C. The Ombudsman for Banking Services and Investments (OBSI)

• Author: M.H. Ogilvie
• Profession: LSM, B.A., LL.B., M.A., D.Phil., D.D., F.R.S.C. Of the Bars of Ontario and Nova Scotia Chancellor's Professor and Professor of Law, Carleton University
• Pages: 406-407

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OBSI evolved from the previous CBO office first established in 1996 under the direction of the CBO Ombudsman, who continued as OBSI Ombudsman. Its role expanded in 2002 to provide dispute resolution for customers of investment dealers, investment funds, and mutual funds, as well as banks, and the membership base expanded from thirteen banks to over five hundred other financial institutions, including domestic and foreign banks. OBSI is a not-for-profit corporation composed of its board of directors and members. Its constitution is set out in its Terms of Reference,¹²which are largely unchanged from the Terms of Reference for the CBO.

There are fourteen directors, of whom eight are independent directors who are not affiliated in any way with the financial services industry, although all are knowledgeable about the sector. The independent directors are chosen on the basis of reputation and diversity, and the six other board members come from the financial sector, two from each of the Canadian Bankers Association (CBA) and the Investment Dealers Association of Canada (IDA), and one from each of the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Funds Institute of Canada (IFIC). The directors are elected for three-year, staggered terms, and the independent directors are paid an annual fee and additional amounts for each meeting attended. The independent directors are a specific committee of the board with special powers to act as a nominating committee, recommend candidates for Ombusdman, and review the budget, and they must form the majority in all board committees. The board approves the annual budget, determines the Terms of Reference, and evaluates the performance of the office itself. The Ombudsman acts independently of the board in resolving disputes but reports to the board on the operation of the office.

The board appoints the Ombudsman¹³for a term of up to five years, and the Ombudsman may be reappointed. The Ombudsman must never have been a government employee and must not have worked

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with a participating financial services provider for five years prior to appointment. The Ombudsman may be removed for cause by 75 percent of the board, provided that the vote includes a majority of the independent directors. While the Ombudsman makes the final decision about complaints brought to the office, with no appeal to the board, the board establishes and monitors OBSI standards for complaint handling...