Mortgage Brokerages, Lenders and Administrators Act, 2006 - Additional Draft Regulations for Consultation

III. Consultation Draft Regulations

8) Exemptions From The Requirements To Be Licensed

under the

MORTGAGE BROKERAGES, LENDERS AND ADMINISTRATORS ACT, 2006
AMENDING O.REG. 407/07


Note: This is a draft regulation for discussion purposes. The Mortgage Brokerages, Lenders and Administrators Act, 2006 is not in force.

1. Ontario Regulation 407/07 is amended by adding the following section:

For personal corporation of broker, agent

8.1 (1) A corporation is exempted under subsection 6 (7) of the Act from any requirement to have a brokerage licence if all of the following circumstances exist:

  1. Every broker or agent who is an employee or shareholder of the corporation (the member brokers and agents) is authorized to deal or trade in mortgages on behalf of the same brokerage (the business brokerage).
  2. The corporation does not carry on the business of dealing or trading in mortgages otherwise than by providing the services of its member brokers and agents to the business brokerage.
  3. The corporation does not carry on business as a mortgage lender.
  4. The corporation and its member brokers and agents do not represent to the public in any manner, directly or indirectly, that the corporation carries on the business of dealing or trading in mortgages or carries on business as a mortgage lender.
  5. The corporation does not receive, directly or indirectly, revenue for dealing or trading in mortgages from any person or entity other than the business brokerage.
  6. The member brokers and agents do not receive, directly or indirectly, fees or other remuneration for dealing or trading in mortgages from any person or entity other than the corporation or the business brokerage.
  7. The corporation does not, on behalf of the business brokerage, directly or indirectly hold funds or other assets received from borrowers, lenders or investors in connection with dealing or trading in mortgages.
  8. A majority of the corporations directors are member brokers and agents.
  9. A majority of the equity of the corporation is legally and beneficially owned, directly or indirectly, by one or more of its member brokers or agents.
  10. There is a written agreement between the business brokerage and each member broker or agent governing the relationship between the brokerage and the broker or agent.
  11. There is a written agreement between the corporation and the business brokerage governing the relationship between the business brokerage and the corporation and its member brokers and agents.
  12. Under the agreement between the corporation and the business brokerage, the corporation agrees not to hinder or obstruct the business brokerage or its principal broker in the performance of their duties under the Act and not to hinder or obstruct the member brokers and agents in the performance of their duties under the Act.
  13. Under the agreement between the corporation and the business brokerage, the corporation agrees to provide whatever assistance may be reasonably necessary to enable the business brokerage and its principal broker to comply with their duties under the Act and to enable the brokerage and its principal broker to ensure that the member brokers and agents are complying with their duties under the Act.
  14. Under the agreement between the corporation and the business brokerage, the corporation agrees to provide whatever assistance may reasonably be necessary to enable the business brokerage to determine whether the circumstances entitling the corporation to the exemption established by this section exist.

(2) Expressions used in this section have the same meaning as in the standards of practice prescribed for brokerage licences.

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