New Regulation respecting the handling of complaints and the resolution of disputes in the financial sector: towards a standardization of practices

On February 15, the Autorité des marchés financiers (the “AMF”) published the final version of the new Regulation respecting the handling of complaints and the resolution of disputes in the financial sector (the “Regulation”)¹. The Regulation, whose stated purpose is to enhance and standardize the fair handling of complaints across the financial sector, will come into force on July 1, 2025².

The Regulation applies to all financial institutions and intermediaries subject to the AMF’s supervision, as well as to credit assessment agents. Section 4 of the Regulation defines financial intermediaries as “any person or partnership registered as a firm, independent partnership or independent representative under the Act respecting the distribution of financial products and services” and any “person registered as a dealer or adviser under the Derivatives Act or the Securities Act”.

The obligation to adopt a complaint-handling policy and to keep a register of complaints is not new: each of the sectoral statutes under which the Regulation is enacted already provided for it. Rather, the new feature of the Regulation relates to the manner in which complaints are to be handled. In this sense, it complements the sectoral laws and the guidelines adopted under them. The provisions of the Regulation will therefore be added to the general obligations already in force in order to clarify their application.

With respect to financial intermediaries, Chapter II³ of the Regulations will harmonize their obligations with those of financial institutions and credit assessment agents by providing a framework similar to that established by the guidelines applicable to financial intermediaries. The Regulation will thus be in addition to sections 168.1.1 and following of the Securities Act in order to provide for the manner in which complaints must be received and assigned for processing.

Investment dealers and mutual fund dealers that are members of the Investment Regulatory Organization of Canada will be exempt from the application of the Regulation, to the extent that they are subject to equivalent rules adopted by that body and approved by the AMF⁴. However, it should be noted that these dealers will be subject to the Regulation for any other activity they are authorized to engage in by virtue of being registered in another capacity.

Complaints: what does the Regulation cover?

Section 3 of the Regulation defines a complaint as:

“any reproach or dissatisfaction in respect of a service or product offered by a financial institution or a financial intermediary where the reproach or dissatisfaction is communicated by a person who is a member of the clientele of the financial institution or financial intermediary and a final response is expected.”

This definition also applies to credit assessment agents, “where the reproach or dissatisfaction is communicated by any person concerned by a record that the credit assessment agent holds.”

The Regulation specifies that a final response is expected when the complainant’s communication explicitly or implicitly implies that action must be taken to address the complaint.

The Regulation specifically provides what does not constitute a complaint:

• a request made for information or materials in respect of an offered product or service;

• a request for access or rectification made in accordance with the Act respecting the protection of personal information in the private sector;

• a claim for an indemnity or any other insurance claim;

• a request for correction of a clerical error or mistake in calculation, except those requiring further action to address the consequences of the error or mistake⁵;

• communication of a comment or feedback.

The person subject to the Regulation is responsible for distinguishing between the communications received that constitute complaints within the meaning of the Regulation. This responsibility could present some challenges, particularly considering that the complainant does not have to expressly indicate in the communication that he or she wishes to obtain corrective action or that it is a complaint in order for it to be treated as such⁶.

Increased obligations: assisting the clientèle in formulating complaints

The Regulation sets out a series of specific obligations for financial institutions, financial intermediaries and credit assessment agents. These obligations notably include:

• Draft any disclosure document relating to complaint processing and dispute resolution in a form that is clear, readable, specific and not misleading;⁷

• Ensure that staff use clear and plain language in any interactions with complainants;⁸

• Take the necessary actions to understand what is being communicated to it and, when necessary, provide assistance to the person making the complaint⁹. This implies being diligent and sometimes going beyond the mere text of communications received to try to understand the real need that the complainant is trying to express and help them move forward with their complaint;

• When a complaint received may have repercussions on other persons who are part of its clientele, it must take the necessary actions to address the complaint.¹⁰

• When a complaint received concerns several institutions, intermediaries or agents, so inform the complainant and of the complainant’s right to file a complaint in respect of those institutions, intermediaries or agents and provide the complainant with any information held by it that would allow the complainant to communicate with them¹¹.

Handling of complaints

Section 14 of the Regulation sets out the manner in which and the time within which a complaint received must be dealt with. Financial institutions, financial intermediaries and credit assessment agents will thus be required to:

1. Establish a complaint file containing all the documents listed in section 18 of the Regulation in order to properly document the handling of the complaint;

2. Enter the complaint in their complaints register;

3. Send the complainant an acknowledgement of receipt;

4. Provide the complainant with a final response concerning the complaint received.

New for financial intermediaries: they will now have to designate a person responsible for handling complaints who will supervise the work of staff members assigned to handle complaints received¹². For financial institutions and credit assessment agents, this obligation is already set out in the guidelines applicable to them.

The Regulation provides that a final response must be given within 60 days of receipt of the complaint¹³, unless there are exceptional circumstances or circumstances beyond the control of the person subject to the Regulation, in which case the final response must be provided within a maximum period of 90 days¹⁴. This is an important new feature because, while the various guidelines applicable in this area already provided that complaints must be dealt with expeditiously, this is the first time that the AMF has established a strict deadline to be respected. In addition, the rules of the CIRO on the handling of complaints provide that the complaints must be processed within a maximum of 90 days. Since the Regulation provides that the broker members of CIRO will be exempt from its application to the extent they are subject to equivalent rules adopted by that body, it will be interesting to see if and how CIRO will modify its rules, particularly in order to harmonize them with the time limit for handling complaints provided in the Regulation.

