The Ombudsman for Banking Services and Investments (OBSI) is seeking input from stakeholders and the public in relation to our approach to calculating investor losses in cases involving unsuitable sales of illiquid exempt market securities. This consultation is focused on assessing the process we currently use and helping us determine whether there are better alternative approaches we should adopt in such cases. This consultation was recommended in our 2021 independent expert external review. OBSI remains committed to improving its approaches and practices wherever possible.

The questions below are set out in the consultation document. The public comment period for this consultation closes on November 21, 2024.

All comment boxes allow for up to 20,000 characters.

Question Title

* 1. Please complete your contact information below. OBSI may reach out to you to confirm the accuracy of your submission. All responses will be published.

Question Title

* 2. For loss calculations involving unsuitable illiquid exempt market securities for which no ending value can be determined, is OBSI’s approach of assigning a value of zero and requiring the investor to return the unsuitable illiquid exempt market securities to the firm fair and reasonable?

Question Title

* 3. Please expand on your answer above. Are there any alternative approaches that we should consider?

Please answer the next two questions keeping the following statement in mind.
If we maintain our general approach of assigning a value of zero to unsuitable illiquid exempt market securities when a value cannot be determined and requiring investors to return these securities to firms as part of any settlement:

Question Title

* 4. Are there exceptional situations or specific circumstances where such an approach should not be used?

Question Title

* 5. Are there any other considerations or steps that we should take in the recommendation and settlement process that would improve the fairness of outcomes for consumers and/or firms in cases where illiquid exempt market securities have been unsuitably sold?

Question Title

* 6. Please provide any further comments on this consultation below.

Thank you for sharing your comments with us.

OBSI will carefully consider all submissions received as we work to consider possible updates to our loss calculation methodology and we will consult with our board and regulators on any proposed changes. We expect to announce the results of this process and any plans for future consultation in early 2025.

T