O. Reg. 407/07: EXEMPTIONS FROM THE REQUIREMENTS TO BE LICENSED
filed July 27, 2007 under Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c. 29
Skip to contentONTARIO REGULATION 407/07
made under the
MORTGAGE BROKERAGES, LENDERS AND ADMINISTRATORS ACT, 2006
Made: July 25, 2007
Filed: July 27, 2007
Published on e-Laws: July 31, 2007
Printed in The Ontario Gazette: August 11, 2007
EXEMPTIONS FROM THE REQUIREMENTS TO BE LICENSED
CONTENTS
When providing information to a prospective borrower | |
When providing information to a prospective lender | |
When dealing in mortgages | |
When trading in mortgages | |
When administering mortgages | |
For trustees in bankruptcy | |
When acting under court order | |
For certain statutory corporations | |
For directors, employees, etc., of Crown agencies | |
For directors, employees, etc., of certain exempted persons and entities | |
For consumer reporting agencies | |
For registered dealers | |
In connection with mortgage securitization | |
When acting through an intermediary | |
When acting through an intermediary | |
When acting for the Crown | |
When acting for a financial institution, etc. | |
For collection agencies | |
In connection with mortgage-backed securities | |
Commencement | |
Exemptions for Simple Referrals
When providing information to a prospective borrower
1. (1) A person or entity who refers a prospective borrower to a prospective mortgage lender is exempted under subsection 6 (4) of the Act 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 and criteria:
1. Before or at the time of making the referral, the person or entity informs the prospective borrower in writing,
i. 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
ii. 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 is permitted to give to the prospective borrower is the name, address, telephone number, fax number, email address or website address of the prospective lender or of an individual who acts on behalf of the prospective lender.
(2) Nothing in subsection (1) affects the right of a person or entity who does not have a brokerage licence or a mortgage broker’s or agent’s licence to refer a prospective borrower to a prospective lender for no fee or other remuneration.
When providing information to a prospective lender
2. (1) A person or entity who refers a prospective mortgage lender to a prospective borrower is exempted under subsection 6 (5) of the Act 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 and criteria:
1. Before making the referral, the person or entity informs the prospective borrower in writing,
i. 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
ii. of the nature of the relationship between the person or entity and the prospective lender.
2. The person or entity then obtains the prospective borrower’s written consent to give specified information to the prospective lender.
3. The only information that the person or entity is permitted to give to the prospective lender is the name, address, telephone number, fax number, email address or website address of the prospective borrower or of an individual who acts on behalf of the prospective borrower.
4. The person or entity does not give the prospective lender any information about the prospective borrower other than the information that is authorized by both paragraph 3 and the written consent of the prospective borrower.
(2) Nothing in subsection (1) affects the right of a person or entity who does not have a brokerage licence or a mortgage broker’s or agent’s licence to refer a prospective lender to a prospective borrower for no fee or other remuneration.
When dealing in mortgages
3. A lawyer is exempted under subsection 6 (6) of the Act from the requirement under 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 exist:
1. The lawyer, acting in his or her professional capacity as a lawyer on behalf of a client,
i. solicits a person or entity to lend money on the security of real property, or
ii. 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.
When trading in mortgages
4. A lawyer is exempted under subsection 6 (6) of the Act 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 exist:
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.
When administering mortgages
5. A lawyer is exempted under subsection 6 (6) of the Act from the requirement in section 5 of the Act to have a mortgage administrator’s licence if both of the following circumstances exist:
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.
Exemptions for Other Persons and Entities
For trustees in bankruptcy
6. A person or entity who is acting as a trustee in bankruptcy is exempted under subsections 6 (7) and (9) of the Act from any requirement to have a brokerage licence or a mortgage administrator’s licence.
When acting under court order
7. A person or entity who is acting under an order of the Superior Court of Justice is exempted under subsections 6 (7) and (9) of the Act from any requirement to have a brokerage licence or a mortgage administrator’s licence.
For certain statutory corporations
8. The following corporations are exempted under subsections 6 (7) and (9) of the Act from any requirement to have a brokerage licence or a mortgage administrator’s licence:
1. Eastern Ontario Development Corporation.
2. Northern Ontario Development Corporation.
3. Ontario Development Corporation.
4. Ontario Infrastructure Projects Corporation.
5. Ontario Mortgage and Housing Corporation.
6. Ontario Realty Corporation.
For directors, employees, etc., of Crown agencies
“Crown agency” means an agency of the Crown in right of Ontario, Canada or another province or territory of Canada.
(2) Every individual who is an officer or employee of a Crown agency or is a director, partner or member of the governing body of a Crown agency is exempted under subsection 6 (8) of the Act from the requirement in section 2 or 3 of the Act to have a mortgage broker’s or agent’s licence if he or she deals or trades in mortgages solely on behalf of the Crown agency in the ordinary course of his or her duties.
For directors, employees, etc., of certain exempted persons and entities
“exempted person or entity” means a person or entity who is exempted under subsection 6 (4), (5), (6) or (7) of the Act from the requirement in section 2 or 3 of the Act to have a brokerage licence.
(2) Every individual who is an officer or employee of an exempted person or entity or is a director, partner or member of the governing body of such a person or entity is exempted under subsection 6 (8) of the Act from the requirement in section 2 or 3 of the Act to have a mortgage broker’s or agent’s licence if he or she deals or trades in mortgages solely on behalf of the person or entity in the ordinary course of his or her duties.
