The Financial Services Commission of Ontario (FSCO) is issuing this bulletin to remind mortgage brokerages that transact in non-qualified syndicated mortgages of their duty to establish policies and procedures (P&Ps) that guide their operations, outline practices for mortgage agents and brokers, and set the oversight of the principal brokers, including their responsibility to review the P&Ps, pursuant to the
Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA), specifically:
Commencing in fall 2018, FSCO will conduct desk reviews and/or on-site examinations of those mortgage brokerages that deal in non-qualified syndicated mortgages to ensure their P&Ps fully comply with all MBLAA requirements.
Effective July 1, 2018, amendments to O. Reg. 188/08 placed expanded obligations on mortgage brokerages dealing in non-qualified syndicated mortgages. A non-qualified syndicated mortgage is a syndicated mortgage that does not meet the definition of a qualified syndicated mortgage pursuant to
subsection 1(2) of O. Reg. 188/08 and that is not incurred for the construction or development of property pursuant to
subsection 1(3) of O. Reg. 188/08 .
For further information regarding the amendments to O. Reg. 188/08, see:
FSCO expects that the P&Ps of mortgage brokerages that transact in non-qualified syndicated mortgages have been updated to adequately address expanded obligations under the MBLAA, including the use of
three new Superintendent forms:
- Form 3.0 – Investor/Lender Information for Investor/Lender in a Non-qualified Syndicated Mortgage (Form 3.0 – Investor/Lender Information)
- Form 3.1 – Suitability Assessment for Investor/Lender in a Non-qualified Syndicated Mortgage (Form 3.1 – Suitability Assessment)
- Form 3.2 – Disclosure Statement for Investor/Lender in a Non-qualified Syndicated Mortgage (Form 3.2 – Disclosure Statement)
Please note that FSCO requires all mortgage brokerages to comply with all new and pre-existing obligations under the MBLAA. You may wish to review the MBLAA to ensure that your mortgage brokerage’s P&Ps are fully compliant. You may also wish to review
FSCO Bulletin No. M-01/15 – Requirements for Promoting Syndicated Mortgage Investments to ensure your P&Ps outline promotional activities that comply with the MBLAA.
While this 2015 bulletin remains relevant, it does not specifically address the amendments to O. Reg. 188/08, effective July 1, 2018, which your P&Ps must address in addition to previously existing obligations.
Chief Executive Officer and Superintendent of Financial Services
October 26, 2018