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Originally published: October 21, 2016
Grant Vingoe is a Vice-Chair of the Ontario Securities CommissionOntario Securities Commission An independent Crown corporation that is responsible for regulating the capital markets in Ontario. Its mandate is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in capital markets, and to contribute to the stability of the financial system and the reduction of systemic…+ read full definition (OSCOSC See Ontario Securities Commission.+ read full definition) and also serves as Chair of the Ombudsman for Banking Services and InvestmentsOmbudsman for Banking Services and Investments A national, independent and not-for-profit organization that helps resolve disputes between consumers and financial services firms when they can’t come to a resolution on their own.+ read full definition (OBSIOBSI See Ombudsman for Banking Services and Investments.+ read full definition) Joint Regulators Committee (JRC). The Investor Office sat down with Grant to discuss his position, the role of OBSI and the work of the JRC.
I joined the OSC in August 2015 as Vice-Chair. Before that I was practicing at Norton Rose Fulbright in New York, where I specialized in Canada–US securities regulations both in corporate finance and with work related to registrants.
As Vice-Chair, I’ve been very active in adjudication and I find that to be an extremely useful experience for policy-making as well. It allows me to see first-hand the types of challenges faced by investors and the effects that wrongdoing by some respondents can have on investors’ lives. I think what makes the OSC Vice-Chair experience so unique is the opportunity to participate in adjudication and to be able to see issues from both the perspective of the firms and their effect on investors.
On the role of an OSC Commissioner and Vice-Chair…
Part-time Commissioners perform an oversight role for the OSC that you would expect from a board of directors, perform an adjudicative role and participate in rule-making and policy formulation.
A Vice-Chair is also a Commissioner, but Vice-Chairs hold full-time positions that typically have responsibilities such as the sponsorship and advancement of specific policy projects. We participate as executive members of the management team with the Chair and the Executive Director and act as a bridge between the Commission and management. We don’t manage the organization but we participate in formulating its priorities and directions.
On OBSI’s role…
The Ombudsman for Banking Services and Investments was originally a service created by the banks, and later the securities firms, to provide an appeal process of sorts to handle internal customer complaints. Over time its mandate has become formalized and the Canadian Securities Administrators (CSA)Canadian Securities Administrators (CSA) The Canadian Securities Administrators (CSA) is an umbrella organization of Canada’s provincial and territorial securities regulators whose objective is to improve, coordinate and harmonize regulation of the Canadian capital markets+ read full definition has given it exclusive status as the ombudsman service for the securities industry.
OBSI provides investors with a way to seek redress for losses that they’ve experienced when the processes operated by securities firms has failed them. Within certain monetary limits and types of cases, an aggrieved customer can go to OBSI and have their claim for redress investigated. OBSI will provide the financial institution with a recommendation regarding whether or not compensation should be awarded and if so, in what amount.
On the OBSI Joint Regulators Committee (JRC)…
The JRC was established in 2013 after the CSA and OBSI entered in to Memorandum of Understanding which creates a framework for oversight. The role of the JRC is to ensure that OBSI is meeting its obligations to the CSA as outlined in the Memorandum of Understanding. The JRC meets quarterly with OBSI to discuss governance and operational matters, and we also have an annual meeting with its Board of Directors.
The JRC includes members from Ontario, British Columbia, Alberta and Quebec, the Mutual FundMutual fund An investment that pools money from many people and invests it in a mix of investments such as stocks and bonds. A professional manager chooses investments that match the fund’s goals for risk and return. You can redeem your fund units at any time.+ read full definition Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC)Investment Industry Regulatory Organization of Canada (IIROC) National self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.+ read full definition. It’s a good forum to address investor redress and how OBSI has been functioning.
The MOU between OBSI and the CSA calls for a periodic independent review. The most recent review was conducted in May and the final report made a number of recommendations. Among them is the issue of empowering OBSI to secure redress for investors. Right now OBSI’s primary tool is “name and shame,” which involves publishing the name of the firm and circumstances of the case in which the firm has refused to adhere to OBSI’s recommendations. The JRC is looking at this issue along with other recommendations.
On why securities regulators need to consider investor redress…
When you look at the OSC’s mandate in terms of investor protection, there are many different mechanisms in place to seek compliance with rules and regulations and enforcement in the event of non-compliance. Investor redress is more complicated for securities regulators. Whatever rules we develop and however we decide to enforce them, it’s important to provide a forum for investors to seek redress from firms. If this wasn’t in place, an important aspect of investor protection would be ignored. OBSI is important in helping to fulfill regulators’ investor protection mandate.
In addition, maintaining the integrity of markets requires people to have confidence in the outcomes. OBSI plays an important role in building investor confidence in financial markets.
Any final thoughts?
Sarah Bradley is the current Ombuds and a former Chair of the Nova Scotia Securities Commission. It has been a pleasure working with her. She knows the file and the players and is committed to strengthening OBSI and enhancing its ability to help investors.
Based on the discussions that resulted from the recent independent evaluation and the JRC’s meeting with OBSI’s board, personally, I am more committed than ever to move forward with strengthening OBSI’s ability to secure redress for harmed investors.
For more information on Grant’s background, read his bio here.