ARCHIVED - Compliance Framework: Accumulation of industry information

From: Financial Consumer Agency of Canada

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The Compliance Framework is archived.  The Supervision Framework came into effect on October 1, 2018.

Accumulation of industry information

The Financial Consumer Agency of Canada (FCAC) gathers information on current issues relating to the financial sector in various ways. Below is a list of the most common sources of information used by FCAC for overseeing market conduct:

After gathering relevant industry information, the Compliance and Enforcement Branch (CEB) undertakes a compliance triage in order to categorize and analyze the information. Compliance concerns identified through any information source may lead to investigation, evaluation and possibly the consideration of compliance or enforcement tools.

FRFE reportable compliance matters

FCAC expects FRFEs to forward reportable compliance matters (reportable complaints or reportable compliance issues) in the reportable manner within the specified timeframes set out below.

Reportable complaint

A reportable complaint is a complaint involving a legislative provision, a voluntary code of conduct or a public commitment, that has been received by or forwarded to the designated reportable level, or higher, of the financial entity’s complaint-handling procedure.

A reportable complaint must be forwarded to FCAC even though:

  • the consumer has also contacted FCAC
  • the consumer is satisfied with the outcome of the complaint
  • the complaint was received at the reportable level or higher but then sent to a lower level of the complaint‐handling process for response or resolution
  • the complaint was received at a reportable level of the complaint‐handling process and was resolved directly
  • the FRFE concluded that it had complied with its obligations to consumers
​​Templates and d​eadlines

For FRFEs that report complaints in the Detailed Manner (full complaint description provided):

FCAC expects FRFEs to submit reportable complaints​ ​to CEB quarterly using the following reporting forms: Reportable complaints summary report for consumer provisions and the Reportable complaints report for voluntary codes of conduct and public commitments.

If the FRFE does not have any reportable complaints (related to consumer provisions or codes/commitments), FCAC expects the FRFE to report this to us on a quarterly basis by submitting the Reportable complaints nil report.

For FRFEs authorized to report complaints in the Aggregate Manner:

FCAC expects financial institutions to submit all repo​rtable complaints in aggregate form to CEB quarterly using the following reporting form: Reportable complaints aggregate report. The reportable complaints aggregate report contains a section for nil reporting to be used as applicable.

FCAC expects ECBs to submit all reportable complaints in aggregate form quarterly using the following reporting form: Reportable Complaints Aggregate Report. The reportable complaints aggregate report contains a section for nil reporting to be used as applicable.

Reportable compliance issue

A reportable compliance issue is a compliance deficiency that is a material or systemic issue that would normally be reported to the compliance division of the FRFE or captured in the regulatory compliance management process. This would include any material or systemic compliance deficiency pertaining to a legislative provision, a voluntary code of conduct or a public commitment that is monitored by FCAC.

The compliance deficiency may have been identified through various sources including, but not limited to, regular internal audits, ad hoc compliance or control reviews, or a consumer complaint. If a compliance issue has already been reported to FCAC through the normal reporting of a reportable complaint, it should be reported and linked to the initial report.

A reportable compliance issue would need to be forwarded to FCAC even though:

  • the compliance matter has been addressed by the FRFE
  • consumers were not financially affected
  • an implementation plan for fixing the identified compliance matter is not yet in place
Template and deadline

FCAC expects financial institutions to submit a reportable compliance issues summary report within 60 days of the compliance issue being identified, reported or received by their compliance group. FCAC will record each reportable compliance issue in its tracking system.

FCAC expects ECBs to submit either an ECB compliance issue or a systemic bank issue within 60 days of the compliance issue being identified, reported or received by their compliance group. FCAC will record each reportable compliance issue in its tracking system.

Consumer complaints

A consumer complaint is a complaint that FCAC receives directly from a consumer pertaining to a legislative provision, voluntary code of conduct or public commitment. FCAC’s consumer services centre receives complaints via email, mail and telephone. The consumer services centre records all pertinent details about the complaint from the consumer and responds to all written complaints in a timely manner.

