Draft regulation - mortgage brokers and agents - licensing

DRAFT REGULATION

mortgage brokers and agents – licensing

Note: This is a draft regulation for discussion purposes. Bill 65, the Mortgage Brokerages, Lenders and Administrators Act, 2006, is not yet enacted.

Interpretation

Definitions

1. In this Regulation,

“affiliate”, with respect to a corporation, has the same meaning as in the Business Corporations Act;
“effective date” means the day on which subsections 2 (3) and 3 (3) of the Act come into force; “finance company” means a corporation, other than a financial institution, that meets both of the following criteria:
  1. A material business activity of the corporation involves making or refinancing loans, or entering into any other similar arrangements for advancing funds or credit.
  2. The shares of the corporation, or a corporation with which the corporation is affiliated, are listed on a stock exchange in Canada or outside Canada that is a prescribed stock exchange for the purposes of the Income Tax Act (Canada).
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Eligibility to be Issued a Mortgage Broker's Licence

Requirements for licence issue

2. (1)An individual is eligible to be issued a mortgage broker's licence if all of the following requirements are satisfied:

  1. The individual is at least 18 years old.
  2. The individual is a resident of Canada.
  3. The individual has a mailing address in Ontario that is suitable to permit service by registered mail.
  4. The individual is authorized by a brokerage to deal or trade in mortgages on its behalf.
  5. The individual has successfully completed a program of education for mortgage agents approved by the Superintendent for the purpose of paragraph 5 of subsection 10 (1).
  6. The individual has successfully completed, within three years before applying for the licence, a program of education for mortgage brokers approved by the Superintendent.
  7. The individual was, for at least 24 of the 36 months immediately before the date he or she applies for the licence,
    1. licensed as a mortgage agent, or
    2. employed or authorized to deal in mortgages on behalf of a person who was registered under the Mortgage Brokers Act, and the Superintendent had been notified under that Act that the individual was so employed or authorized.

(2)An individual is deemed to satisfy the education requirement of paragraph 5 or 6 of subsection (1) or the experience requirement of paragraph 7 of subsection (1), or any combination of the education and experience requirements of paragraphs 5, 6 and 7 of subsection (1), if the Superintendent is satisfied that the individual has a combination of education and experience that is equivalent to the requirement or requirements.

(3) An individual is exempt from satisfying the education and experience requirements of paragraphs 5, 6 and 7 of subsection (1) if the individual held a mortgage broker's licence at any time in the 24 months immediately before the date he or she applies for the licence.

Education and experience exemption — registered broker under Mortgage Brokers Act

3.An individual is exempt from satisfying the education and experience requirements of paragraphs 5, 6 and 7 of subsection 2 (1) if both of the following circumstances apply:

  1. The individual applies for a mortgage broker's licence before the effective date.
  2. The individual is, on the date he or she applies for the licence,
    1. an active director or officer of a corporation registered under the Mortgage Brokers Act,
    2. a partner in a partnership registered under the Mortgage Brokers Act, or
    3. the proprietor of a sole proprietorship registered under the Mortgage Brokers Act,

and the Superintendent had notice under that Act, before the date the individual applies for the licence, of the individual's status as described in subparagraph i, ii or iii.

Education and experience exemption — agent under Mortgage Brokers Act

4. An individual is exempt from satisfying the education and experience requirements of paragraphs 5, 6 and 7 of subsection 2 (1) if all of the following circumstances apply:

  1. The individual applies for a mortgage broker's licence before the effective date.
  2. The individual is, on the date he or she applies for the licence, employed or authorized to arrange or deal in mortgages on behalf of a person who is registered under the Mortgage Brokers Act, and the Superintendent had been notified under that Act, before the date that the individual applies for the licence, that the individual was so employed or authorized.
  3. The individual has successfully completed one of the following courses:
    1. Financial Services Underwriting Program offered by Seneca College after 1998.
    2. Mortgage Brokers Program offered by Seneca College in 1994, 1995, 1996, 1997 and 1998.
    3. The Mortgage Brokers Course sponsored by the Ontario Mortgage Brokers Association before 1995.
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Education and experience exemption — registered real estate broker

5. An individual is exempt from satisfying the education and experience requirements of paragraphs 5, 6 and 7 of subsection 2 (1) if both of the following circumstances apply:

  1. The individual applies for a mortgage broker's licence before the first anniversary of the effective date.
  2. The individual was registered as a real estate broker under the Real Estate and Business Brokers Act, 2002 immediately before the earlier of the date he or she applies for the licence and the effective date.

Education and experience exemption — education in progress at effective date

6. An individual is exempt from satisfying the education and experience requirements of paragraphs 5 and 7 of subsection 2 (1) if both of the following circumstances apply:

  1. The individual is enrolled, on the effective date, in the Financial Services Underwriting Program offered by Seneca College.
  2. The individual successfully completes the program described in paragraph 1 within one year before applying for the licence.

Issuance where prior application refused, prior licence revoked

7. An individual whose mortgage broker's or agent's licence has been revoked, or whose application for a mortgage broker's or agent's licence or for renewal of such licence has been refused, may apply for a mortgage broker's licence only if,

  1. 12 months have passed since the revocation or refusal; and
  2. the individual satisfies the Superintendent that new or other evidence is available or that material circumstances have changed.

Requirements for licence renewal

8. An individual is eligible to have his or her mortgage broker's licence renewed if all of the following requirements are satisfied:

  1. The individual is a resident of Canada.
  2. The individual has a mailing address in Ontario that is suitable to permit service by registered mail.
  3. The individual is authorized by a brokerage to deal or trade in mortgages on its behalf.

