ARCHIVED - Compliance Framework: Possible compliance concern: voluntary code of conduct or public commitment

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Possible compliance concern: voluntary code of conduct or public commitment

A voluntary code of conduct is a code adopted by a financial entity and made publicly available, designed to protect the interests of customers of that financial entity or industry association. FCAC monitors FRFEs’ adherence to voluntary codes of conduct.

A public commitment is defined as a commitment made by a financial entity designed to protect the interests of customers of that institution or association. FCAC monitors the FRFEs’ adherence to public commitments.

Investigation and evaluation

Investigation and evaluation is a process undertaken by CEB once a compliance concern has been identified. The financial entity involved is contacted in order to provide further details required for the investigation (e.g. copies of documents or recordings of conversations).

In accordance with Section 5 of the FCAC Act, the Commissioner may collect any personal information considered necessary to determine whether FRFEs are in compliance with the various legislative provisions. Furthermore, FRFEs must provide the Commissioner with this information at the time and in the form that the Commissioner may require for the purpose of administering the FCAC Act.

Unless otherwise indicated, the FRFE will normally have up to 30 calendar days to respond to the initial investigation request.

If the investigation reveals no underlying compliance concerns, the investigation is closed and the FRFE is notified.

However, if the investigation highlights a compliance concern, CEB will analyze the compliance concern based on numerous factors such as:

• harm to consumers
• risk of reoccurrence
• controls in place/actions taken to prevent the issue
• level of communication with FCAC

Non-compliance letter

A non-compliance letter is an administrative compliance tool used to inform a FRFE of a possible non-adherence to a voluntary code of conduct or public commitment that CEB monitors. This letter is signed by the Director of Compliance and Enforcement and notifies the FRFE that CEB is aware of possible non-adherence to a code or commitment and that it will close the case as non-compliant.

In some cases, CEB will request a FRFE to take appropriate measures in order to work toward full adherence with the code or commitment. The FRFE has the right to make representations to the Commissioner to contest the non-compliance letter if it deems necessary.

Representations

After a FRFE receives a non-compliance letter with respect to meeting obligations set out in a voluntary code of conduct or public commitment, the FRFE has 30 calendar days to respond.

If no representations are made by the deadline, or if the FRFE does not dispute the findings presented in the letter, CEB closes the file and notes the incidence of non-compliance.

Such incidents of non-compliance do not form part of the financial entity’s compliance history, as set out in section 20 of the FCAC Act, and therefore are not subject to an administrative monetary penalty.

To Commissioner for decision

If the financial institution makes representations contesting the findings, CEB forwards the file to the Commissioner for review. The Commissioner reviews the file, including the non-compliance letter and the representations. Based on the review of the file, the Commissioner will conclude whether or not the FRFE has complied with the voluntary code of conduct or public commitment. The FRFE will be notified of the outcome of the review.

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