Draft Regulations to Support the Transfer of Regulatory Authority for Syndicated Mortgage Investments
Regulation Number(s):
O. Reg. 188/08
O. Reg. 407/07
O. Reg. 407/07
Instrument Type:
Regulation - LGIC
Bill or Act:
Mortgage Brokerages, Lenders and Administrators Act, 2006
Summary of Decision:
Amendments to O. Reg. 188/08 (Mortgage Brokerages: Standards of Practice) were made to remove certain requirements on all non-qualified syndicated mortgages. These amendments also streamline remaining obligations for non-qualified syndicated mortgages that will remain under FSRA's authority. The changes include:
- Adding a definition for Permitted Clients, a class that includes most institutions, corporations, and high net-worth individuals (over $5 million in assets). Non-qualified syndicated mortgage transactions with solely permitted clients will remain under FSRA's regulatory oversight;
- Removing or varying disclosure requirements for Permitted Clients in relation to transactions involving non-qualified syndicated mortgages to appropriately reduce regulatory burden on sophisticated entities.
Amendments to O. Reg. 407/07 (Exemptions from the Requirements to be Licensed), exempt securities dealers from licensing requirements under the MBLAA when they are dealing and trading in syndicated mortgage investments with non-permitted client investors and permitted client investors and borrowers.
Both regulations will come into force on July 1, 2021.
- Adding a definition for Permitted Clients, a class that includes most institutions, corporations, and high net-worth individuals (over $5 million in assets). Non-qualified syndicated mortgage transactions with solely permitted clients will remain under FSRA's regulatory oversight;
- Removing or varying disclosure requirements for Permitted Clients in relation to transactions involving non-qualified syndicated mortgages to appropriately reduce regulatory burden on sophisticated entities.
Amendments to O. Reg. 407/07 (Exemptions from the Requirements to be Licensed), exempt securities dealers from licensing requirements under the MBLAA when they are dealing and trading in syndicated mortgage investments with non-permitted client investors and permitted client investors and borrowers.
Both regulations will come into force on July 1, 2021.
Analysis of Regulatory Impact:
The proposed regulatory amendments would provide significant regulatory burden reduction for sophisticated entities that are Permitted Clients, such as banks, pension plans, and other corporations, when transacting in non-qualified syndicated mortgage investments.
Further Information:
O. Reg. 188/08Proposal Number:
20-MOF003
Posting Date:
July 31, 2020
Summary of Proposal:
Proposed amendments to O. Reg. 188/08 (Mortgage Brokerages: Standards of Practice) are required to remove certain requirements on all non-qualified syndicated mortgages. These amendments will also streamline remaining obligations for non-qualified syndicated mortgages that will remain under FSRA's authority. The proposed changes would include:
- Adding a definition for Permitted Clients, a class that includes most institutions, corporations, and high net-worth individuals (over $5 million in assets). Non-qualified syndicated mortgage transactions with solely permitted clients will remain under FSRA's regulatory oversight;
- Removing various disclosure requirements for Permitted Clients in relation to transactions involving non-qualified syndicated mortgages to appropriately reduce regulatory burden on sophisticated entities.
Proposed amendments to O. Reg. 407/07 (Exemptions from the Requirements to be Licensed), which would exempt securities dealers from licensing requirements under the MBLAA when they are dealing and trading in syndicated mortgage investments with non-permitted client investors.
- Adding a definition for Permitted Clients, a class that includes most institutions, corporations, and high net-worth individuals (over $5 million in assets). Non-qualified syndicated mortgage transactions with solely permitted clients will remain under FSRA's regulatory oversight;
- Removing various disclosure requirements for Permitted Clients in relation to transactions involving non-qualified syndicated mortgages to appropriately reduce regulatory burden on sophisticated entities.
Proposed amendments to O. Reg. 407/07 (Exemptions from the Requirements to be Licensed), which would exempt securities dealers from licensing requirements under the MBLAA when they are dealing and trading in syndicated mortgage investments with non-permitted client investors.
Contact Address:
Gina Stephens
Financial Services Policy Division
Ministry of Finance
4th Floor
95 Grosvenor St.
Toronto, Ontario
M7A 1Y8
Financial Services Policy Division
Ministry of Finance
4th Floor
95 Grosvenor St.
Toronto, Ontario
M7A 1Y8
Effective Date:
July 1, 2021
Decision:
Approved
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