The Ombudsman for Banking Services and Investments (OBSI) agrees with an independent reviewer’s recommendation that it should have the power to make binding compensation decisions, but rejects the idea of raising compensation limits and altering its board.
OBSI, the investment industry’s dispute-resolution service, published its response on Tuesday to the recommendations of an independent reviewer, former New Zealand Banking Ombudsman Deborah Battell, which was published in June. Overall, the organization says it supports most of the review’s 19 reform recommendations.
Specifically, OBSI endorses the recommendation that it should have the ability to secure redress for customer, rather than simply recommending investor compensation, with no real power to enforce its decisions. The review called for OBSI to be empowered to order binding awards.
“OBSI supports this recommendation, which is consistent with the recommendations of previous external reviews and with our organization’s public position for many years,” the dispute-resolution service’s response says.
Yet, OBSI also notes that it does not have the power to decide to adopt binding compensation decisions. That power resides with the policymakers that oversee the dispute-resolution service, and OBSI says that intends to raise the idea with them.
“Determining an appropriate mechanism by which OBSI’s ability to secure redress for consumers could be increased is a matter we intend to discuss with securities regulators and stakeholders in the months to come, with a view to finding a solution that meets the needs of consumers, regulators and participating firms,” OBSI’s response says.
OBSI also indicates in its response that it supports the reviewer’s recommendations to “adopt a strategic approach to ombudsmanship”; that the organization should improve its transparency; that it should seek a more formal relationship with its Consumer Investor Advisory Council; and that it should enhance communications with the investment industry.
In addition, OBSI says it will be following the recommendation that it should gather information to help understand the impact of any potential change to its limitation period: “We intend to begin gathering this information with a view to potentially revisiting our limitation period in the future.”
In addition, OBSI says it supports proposed improvements to its operational and case management practices: “We will be implementing programs and pilot projects in the coming months intended to streamline case handling, particularly for low complexity matters and to decrease our delay experience.”
The dispute-resolution service also pledges to follow the recommendation for an early advice service for firms, saying that it will implement a pilot project to test this initiative in 2017.
However, OBSI is pushing back against a couple of the review’s recommendations: namely, that the dispute-resolution service should consider increasing its compensation limit and that it should add a consumer advocate to its board.
On the question of compensation limits, OBSI says its current compensation limit “is appropriate for our current mandate and allows us to assist the overwhelming majority of consumers who approach us for assistance.”
In terms of the board’s makeup, OBSI says its existing governance structure was created after a review and “extensive public consultation” in 2012. “In our view, the interests of consumers and the Canadian public in general are well represented by our community directors and independent chair.”
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