Under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (the Act) and Ontario Regulation 409/07, the Superintendent is required to have regard to prescribed circumstances and other appropriate matters when considering whether an applicant is suitable for a Mortgage Broker or Mortgage Agent Licence. The following statement provides an overview of the suitability requirements and assessment principles FSCO will apply when reviewing Mortgage Broker and Mortgage Agent Licence Applications. Principal Brokers may also wish to keep these suitability requirements in mind.
When determining whether an individual is suitable to be licensed as a Mortgage Broker or Mortgage Agent, section 14(1) of the Act requires the Superintendent to have regard to certain prescribed circumstances set out in Ontario Regulation 409/7 s.10. Those circumstances are:
- Whether the individual’s past conduct affords reasonable grounds for belief that he or she will not deal or trade in mortgages in accordance with the law and with integrity and honesty
- Whether the individual is carrying on activities that contravene or will contravene the Act or the regulations if he or she is licensed.
- Whether the individual has made a false statement or has provided false information to the Superintendent with respect to the application for the licence.
In addition to the above, section 14(1) of the Act permits the Superintendent to have regard to any other matters he considers appropriate in determining suitability.
The Mortgage Broker and Mortgage Agent Licence Application requires the applicant to disclose information relevant to the Superintendent’s determination of his or her suitability for a licence. The applicant is required to provide information with respect to his or her criminal record, other registrations or licences, and bankruptcy.
The applicant must disclose whether he or she has ever been convicted of an offence under any law of any province, territory, state or country, and whether he or she is currently the subject of any charges. FSCO will conduct an independent criminal record check. Applicants must provide all relevant details at the time of application.
Other Registrations or Licences
The applicant must disclose the refusal of a registration or licence under any legislation requiring registration or licensing to deal with the public in any capacity, in any province, territory, state, or country. An applicant who holds or has held such a registration or licence is also required to disclose whether he or she has been the subject of a disciplinary proceeding that resulted in a penalty being imposed or whether he or she is the subject of an investigation or upcoming disciplinary proceeding that may result in a penalty being imposed.
The applicant must disclose whether he or she, either individually, or as a shareholder, officer or partner of a corporation or partnership, has declared bankruptcy, made a voluntary assignment in bankruptcy, or is an undischarged bankrupt. The applicant must provide:
- The trustee’s name and address;
- The location of bankruptcy filing;
- An Assignment of Bankruptcy or Receiving Order;
- A list of creditors; and
- An explanation of the circumstances of the bankruptcy.
Where an application is subject to review on grounds of suitability, the outcome will depend on the facts and circumstances of the particular case. Relevant circumstances for consideration when reviewing applicant suitability may include:
- The nature of an offence or charge with regard to the provision of financial services and the applicant’s ability to abide by the law
- The frequency or number of offences or charges
- The seriousness of an offence or charge
- In the case of bankruptcy, whether the applicant acted dishonestly, recklessly or with intention to avoid responsibility for his or her debts.
- Any failure on the part of an applicant to provide full disclosure with respect to prior registrations or licences, bankruptcy or criminal conduct.
In addition to information submitted on the application, an applicant may also be the subject of a complaint or investigation by FSCO. The information from any complaint or investigation may also be considered when determining an applicant’s suitability.
Note that providing false information on an application is an offence and will affect the decision to issue a licence. Where it appears that false statements have been made on an application or in subsequent submissions, such statements will be assessed by FSCO staff.