The Investment Industry Regulatory Organization of Canada (IIROC) is seeking feedback on proposed arbitration program reforms designed to create a more viable venue for resolving client complaints.
The industry self-regulatory organization published recommendations that were put forth by a working group of industry, investor advocates and arbitration professionals following a review of the program that was launched in 2020 and wrapped up earlier this year.
The review concluded that, with changes — such as sharply increasing the award limit to $5 million from its current $500,000 cap — the arbitration program could fill a much-needed role in the investor dispute resolution landscape.
The working group found that the arbitration program, which has been around for almost 30 years and was last revised in 2011, could be made “truly viable” with improvements in three key areas: accessibility, costs and procedures.
In addition to increasing the limit on claims, the group proposed changes such as publishing arbitration decisions to improve transparency and confidence in the program, and reducing the time required to commence an arbitration claim (currently 90 days after the client’s complaint, down to 30-45 days).
Alongside the reform recommendations, IIROC is seeking comment on the role of the arbitration program within the existing dispute resolution framework, which includes the courts at one end and the Ombudsman for Banking Services and Investments (OBSI) at the other.
“IIROC is supportive of OBSI. Our intent is for the arbitration program to provide an alternative dispute resolution option for suitable claims, not to draw away from OBSI,” IIROC said in its notice seeking comment on the proposals.
“The arbitration program is distinctive from OBSI and is designed to be an alternative to litigation with a focus on complex and large claims. For that reason, IIROC is considering making the arbitration program available only for claims that fall outside of the OBSI limit,” it added.
The proposed reforms are out for comment until March 6. IIROC said it expects to complete its review of the arbitration program in the first half of 2023.