Two business men shouting through megaphones

Investor advocates are calling on Canadian securities regulators to act on an independent reviewer’s recommendations for fundamental reform at the Ombudsman for Banking Services and Investments (OBSI), including that it be given binding decision-making authority.

The Canadian Foundation for Advancement of Investor Rights (FAIR Canada), the Public Interest Advocacy Centre, CARP, and Kenmar Associates on Monday issued a letter to the OBSI Joint Regulators Committee (JRC) urging the commitee to make public its response to a series of reform recommendations in the June 2016 report of Deborah Battell.

The Battell report concluded that, although OBSI is performing well within the confines of its current mandate, it does not meet the definition of a genuine ombudservice because it lacks the authority to impose its compensation decisions on investment industry firms.

Among other things, the Battell report recommended that OBSI be given the power to make binding investor compensation recommendations.

Along with a public response to the recommendations from the OBSI JRC — which is made up of the Canadian Securities Administrators, the Investment Industry Regulatory Organization of Canada, and the Mutual Fund Dealers Association of Canada — the advocates also call on the JRC to report on the “specific work” that it has done to respond to the report’s recommendations, and the committee’s timeline for action.

“The Battell report was delivered more than 18 months ago and, as noted above, while the JRC has been engaged in these issues, it has provided little public information about the details of its deliberations or work. We urge the JRC to make public its response to the recommendations of the Battell Report and the work you are doing to further them, especially with regard to changes required that will enable OBSI to actually secure redress for investors in Canada. Additionally, we urge the JRC to indicate its expected timeline to actionize the recommendations,” the groups say in their letter.

Moreover, the groups maintain that, “action is long overdue to provide OBSI with power to issue binding decisions as this is critical to the integrity of the Canadian financial services market and the protection of Canadian consumers.”

Giving OBSI the power to impose its decisions would empower clients to reject “low-ball” settlement offers, and provide investment industry firms with a greater incentive to make fair offers, they say.

“We urge the JRC to act now with respect to the recommendations of the Battell Report in a manner that empowers OBSI to actually secure redress for Canadian investors,” the letter says. “These actions are essential to improving retail investor protection and increasing confidence in Canadian capital markets.”