Proposed amendments to O. Reg. 188/08 (Mortgage Brokerages: Standards of Practice) under the Mortgage Brokerages, Lenders and Administrators Act, 2006
O. Reg. 188/08
Bill or Act:
Mortgage Brokerages, Lenders and Administrators Act, 2006
Summary of Proposal:
The Ministry of Finance is proposing to strengthen investor protections relating to syndicated mortgage investments by amending Ontario Regulation 188/08 to:
• Define less complex syndicated mortgages and place additional obligations on brokerages in relation to more complex syndicated mortgages.
• Require brokerages to report complaints relating to a syndicated mortgage transaction to FSCO's Superintendent of Financial Services ("the Superintendent") within 10 business days of receiving it.
• Require the collection of specific information by the brokerage about a potential investor or lender in a syndicated mortgage to ensure that the brokerage understands the investor's/lender's investment needs and risk tolerances. This information is to be recorded in a form approved by the Superintendent and signed by the lender or investor to attest to the accuracy of its contents.
• Require that the brokerage undertake a suitability assessment for each lender or investor in a syndicated mortgage, recording this information in a form that has been approved by the Superintendent and providing a copy to the lender or investor.
• Place an annual $25,000 investment limit on lenders or investors in syndicated mortgage investments.
• Clarify and enumerate requirements relating to documents that are to be disclosed to lenders or investors in relation to a syndicated mortgage, including requirements relating to appraisals and the financial statements of the borrower.
August 28, 2017
Comments Due Date:
October 13, 2017
Senior Policy Advisor
Deposit Taking and Cooperatives Policy Unit
Financial Services Policy Division
Ministry of Finance
Frost North - 4th Floor
95 Grosvenor Street
Toronto, ON M7A 1Z1