The Board of the International Organization of Securities Commissions today published a report that sets forth nine Sound Practices aimed at assisting its members in developing and improving their complaint handling procedures and mechanisms for retail investors.
Investor protection is a key objective of IOSCO and securities regulators worldwide. Access to independent, affordable, fair, accountable, timely and efficient redress mechanisms is critical for investor protection. Effective mechanisms for addressing financial misconduct or illegal market practices that harm investors or financial consumers can also improve market discipline and promote investor confidence in financial markets.
The report, titled Complaint Handling and Redress System for Retail Investors, which was prepared through the Board’s Committee on Retail Investors, offers a comparative analysis of informal complaint handling processes used by financial service providers and regulators; alternative dispute resolution; and formal legal complaint handling for investors pursuing claims for money damages and other remedies. It serves as a resource for jurisdictions seeking to identify and address possible gaps in their complaint handling and redress systems.
To assist jurisdictions seeking to develop or enhance their complaint handling mechanisms and make them more user-friendly, the report sets out nine Sound Practices (SPs) that cover the following themes:
- SP1: Establishing a system for handling retail investor complaints.
- SP2: Taking steps to raise investor awareness of various available complaint handling systems.
- SP3: Making available as many channels as possible for retail investors to submit complaints.
- SP4: Taking steps to support complaint handling systems.
- SP5: Encouraging financial service providers (FSPs) to offer a wide range of resolutions to retail investor complaints.
- SP6: Using complaint data to identify areas for new or enhanced investor education initiatives.
- SP7: Using complaint data for regulatory and supervisory purposes.
- SP8: Seeking input from retail investors about their experience with complaint handling systems.
- SP9: Making alternative dispute resolution (ADR) facilities operated by or affiliated with a regulator more accessible for retail investors.