Non-suitability to be licensed

9.In determining whether an applicant is not suitable to be licensed as a mortgage broker on an application for the licence or for its renewal, the Superintendent shall have regard to the following circumstances:

  1. 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.
  2. The individual is carrying on activities that contravene or will contravene the Act or the regulations if he or she is licensed.
  3. The individual has made a false statement or has provided false information to the Superintendent with respect to the application for the licence or for its renewal.
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Eligibility to be Issued a Mortgage Agent's Licence

Requirements for licence issue

10.(1)An individual is eligible to be issued a mortgage agent's licence if all of the following requirements are satisfied:

  1. The individual is at least 18 years old.
  2. The individual is a resident of Canada.
  3. he individual has a mailing address in Ontario that is suitable to permit service by registered mail.
  4. The individual is authorized by a brokerage to deal or trade in mortgages on its behalf.
  5. The individual has successfully completed, within two years before applying for the licence, a program of education for mortgage agents approved by the Superintendent.

(2)An individual is deemed to satisfy the education requirement of paragraph 5 of subsection (1) if the Superintendent is satisfied that the individual has a combination of education and experience that is equivalent to it.

(3) An individual is exempt from satisfying the education requirement of paragraph 5 of subsection (1) if the individual held a mortgage agent's licence at any time in the 24 months immediately before the date he or she applies for the licence.

Education exemption — if brokerage is finance company

11.(1)An individual is exempt from satisfying the education requirement of paragraph 5 of subsection 10 (1) if both of the following circumstances apply:

  1. The individual is authorized to deal in mortgages on behalf of a brokerage that,
    1. is a finance company, and
    2. is, or is an affiliate of, the lender for all the mortgages that brokers or agents authorized to deal in mortgages on behalf of the brokerage deal in.
  2. The Superintendent is satisfied that the brokerage will provide the individual with such training as the Superintendent considers adequate.

(2) A mortgage agent's licence issued to an individual who is exempt from the education requirement of paragraph 5 of subsection 10 (1) by virtue of subsection (1) shall not be amended to replace the name of the brokerage on whose behalf the individual is authorized to deal or trade in mortgages with the name of another brokerage unless,

  1. subsection (1) applies to the individual in respect of the other brokerage as well; or
  2. the individual has successfully completed a program of education required by paragraph 5 of subsection 10 (1).

(3) An individual is deemed to satisfy the education requirement of clause (2) (b) if the Superintendent is satisfied that the individual has a combination of education and experience that is equivalent to it.

Education exemption — agent under Mortgage Brokers Act, completed education

12. An individual is exempt from satisfying the education requirement of paragraph 5 of subsection 10 (1) if all of the following circumstances apply:

  1. The individual applies for a mortgage agent's licence before the effective date.
  2. The individual is, on the date he or she applies for the licence, employed or authorized to arrange or deal in mortgages on behalf of a person who is registered under the Mortgage Brokers Act, and the Superintendent had been notified under that Act, before the date that the individual applies for the licence, that the individual was so employed or authorized.
  3. The individual has successfully completed, more than two years before applying for the licence, a program of education for mortgage agents approved by the Superintendent for the purpose of paragraph 5 of subsection 10 (1).
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Education exemption — agent under Mortgage Brokers Act, 24 months experience

13. An individual is exempt from satisfying the education requirement of paragraph 5 of subsection 10 (1) if both of the following circumstances apply:

  1. The individual applies for a mortgage agent's licence before the effective date.
  2. The individual was, for at least 24 of the 36 months immediately before the date he or she applies for a licence, employed or authorized to deal in mortgages on behalf of a person who was registered under the Mortgage Brokers Act, and the Superintendent had been notified under that Act that the individual was so employed or authorized.

Education exemption — agent under Mortgage Brokers Act, undertaking to complete education

14. An individual is exempt from satisfying the education requirement of paragraph 5 of subsection 10 (1) if all of the following circumstances apply:

  1. The individual applies for a mortgage agent's licence before the effective date.
  2. The individual is, on the date he or she applies for the licence, employed or authorized to arrange or deal in mortgages on behalf of a person who is registered under the Mortgage Brokers Act, and the Superintendent had been notified under that Act, before the date that the individual applies for the licence, that the individual was so employed or authorized.
  3. The individual undertakes, as a condition of his or her licence, to successfully complete, before the second anniversary of the effective date, a program of education for mortgage agents approved by the Superintendent for the purpose of paragraph 5 of subsection 10 (1).

Issuance where prior application refused, prior licence revoked

15. An individual whose mortgage broker's or agent's licence has been revoked, or whose application for a mortgage broker's or agent's licence or for renewal of such licence has been refused, may apply for a mortgage agent's licence only if,

  1. 12 months have passed since the revocation or refusal; and
  2. the individual satisfies the Superintendent that new or other evidence is available or that material circumstances have changed.

Requirements for licence renewal

16. An individual is eligible to have his or her mortgage agent's licence renewed if all of the following requirements are satisfied:

  1. The individual is a resident of Canada.
  2. The individual has a mailing address in Ontario that is suitable to permit service by registered mail.
  3. The individual is authorized by a brokerage to deal or trade in mortgages on its behalf.

Non-suitability to be licensed

17.In determining whether an applicant is not suitable to be licensed as a mortgage agent on an application for the licence or for its renewal, the Superintendent shall have regard to the following circumstances:

  1. 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.
  2. The individual is carrying on activities that contravene or will contravene the Act or the regulations if he or she is licensed.
  3. The individual has made a false statement or has provided false information to the Superintendent with respect to the application for the licence or for its renewal.