Systemic Issues

OBSI’s approach to systemic issues

In addition to our work investigating and resolving individual complaints, OBSI is uniquely positioned to identify issues that could adversely affect broader groups of consumers or where substantial systemic improvement is possible. Systemic issues can include apparent breaches of laws, regulations, compliance issues and other obligations, but can also be broader in nature, relating to products, trends, conduct or emerging issues that have the potential to affect multiple consumers or a class of consumers.

OBSI uses multiple channels of communication to share our observations of system-level issues. We report broadly to the public and regulators on emerging trends and issues that we observe in our cases. We provide case studies and bulletins to increase public awareness of challenging issues, publish extensive public reporting of case data and trends, and provide regulators with detailed anonymized case data. We also engage in regular formal and informal communications with regulators, industry and consumer leaders to discuss emerging trends, issues and opportunities for systemic improvement.

When we observe systemic issues that may be of specific regulatory interest, we are required to report them to the relevant regulators.

How do regulators define systemic issues?

OBSI works with two regulators – the Financial Consumer Agency of Canada (FCAC) for banking complaints, and the Canadian Securities Administrators (CSA) for investment complaints, each of which define systemic issues and set reporting requirements for their sector:

• FCAC reporting guidance defines a systemic issue as a compliance issue that may:
  • impact multiple consumers or
  • have market-wide implications

Generally, these issues are not isolated in nature and often stem from more widespread procedural or documentation issues.

• The OBSI Systemic Issues Protocol with the CSA defines systemic issues include the following:
  • multiple complaints against one or more registered individuals about products or services provided to investors,
  • multiple complaints against the same registered firm about similar products or services provided to investors, or
  • the same complaint against multiple registered firms in a registration category and/or about similar products or services provided to investors which appear likely to have significant regulatory implications or to raise concerns about the registrant's fitness for registration.

Why do we report systemic issues to regulators?

OBSI is required to report systemic issue to regulators as soon as possible after first identifying them. These reports may help regulators to reduce and resolve potential problems that they may not be aware of and help ensure we have a fair, effective, and trusted Canadian financial services sector.

Can OBSI investigate specific systemic issues?

We do not investigate specific systemic issues. Our role is to identify issues based on the criteria we have been given and to report them appropriately. The FCAC and the CSA determine whether the issue requires further investigation and how to address the issues if needed.