On 27 January 2021, the International Organisation of Securities Commissions (IOSCO) issued a report, Complaint Handling and Redress System for Retail Investors, which provides a comparative analysis of informal complaint handling processes used by financial services providers and regulators, alternative dispute resolution and formal legal complaint handling for investors pursuing claims for money damages and other remedies.
The report also sets out nine sound practices that cover the following themes:
- Establishing a system for handling retail investor complaints.
- Taking steps to raise investor awareness of various available complaint handling systems.
- Making available as many channels as possible for retail investors to submit complaints.
- Taking steps to support complaint handling systems.
- Encouraging financial service providers to offer a wide range of resolutions to retail investor complaints.
- Using complaints data to identify areas for new or enhanced investor education initiatives.
- Using complaint data for regulatory and supervisory purposes.
- Seeking input from retail investors about their experience with complaint handling systems.
- Making alternative dispute resolution facilities operated by or affiliated with a regulator more accessible for retail investors.
The sound practices are intended to assist jurisdictions in developing their complaint handling mechanisms. The report highlights the importance of hearing the views of investors. One of the sound practices is to gauge investor satisfaction with the complaint process. Comments from investors may not always be positive, but investor rights could enhance the effectiveness of complaint handling programs.