Any complaint that is received by FCAC and is related to a legislative provision, code or commitment is sent to the Compliance and Enforcement Branch for compliance triage.

In addition to the above-mentioned complaints, FCAC also receives a broad range of general consumer complaints (i.e. complaints not related to a consumer provision). After receiving this type of complaint, the consumer services centre explains the complaint-handling procedure of the relevant financial entity and provides information about third-party dispute resolution, if applicable. If a complainant has not followed the financial entity’s complaint procedures, FCAC directs the complainant to the right point of entry in the complaint process. Where necessary, it directs consumers to other organizations (e.g. provincial regulator or other government department or agency).

FRFE compliance assessment questionnaires

In order to monitor the level of compliance in the marketplace, FCAC may carry out direct FRFE assessments on specific legislative provisions, voluntary codes of conduct or public commitments. This assessment may also contain elements pertaining to internal processes or compliance functions.

The questionnaire and resulting follow-up comprise a comprehensive and systemic review of an institution’s overall compliance. The process enables FCAC to discern any areas where the institution can make improvements to its overall compliance.

Industry reviews

An industry review is a formal compliance tool through which information is gathered from various FRFEs on a specific compliance matter. It is used to establish common practices in the industry on regulatory disclosure, and to provide recommendations or guidance to the industry on what best practices exist in the marketplace.

Federal regulatory oversight committees

FCAC participates in several committees, such as the Senior Advisory Committee (SAC), whose mandate is to provide high-level policy advice to the Minister of Finance, and the Financial Institutions Supervisory Committee (FISC), which is mandated to facilitate the exchange of information on supervisory issues concerning individual financial institutions. By maintaining an active role within the regulatory network, FCAC provides high-level policy advice and facilitates the exchange of information on supervisory issues concerning financial institutions.

Statutory filing requirements

Certain legislative provisions require FRFEs to file the following documents with FCAC’s Commissioner.

  • Complaint-handling procedures
    FRFIs are legally required to have a complaint-handling process in place for dealing with complaints made by consumers. The process must be available to consumers at branches, on websites where products or services are offered, and upon customer demand. Financial institutions must file their complaint procedures with FCAC. The Agency maintains a database of complaint-handling procedures. The database is accessible through the complaints-handling procedures search tool on FCAC’s website.
  • Public accountability statements
    A public accountability statement is a document that every financial institution with $1 billion or more in equity is required, by law, to publish annually and file with the FCAC commissioner. The statement describes the contributions made by the institution to Canada’s economy and society.

    FCAC ensures that all statements are filed within the legislated time frame and confirms that they are available to the public. FCAC also reviews the statements to ensure that the contents meet the requirements.
  • Notice of branch closures
    A notice of branch closure is a requirement wherein FRFIs must notify FCAC before closing a branch that opens retail accounts and disburses cash, or before ceasing to carry on either of those activities.

    FCAC ensures that notices of branch closure meet the content and timing requirements of the applicable legislation. If the institution has met the statutory filing requirements, FCAC acknowledges receipt of this information. If compliance concerns are identified, FCAC ensures that notices of branch closure meet the content and timing requirements of the applicable legislation. If the institution has met the statutory filing requirements, FCAC acknowledges receipt of this information. If compliance concerns are identified, FCAC will follow the compliance framework process with respect to the compliance concern.

Certain legislative provisions​ require ECBs to file the following documents with FCAC’s Commissionner.

  • Reporting of systemic bank issues
  • Annual reporting of complaints and discharge of functions

In addition, every five years each ECB must submit to an evaluation of the discharge of its functions and performance of its activities as an ECB that is conducted by a third party in accordance with terms of reference established by the body corporate in consultation with the Commissioner.

Other forms of industry research

The Agency conducts other marketplace research using various methods including:

Compliance triage

Compliance triage is an administrative process undertaken by CEB in order to categorize various types of industry information collected by the Agency. The goal of the compliance triage is to determine whether the information being analyzed by CEB could involve a possible compliance concern involving a legislative provision, voluntary code of conduct or public commitment overseen by FCAC.

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