Consultation on ‘Enhancing strong conduct and compliance culture: The role of Mortgage Brokerages and Principal Brokers’

To help ensure homebuyers and mortgage investors are treated fairly, Ontario’s financial services regulator, FSRA, is proposing Guidance to raise the overall professionalism of the mortgage brokering sector.

The Guidance for mortgage brokerages and principal brokers sets out proposed practices to make principal brokers more effective at carrying out their responsibilities, including:

• ways a brokerage can ensure its principal broker acts with integrity, demonstrates professional competence, and has the necessary independence, authority and resources to satisfy their regulatory responsibilities. Brokerages can adapt the proposed practices to be appropriate for their size and operations.
• how principal brokers can demonstrate they are taking reasonable steps to ensure fair outcomes for consumers by effectively hiring, training and supervising suitable brokers and agents

FSRA’s proposed Guidance addresses concerns that some principal brokers are not as effective as they could be in influencing the strong conduct and compliance culture of their brokerages. A 2020 FSRA survey indicated that only 50% of principal brokers at brokerages with over 100 licensees had this authority.

The consultation period is now open and will close on June 28, 2024. FSRA invites stakeholders to review the proposed Guidance and submit their feedback.

Learn more:

• Proposed Guidance on ‘Enhancing strong conduct and compliance culture: The role of Mortgage Brokerages and Principal Brokers’

FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone.

Learn more at www.fsrao.ca.

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