All securities or derivatives dealers and advisers registered in Québec with the Autorité des marchés financiers (AMF), including members of the Canadian Investment Regulatory Organization (CIRO) and firms that service clients in Québec while having no business location in Québec, will have new compliance obligations regarding complaint handling as of July 1, 2025.
The Regulation respecting Complaint Processing and Dispute Resolution in the Financial Sector (the Regulation), requires firms to assess and make necessary updates to their current complaints processing and dispute resolution policies and procedures, ensure they have made the required public disclosure of such policies in summary format, and train their staff on the new requirements. Firms servicing clients in Québec should also be aware that French language obligations apply to all client facing documents and should prepare a French version of the summary that is publicly disclosed.
The Regulation is prescriptive and detailed and may require significant changes to a firm’s current complaints policies and procedures. This bulletin is focused on the impact of the Regulation on securities and derivatives dealers and advisers. An overview of the impact of the Regulation on the broader financial sector in Québec is provided in our previous article.
Does the Regulation apply to you?
The Regulation applies to dealers and advisers governed by the Derivatives Act or the Securities Act – whether registered with CIRO or not.1 The Regulation does not apply to Investment Fund Managers (IFMs). However, IFMs who are also registered as a dealer or adviser in Québec will be subject to the Regulation for their activities as such and must also update their policies and procedures.
The following flowchart illustrates whether the Regulation applies to firms registered as a dealer or an adviser governed by the Québec Derivatives Act or Securities Act.
Key defined terms
Unless already defined in this article, the key terms that you need to understand the new Regulation are defined below.
“Acknowledgement” means the communication provided in writing by the firm to a complainant to confirm receipt of the complaint, and to explain the rights of the complainant and the complaint process.
“CIRO dealer members” means investment dealers and mutual fund dealers who are members of CIRO.
“Final Written Decision” means the final written response provided by the firm to the complainant explaining the conclusion of the analysis of the complaint, the reasons for the conclusion, and the rights of the complainant.
“Offer” means any settlement offer made by the firm to the complainant in response to a complaint.
Impact on CIRO dealer members
CIRO dealer members are subject to the Regulation if they are registered in Québec. However, as CIRO dealer members are already subject to similar obligations under applicable CIRO rules, the AMF published a blanket order on January 25, 2025 (the blanket order) granting CIRO dealer members a temporary exemption from certain requirements of the Regulation, provided they comply with applicable CIRO rules. The exemption in the blanket order will remain in force from July 1, 2025, until the earlier of: (i) the effective date of the changes that CIRO makes to its complaint handling rules as part of its rule consolidation project, or (ii) December 31, 2029.
Pursuant to the blanket order, CIRO dealer members registered in Québec must:
- provide a Final Written Decision within 60 days, or a maximum of 90 days if exceptional circumstances apply;
- assist complainants throughout the complaint process (for example, by helping them clarify their complaint if it is unclear) and update the complainant in a timely manner on the status of the complaint;
- give complainants sufficient time to assess an Offer and settle the Offer within 30 days of acceptance;
- adopt policies to identify and address recurring issues;
- ensure complaint records are transferred to the AMF within 15 days of the receipt of a request from complainants (the timeframe was not previously specified) to have them examined by the AMF;
- not use misleading titles such as “ombudsman” to designate individuals handling complaints; and
- revise the client facing summary of the firm’s policy to incorporate these requirements.
The blanket order does not exempt CIRO dealer members from the requirement to annually submit their complaints report to the AMF. The process for doing so has not changed and is set out in the Notice relating to the redesigned complaint reporting process. Complaint reports filed through ComSet by CIRO dealer members will continue to be forwarded electronically to the AMF.
Additional requirements for dealers and advisers that are registered with the AMF
In addition to the requirements set out above, firms that are registered in Québec as securities or derivatives dealers or advisers under the AMF must also:
- post a summary of the firm’s complaint processing and dispute resolution policy (Complaint policy) on their website in a location that is easily identifiable by a client;
- communicate and provide information documents related to the handling of complaints in a clear, legible, precise, and non-misleading form;
- take reasonable measures to understand the communications they receive, and assist complainants in formulating their complaints and throughout the complaints review process, if needed;
- maintain a complaint register that contains a complete record of each complaint; and
- promptly issue a written acknowledgment, which must contain a hyperlink to the summary of their Complaint policy or a copy of it.
Simplified process
A simplified process may be used for complaints that the firm can resolve to the complainant’s satisfaction within 20 days. Under the simplified process, complaints may be referred to a member of the firm’s client service team and handled verbally (for example, in a phone call).
Under this process, the firm is not required to send a written acknowledgment within 10 days (as would otherwise be required in Québec). Rather, the firm is required to send a written acknowledgement if the complaint is not resolved within 20 days which includes a statement that a Final Written Decision will be provided within 60 days.
Applicable sanctions
Although the Regulation provides for monetary administrative penalties, this section of the Regulation does not apply to dealers or advisers. Consequently, the Tribunal administratif des marchés financiers may impose the administrative penalty it deems appropriate in the circumstances. However, it is reasonable to believe the Tribunal will impose similar penalties as the ones provided under the Regulation.
Next steps
The introduction of the new standards for handling complaints is significant for dealers and advisers registered in Québec. To address the new requirements, firms will need to consider how to adapt existing complaint handling processes. Where there are different requirements, firms will need to consider whether to adopt two procedures (one for clients who are not residents of Québec and one for residents of Québec), one procedure that adopts the more stringent standard introduced by the Regulation, or a bespoke combination of the two.
Dealers and advisers will also need to consider whether to adopt the simplified process for handling complaints which they believe they can resolve within 20 days of the filing of the complaint by the complainant.
Once firms have decided how to adapt their existing complaint handling processes, they will need to update their Complaints policy and the client facing summary of this policy and then train their employees on their new policy. In addition, if firms have not already done so, they should translate their summary policy into French and publish it on their website.
Contact us
For additional guidance or assistance regarding these upcoming changes to Québec’s complaint handling process, we invite you to contact the authors or your usual BLG or BLG Beyond AUM Law lawyer. We would be pleased to assist you with the preparation of your Complaint policy, the summary of your policy, the complaint register, training or any other matters related to this new regulatory framework.
