REQUIREMENTS FOR A BROKERAGE LICENCE

CONSULTATION DRAFT REGULATION

made under the

MORTGAGE BROKERAGES, MORTGAGE LENDERS
AND MORTGAGE ADMINISTRATORS ACT
A CONSULTATION DRAFT


MORTGAGE BROKERAGES : THE LICENSING PROCESS

REQUIREMENTS FOR A BROKERAGE LICENCE

Corporations

  1.  
    1. A corporation is eligible to have a brokerage licence if all of the following requirements are satisfied:

      1. It must be incorporated under an Act of any jurisdiction in Canada.

      2. It must have a mailing address in Ontario that is suitable to permit service by registered mail.

      3. It must have errors and omissions insurance in a form approved by the Superintendent with extended coverage for loss resulting from fraudulent acts or it must have some other form of financial guarantee in a form approved by the Superintendent for such losses. The insurance or guarantee must be sufficient to pay a minimum of $500,000 per claim and $1 million for all claims made in any policy year against the corporation and against each mortgage broker and agent authorized to deal in mortgages or trade in mortgages on behalf of the corporation at any time during the year.

    2. A corporation is not suitable to have a brokerage licence if any of the following circumstances apply:

      1. Having regard to its financial position, the corporation cannot reasonably be expected to be financially responsible in the conduct of its business.

      2. The past conduct of any director or officer of the corporation affords reasonable grounds for belief that the business of the corporation will not be carried on in accordance with law and with integrity and honesty.

      3. The corporation is carrying on activities that will contravene the Act or the regulations if the corporation is licensed.

      4. A director or officer of the corporation has made a false statement or has provided false information to the Superintendent with respect to the application for a licence.

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Partnerships

  1.  
    1. A partnership is eligible to have a brokerage licence if all of the following requirements are satisfied:

      1. Every partner must be a resident of Canada.

      2. The partnership must have a mailing address in Ontario that is suitable to permit service by registered mail.

      3. It must have errors and omissions insurance in a form approved by the Superintendent with extended coverage for loss resulting from fraudulent acts or it must have some other form of financial guarantee in a form approved by the Superintendent for such losses. The insurance or guarantee must be sufficient to pay a minimum of $500,000 per claim and $1 million for all claims made in any policy year against the partnership and against each mortgage broker and agent authorized to deal in mortgages or trade in mortgages on behalf of the partnership at any time during the year.

    2. A partnership is not suitable to have a brokerage licence if any of the following circumstances apply:

      1. Having regard to its financial position, the partnership cannot reasonably be expected to be financially responsible in the conduct of its business.

      2. The past conduct of any partner affords reasonable grounds for belief that the business of the partnership will not be carried on in accordance with law and with integrity and honesty.

      3. The partnership or any partner is carrying on activities that will contravene the Act or the regulations if the partnership is licensed.

      4. A partner has made a false statement or has provided false information to the Superintendent with respect to the application for a licence.

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Sole proprietorships

  1.  
    1. A sole proprietorship is eligible to have a brokerage licence if all of the following requirements are satisfied:

      1. The proprietor must be a resident of Canada.

      2. The sole proprietorship must have a mailing address in Ontario that is suitable to permit service by registered mail.

      3. It must have errors and omissions insurance in a form approved by the Superintendent with extended coverage for loss resulting from fraudulent acts or it must have some other form of financial guarantee in a form approved by the Superintendent for such losses. The insurance or guarantee must be sufficient to pay a minimum of $500,000 per claim and $1 million for all claims made in any policy year against the sole proprietorship and against each mortgage broker and agent authorized to deal in mortgages or trade in mortgages on behalf of the sole proprietorship at any time during the year.

    2. A sole proprietorship is not suitable to have a brokerage licence if any of the following circumstances apply:

      1. Having regard to its financial position, the sole proprietorship cannot reasonably be expected to be financially responsible in the conduct of its business.

      2. The past conduct of the proprietor affords reasonable grounds for belief that the business of the sole proprietorship will not be carried on in accordance with law and with integrity and honesty.

      3. The sole proprietorship or the proprietor is carrying on activities that will contravene the Act or the regulations if the sole proprietorship is licensed.

      4. The proprietor has made a false statement or has provided false information to the Superintendent with respect to the application for a licence.

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