Financial institutions, financial intermediaries and credit reporting agents will need to exercise caution and ensure that they properly document the complaint file when the 60-day deadline is exceeded, in order to ensure that they can justify the additional time required to provide a final response. Failure to comply with this obligation will be punishable by a monetary administrative penalty of $1,000 for financial institutions and credit assessment agents or prosecution before the Financial Markets Administrative Tribunal for financial intermediaries.

Where the final response contains an offer to resolve the complaint, the financial institution, financial intermediary or credit reporting agent will be required to give the complainant a “reasonable amount of time” to assess and respond to the offer¹⁵. The Regulation does not indicate what constitutes a reasonable amount of time. However, it specifies that this period must allow the complainant to seek advice for the purpose of making an informed decision, if he or she so wishes¹⁶.

If the complainant accepts the offer, the financial institution, financial intermediary or credit reporting agent must give effect to the offer no later than 30 days after the offer is accepted¹⁷. However, this period may be extended, with the consent of the complainant, if justified by the latter’s interest.

However, providing a final response to the complainant does not automatically end the process. The financial institution, financial intermediary or credit reporting agent will have to continue to manage additional exchanges with the complainant, as the case may be, in particular to allow the complainant to submit new facts relevant to the processing of the complaint, to answer the complainant’s questions or to follow up on the comments made, “until no other actions are required in respect of the complaint.” Since the Regulation does not specify when no further actions are required, it will be prudent, once again, to properly document the handling of the complaint in order to be able to demonstrate, in the event of an inspection by the AMF for example, that all the measures reasonably expected in the circumstances have been taken.

Accelerated handling of certain complaints

Some complaints may be dealt with in a simplified manner. These are ones that can be resolved to the satisfaction of the complainant within 20 days of receipt, either because the complainant accepts the offer presented or because he or she accepts the outcome of the complaint process¹⁸.

Where a complaint can be dealt with in a simplified manner, the reasoned conclusion of the analysis of the complaint and its handling, as well as the offer to settle the complaint, if any, may be communicated orally or in writing¹⁹. The complaint file may then contain a summary of the information orally communicated to the complainant²⁰.

If the complaint cannot be resolved to the satisfaction of the complainant, a written acknowledgement of receipt in accordance with the requirements of section 22 of the Regulation must be sent no later than the twentieth day following receipt of the complaint²¹. The standard complaint handling process will then have to be followed.

Application and enforcement of the Regulation

In order to ensure the Regulation is applied, sections 34 to 36 of the Regulation provide for monetary administrative penalties ranging from $1,000 to $5,000 depending on the nature of the non-compliance.

Thus, generally speaking, failure to comply with the rules for establishing a complaint file and to provide the complainant with the information set out in the Regulation will result in a penalty of $1,000²².

Failure to comply with the deadline to give effect to an agreement with the complainant or to keep a complaint file will be punishable by a penalty of $2,500²³. Finally, contravening the rules governing the formulation of an offer may result in a penalty of $5,000²⁴. Among other things, these rules prohibit adding conditions to an offer to prevent the complainant from communicating with the AMF, a self-regulatory organization in the financial sector, or with the Chambre de la sécurité financière or the Chambre de l’assurance de dommages.

These monetary administrative penalties will only apply to financial institutions and credit assessment agents. Financial intermediaries, for their part, are subject to the jurisdiction of the Financial Markets Administrative Tribunal. This will allow it to impose any administrative penalties it deems appropriate in the circumstances, subject to a maximum of $2 million. However, it is reasonable to believe that in the event of a breach of the Regulation, the Financial Markets Administrative Tribunal will impose a penalty similar to those provided for in the Regulation.

Conclusion

Although it introduces some new features, the main effect of the Regulation is to specifically incorporate certain expectations of the AMF’ guidelines and to harmonize certain complaint-handling practices in the financial markets industry. As a result, financial institutions, financial intermediaries and credit reporting agents will be subject to similar obligations in order to ensure fair treatment of consumers and diligent handling of complaints received.

Financial institutions, financial intermediaries and credit reporting agents should review their complaint handling policies in the coming months in order to bring them into compliance with the new requirements in preparation for the coming into force of the Regulation on July 1, 2025. For any questions or advice, please do not hesitate to contact our team who will be happy to assist you.

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¹ Adopted under the Credit Assessment Agents Act (c. A -8.2), the Insurers Act (c. A -32.1), the Act respecting financial services cooperatives (c. C -67.3), the Act respecting the distribution of financial products and services (c. D -9.2), the Deposit Institutions and Deposit Protection Act (c. I -13.2.2), the Derivatives Act (c. I -14.01), the Trust Companies and Savings Companies Act (c. S -29.02) and the Securities Act (c. V -1.1).
² S. 38 of the Regulation
³ This chapter applies only to financial intermediaries, as defined in section 4 of the Regulation, excluding financial institutions and credit assessment agents.
⁴ S. 37
⁵ S. 3, para. 5
⁶ The words “explicitly or implicitly” used in the third paragraph of section 3 cover a broad range of possible communications, having the effect of preventing complaints from being dismissed.
⁷ S. 11
⁸ S. 11
⁹ S. 12
¹⁰ S. 13
¹¹ S. 17
¹² S. 8
¹³ S. 14 (4)
¹⁴ S. 14 (5)
¹⁵ S. 15
¹⁶ S. 15, para. 2
¹⁷ S. 15, para. 3
¹⁸ S. 25
¹⁹ S. 27
²⁰ S. 29
²¹ S. 28
²² S. 34
²³ S. 35
²⁴ S. 36