New Zealand and Malaysia, which all have the ability to make a decision that is binding on the participating firm if accepted by the consumer,” said the 2026 review on OBSI’s operations, released on Wednesday.
OBSI is required to undergo an independent third-party review every five years. Reviews in 2011, 2016 and 2021 all recommended that OBSI be granted binding authority to make decisions on disputes between investors and firms. The 2026 review was conducted by Australia-based consultancy CRKhoury, and the firm’s principal, Phil Khoury, is a former Australian regulator who reviewed OBSI in 2011, when the recommendation was first made.
As things stand, OBSI investigates disputes between financial services firms (including banks, and mutual fund and investment dealers) and consumers, and makes non-binding recommendations.
However, the Canadian Securities Administrators’ (CSA) consultation on binding authority for OBSI for investment complaints is in play, with the most recent consultation ending last September. The 2026 OBSI review had several comments and suggestions related to binding authority.
The CSA’s latest proposal includes an optional external review process for cases in which OBSI recommends compensation of $75,000 or more.
“We understand the opposition to this model from many consumer advocates who see this as watering down OBSI’s independence and adding an opportunity for unscrupulous firms to use as a delaying tactic,” the review said. “Our view, however, is that the two-stage process provides a good fairness check and is conceptually similar to the two-stage recommendation/decision process used in other jurisdictions, including the United Kingdom, Australia and New Zealand.”
It suggested that the $75,000 threshold be reviewed one year after implementation and also indexed to inflation.
The review also noted criticism from investor advocates over proposed changes related to CSA enhanced oversight of OBSI, with concerns about the potential loss of OBSI’s independence.
“Our view is that some accountability and oversight is important, and we acknowledge that it already exists under the current scheme arrangements,” the review said. “We also think that an oversight framework is essential to the CSA being able to persuade industry firms to accept the proposal.”
Still, OBSI shouldn’t be seen as a government arm or too closely controlled by the regulators, which could potentially result in confusion about who bears responsibility, the review said. It suggested that the proposed oversight framework include clear messaging that the CSA won’t direct OBSI procedural guidelines or methodologies, nor influence OBSI recommendations or decisions.
The review further suggested that OBSI should have binding authority for banking complaints: “[F]or parity, simplicity and because we see no arguable basis for a distinction, we think that OBSI should have binding authority in relation to all complaints.”
OBSI’s 2025 annual report said that on the banking side, firms tend to offer amounts equal to or above the OBSI-recommended amount in cases under $10,000. Low settlements — when consumers settle for amounts less than OBSI recommends — are more common in investment cases with larger recommended amounts.
Instances of low settlements create a “compelling” case for OBSI to have binding authority, the 2026 OBSI review said. It evaluated a handful of low settlements for complex complaints in both banking and investments: “[T]he non-binding nature of OBSI’s authority seemed to pervade the settlement negotiations, creating an unequal playing field and diminishing the efficiency of the resolution process, with the investigator seeking to persuade the firm of the reasonableness of OBSI’s findings, the firm sometimes giving an appearance of tactically extending the investigation timeframe and the complainant sometimes becoming impatient with the elapse of time or fearful of no outcome.” (The review noted that the number of low-settlement cases is low relative to OBSI’s total complaints.)
In a release on Wednesday, the Joint Regulators Committee (JRC) said the review’s findings “are welcome as the CSA advances work on a proposed framework for an independent dispute resolution service with binding authority.” Chaired by Grant Vingoe, CEO of the Ontario Securities Commission, the JRC comprises representatives of the CSA and the Canadian Investment Regulatory Organization, and provides OBSI oversight.
The JRC said it expects registrants to participate in OBSI’s dispute resolution services “in a manner consistent with their obligation to deal fairly, honestly and in good faith with their clients.”
The JRC will continue to meet with OBSI’s staff, as well as meet with the OBSI board later this year, to discuss the report, the release said.
The OBSI upper monetary limit for compensation has been $350,000 since 2002, and the review recommended that the limit be set at $550,000 as soon as reasonably practicable and to introduce automatic indexation every two years. The 2021 review had recommended an increase to $500,000, but it didn’t happen.
“If OBSI’s jurisdictional limit had been adjusted annually to match inflation, it would have been just under $600,000 by now,” the 2026 review said, adding that the $350,000 limit substantially lags OBSI’s counterparts in other jurisdictions. “An adjustment to keep up with actual values says that this is a contemporary ombudsman service that is supported by government and by regulators and is staying relevant to modern financial services.”
Much of the resistance to adjusting the maximum limit comes from small investment firms and dealers, which is “entirely understandable,” the review added.
Overall, the review made 26 recommendations and found that OBSI met most recommendations from the 2021 review.
In examining operational efficiency, the 2026 review found that OBSI was more cost-effective in handling complaints than its counterparts in other jurisdictions. “At a macro level, we found no evidence that OBSI is excessively costly compared to other schemes,” the review said.
Still, OBSI is applying “a range” of measures to target efficiency as it continues to address a surge in complaints. Complaints volume increased to more than 6,000 in 2025 from about 1,100 in 2021. (In November 2024, the federal government designated OBSI as the sole external complaints body for banks.)
“[T]he surge in workload has impacted OBSI’s timeliness and in particular resulted in delay in the last three years in assigning complaints to investigators,” the review said, which recommended a target of 30 days to assign a case to an investigator.
Faced with the increased workload, OBSI’s management is a “significant strength,” the review said, and the senior team is “dealing with the workload pressures and the associated change in a calm, methodical way.”