Draft regulation - Exemptions from the requirements to be licensed

DRAFT REGULATION

Exemptions from the Requirements to be licensed

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

Simple Referrals

Referring borrowers to lenders

1. A person or entity that refers a prospective borrower to a prospective mortgage lender is exempted from the requirement in section 2 of the Act to have a brokerage licence or a mortgage broker's or agent's licence if the person or entity complies with both of the following requirements:

  1. Before or at the time of making the referral, the person or entity advises the prospective borrower in writing,
    1. that the person or entity has received or will or may receive a fee or other remuneration, whether directly or indirectly, for making the referral, and
    2. of the nature of the relationship between the person or entity and the prospective lender.
  2. The only other information that the person or entity gives to the prospective borrower is the name, address, telephone number, fax number, e-mail address or website address of the prospective lender or of a person who acts on behalf of the prospective lender.

Referring lenders to borrowers

2. A person or entity that refers a prospective mortgage lender to a prospective borrower is exempted from the requirement in section 2 of the Act to have a brokerage licence or a mortgage broker's or agent's licence if the person or entity complies with all of the following requirements:

  1. Before making the referral, the person or entity advises the prospective borrower in writing,
    1. that the person or entity has received or will or may receive a fee or other remuneration, whether directly or indirectly, for making the referral, and
    2. of the nature of the relationship between the person or entity and the prospective lender.
  2. After giving the information described in paragraph 1, the person or entity obtains the prospective borrower's consent in writing to give the prospective lender the name, address, telephone number, fax number, e-mail address or website address, as specified by the prospective borrower, of the prospective borrower or of a person who acts on behalf of the prospective borrower.
  3. The person or entity does not give the prospective lender any information about the prospective borrower except that specified by the prospective borrower pursuant to paragraph 2.

Referral for no fee or other remuneration

3. Nothing in sections 1 or 2 affects the right of a person or entity that does not have a brokerage licence or a mortgage broker's or agent's licence to refer a prospective borrower to a prospective mortgage lender or a prospective mortgage lender to a prospective borrower for no fee or other remuneration.

Go to the top of this page.

Lawyers

Dealing in mortgages

4. A lawyer is exempted from the requirement in section 2 of the Act to have a brokerage licence or a mortgage broker's or agent's licence if both of the following circumstances apply:

  1. The lawyer, acting in his or her professional capacity as a lawyer on behalf of a client,
    1. solicits a person or entity to lend money on the security of real property, or
    2. engages in an activity described in paragraph 2, 3 or 4 of subsection 2 (1) of the Act.
  2. The lawyer does not hold himself or herself out as engaging in any activity described in subsection 2 (1) of the Act, except as described in paragraph 1 of this section, or otherwise as dealing in mortgages.

Trading in mortgages

5. A lawyer is exempted from the requirement in section 3 of the Act to have a brokerage licence or a mortgage broker's or agent's licence if both of the following circumstances apply:

  1. The lawyer, acting in his or her professional capacity as a lawyer on behalf of a client, engages in an activity described in paragraph 1 or 2 of subsection 3 (1) of the Act.
  2. The lawyer does not hold himself or herself out as engaging in any activity described in subsection 3 (1) of the Act, except as described in paragraph 1 of this section, or otherwise as trading in mortgages.

Administering mortgages

6. A lawyer is exempted from the requirement in section 5 of the Act to have a mortgage administrator's licence if both of the following circumstances apply:

  1. The lawyer administers mortgages, acting in his or her professional capacity as a lawyer on behalf of a client.
  2. The lawyer does not hold himself or herself out as administering mortgages, except as described in paragraph 1 of this section.
Go to the top of this page.

Other Exemptions

Statutory corporations

7. The following corporations are exempted from the requirement in section 2, 3 or 4 of the Act to have a brokerage licence and from the requirement in section 5 of the Act to have a mortgage administrator's licence:

  1. Ontario Realty Corporation.
  2. Ontario Infrastructure Projects Corporation.
  3. Ontario Housing Corporation.
  4. Ontario Development Corporation.
  5. Northern Ontario Development Corporation.
  6. Eastern Ontario Development Corporation.

Trustee in bankruptcy

8. A person or entity acting in the person's or entity's capacity as a trustee in bankruptcy is exempted from the requirement in section 2, 3 or 4 of the Act to have a brokerage licence and from the requirement in section 5 of the Act to have a mortgage administrator's licence.

Acting under court order

9. A person or entity acting under an order of the Superior Court of Justice is exempted from the requirement in section 2, 3 or 4 of the Act to have a brokerage licence and from the requirement in section 5 of the Act to have a mortgage administrator's licence.

Delivery agent for CMHC

10. A person or entity is exempted from the requirement in section 2, 3 or 4 of the Act to have a brokerage licence when it acts as agent for the Canada Mortgage and Housing Corporation pursuant to section 6 of the National Housing Act (Canada).

Intermediaries

11. A person or entity is exempted from the requirement in section 3 or 4 of the Act to have a brokerage licence if the person or entity carries on the business of trading in mortgages or as a mortgage lender solely through a mortgage brokerage or a person or entity that is exempted from the requirement to have a brokerage licence.

Directors, employees, etc. of persons and entities not required to be licensed

12. A director, partner, officer or employee of a person or entity that is not required to have a brokerage licence under section 2 or 3 of the Act, or a member of the directing body of such an entity, is exempted from the requirement in section 2 or 3 of the Act to have a mortgage broker's or agent's licence if the individual deals or trades in mortgages solely on behalf of the person or entity in the ordinary course of his or her duties.

Consumer reporting agencies

13. (1) A consumer reporting agency registered under the Consumer Reporting Act is exempted from the requirement in section 2 of the Act to have a brokerage licence if both of the following circumstances apply:

  1. The agency, in the course of acting as a consumer reporting agency, engages in an activity described in paragraph 2 of subsection 2 (1) of the Act.
  2. The agency does not hold itself out as engaging in any activity described in subsection 2 (1) of the Act, except as described in paragraph 1 of this subsection, or otherwise as dealing in mortgages.

(2) A director, partner, officer or employee of a consumer reporting agency registered under the Consumer Reporting Act is exempted from the requirement in section 2 of the Act to have a mortgage broker's or agent's licence when he or she engages in an activity described in paragraph 2 of subsection 2 (1) of the Act in the ordinary course of his or her duties.

Trading, administering re mortgage-backed securities

14. (1) A person or entity is exempted from the requirement in section 3 of the Act to have a brokerage licence or a mortgage broker's or agent's licence if the person or entity carries on the business of trading in mortgages or trades in mortgages solely in connection with mortgage securitization.

(2)  A person or entity is exempted from the requirement in section 5 of the Act to have a mortgage administrator's licence when the person or entity carries on the business of administering only those mortgages that constitute the assets backing mortgage-backed securities.

(3) In this section,

“mortgage-backed securities” means securities, as defined in the Securities Act, that represent an interest in, or obligations backed by, a discreet pool of mortgages;
“mortgage securitization” means the pooling of mortgages for the purpose of creating mortgage-backed securities.

Acting for financial institution or Crown

15. A person or entity is exempted from the requirement in section 5 of the Act to have a mortgage administrator's licence if the person or entity carries on the business of administering mortgages solely on behalf of,

  1. a financial institution; or
  2. the Crown in right of Canada or a province.