(3) Despite subsection (2), if there are conditions or restrictions that apply with respect to the exempted person’s or entity’s exemption, the individual’s exemption is subject to corresponding restrictions.
exemptions for dealing in mortgages
For consumer reporting agencies
11. A consumer reporting agency registered under the Consumer Reporting Act is exempted under subsection 6 (7) of the Mortgage Brokerages, Lenders and Administrators Act, 2006 from the requirement in section 2 of the Act to have a brokerage licence if both of the following circumstances exist:
1. In the course of acting as a consumer reporting agency, the agency provides information about prospective borrowers to prospective mortgage lenders, whether or not the Act governs the lenders.
2. The agency does not hold itself out as otherwise dealing in mortgages.
exemptions for trading in mortgages
For registered dealers
12. A person or entity who is registered as a dealer under the Securities Act is exempted under subsection 6 (7) of the Mortgage Brokerages, Lenders and Administrators Act, 2006 from the requirement under section 3 of the Act to have a brokerage licence if the following circumstances exist:
1. The person or entity, acting on its own behalf, buys, sells or exchanges mortgages with one or more of the following persons or entities or, acting on its own behalf, solicits one or more of the following persons or entities to buy, sell or exchange mortgages:
i. The Crown in right of Ontario, Canada or any province or territory of Canada.
ii. A brokerage acting on its own behalf.
iii. A financial institution.
iv. A corporation that is a subsidiary of a person or entity described in paragraph 1, 2 or 3.
v. A corporation that is an approved lender under the National Housing Act (Canada).
vi. An administrator or trustee of a registered pension plan within the meaning of subsection 248 (1) of the Income Tax Act (Canada).
vii. A person or entity who is registered as an adviser or dealer under the Securities Act when the person or entity is acting as a principal or as an agent or trustee for accounts that are fully managed by the person or entity.
viii. A person or entity who is registered under securities legislation in another province or territory of Canada with a status comparable to that described in paragraph vii when the person or entity is acting as a principal or as an agent or trustee for accounts that are fully managed by the person or entity.
ix. A person or entity in respect of which all of the owners of interests, except the voting securities required by law to be owned by directors, are persons or entities described in subparagraphs i to viii.
2. The person or entity does not hold themself out as otherwise trading in mortgages.
3. The person or entity is not otherwise required to be licensed.
In connection with mortgage securitization
13. (1) A person or entity is exempted under subsection 6 (7) of the Act from the requirement in section 3 of the Act to have a brokerage licence if both of the following circumstances exist:
1. The person or entity carries on the business of trading in mortgages in connection with mortgage securitization.
2. The person or entity is not otherwise required to be licensed.
(2) In this section,
“mortgage securitization” means the creation of securities, as defined in the Securities Act, that represent an interest in, or obligations backed by, a mortgage or a discrete pool of mortgages.
When acting through an intermediary
14. A person or entity is exempted under subsection 6 (7) of the Act from the requirement in section 3 of the Act to have a brokerage licence if the person or entity buys, sells or exchanges mortgages on its own behalf through a mortgage brokerage or a person or entity that is exempted from the requirement to have a brokerage licence.
exemptions for mortgage lending
When acting through an intermediary
15. A person or entity is exempted under subsection 6 (7) of the Act from the requirement in section 4 of the Act to have a brokerage licence if the person or entity carries on business 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.
exemptions for administering mortgages
When acting for the Crown
16. A person or entity is exempted under subsection 6 (9) of the Act 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 on behalf of the Crown in right of Ontario, Canada or another province or territory of Canada and if the person or entity is not otherwise required to be licensed.
When acting for a financial institution, etc.
17. (1) A person or entity is exempted under subsection 6 (9) of the Act 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 on behalf of a financial institution or finance company and if the person or entity is not otherwise required to be licensed.
(2) For the purposes of this section,
“affiliate”, with respect to a corporation, has the same meaning as in the Business Corporations Act;
“finance company” means a corporation or partnership, other than a financial institution, that satisfies both of the following criteria:
1. A material business activity of the corporation or partnership involves making or refinancing loans, or entering into other similar arrangements for advancing funds or credit.
2. The shares or ownership interests of the corporation or partnership, or of another person or entity with which it 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).
(3) For the purposes of the definition of “finance company” in subsection (2), a partnership is affiliated with another person or entity if one of them is controlled by the other or if both are controlled by the same person or entity.
For collection agencies
18. A collection agency that is registered under the Collection Agencies Act is exempted under subsection 6 (9) of the Mortgage Brokerages, Lenders and Administrators Act, 2006 from the requirement in section 5 of the Act to have a mortgage administrator’s licence if both of the following circumstances exist:
1. In the course of acting as a collection agency, the agency takes steps, on behalf of another person or entity, to enforce payment by borrowers under mortgages.
2. The agency does not hold itself out as engaging in any other activity described in subsection 5 (1) of the Act or otherwise as administering mortgages.
In connection with mortgage-backed securities
19. (1) A person or entity is exempted under subsection 6 (9) of the Act 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.
(2) In this section,
“mortgage-backed securities” means securities, as defined in the Securities Act, that represent an interest in, or obligations backed by, a mortgage or a discrete pool of mortgages.
Commencement