Mortgage brokerage Annual Information Return for 2022

Mortgage Brokerages, Lenders and Administrators Act, 2006

AIR guide

Welcome to the 2022 Annual Information Return (AIR). The Financial Services Regulatory Authority of Ontario (FSRA) uses the information you provide in the AIR to help identify, assess and monitor risk in the mortgage brokering sector. The deadline to file the AIR is by March 31, 2023. The reporting period is January 1 to December 31, 2022; you must file even if you did not conduct any business during the reporting period.

Before you proceed

Only the Principal Broker of the licensed mortgage brokerage can complete and submit the AIR. If you fail to file the AIR on time, FSRA may take steps to suspend or revoke your mortgage brokerage licence. You may also be subject to an administrative monetary penalty. Any missed deadline will result in a warning letter on your file, which may increase the level of future enforcement action taken by FSRA.

Please note that any inquiries made to FSRA regarding the AIR must be made directly by the Principal Broker.

If you are a franchisor, do not report for your franchisees.

What you need to complete the AIR

• Internet requirements: Secure high-speed internet connection; JavaScript, cookies, pop-ups. Recommended browsers - Google Chrome, Mozilla FireFox and Microsoft Edge. Internet Explorer is not supported.
• brokerage licence number
• errors and omissions insurance policy number and expiry date
• total number and location of offices in Canada
• dollar value of mortgages brokered in Canada, by region
• download and review the Questionnaire in advance to determine what additional information you may need.

Completing the AIR

• data is automatically saved when entered into the AIR and when navigating to a new question
• all questions must be answered as applicable
• questions can be answered in any order
• use the “Tab” key and/or mouse to navigate through items on each page
• use the links in the menu on the left to navigate to different parts of the AIR
• you are able to print a copy of the AIR at anytime by clicking on the printer icon in the upper right-hand corner of the page
• pages that are incomplete or that have errors will be identified with an Asterix (*) in the navigation menu on the left
• to file the AIR with FSRA, click “Submit” on the Attestation page

Refer to the AIR Frequently Asked Questions for additional tips. You may also click on the camera icon located in the upper right corner of the screen to submit a question regarding any technical difficulties with the AIR.

Note: Consistent with FSRA’s role in deterring deceptive or fraudulent conduct, practices and activities by the regulated sectors pursuant to s. 3(1)(g) of the Financial Services Regulatory of Authority of Ontario Act, 2016, FSRA collaborates with other organizations, including fraud prevention organizations and law enforcement agencies, to help combat unlawful activity. Please be advised that the information you provide in the AIR may be shared with such organizations.

On average, entering information for the AIR online will require approximately 60 minutes to several hours to complete. Should you require additional time, you may return at a later time and date to complete the AIR.

If you have finished reading and understand the instructions, please proceed to the next page to begin.

General information

The information listed on this page represents information on file with FSRA as of December 31, 2022:

Legal Name of Brokerage:
Other Authorized Name:
Brokerage Licence Number:
Business Type:
Principal Broker:
Broker Licence Number:

Does the brokerage have a CRA business number?  ▢ Yes     ▢ No
(If yes) CRA business number for the brokerage (9 digit):

If No, provide an explanation why the brokerage does not have a CRA Business Number:

Principal place of business address
Street Address:
Apt. / Unit:
City:
Province:
Postal code:

Mailing Address (Check if same as above) ▢
Street Address:
Apt. / Unit:
City:
Province:
Postal code:

Phone Number:
Fax Number:
Principal Broker E-mail address:

Consumer complaints E-mail address*:

*Please indicate the email address to which consumers should direct complaints and/or general inquiries. This email address may be posted on the public register and may be provided to the public for the purpose of contacting the brokerage.

NOTE: If any of the above information has changed, you are required to notify the Financial Services Regulatory Authority of Ontario (FSRA) within 5 business days of the change by email at: [email protected]

THE ANNUAL INFORMATION RETURN AND ALL OF ITS QUESTIONS PERTAIN TO THE PERIOD COVERING JANUARY 1 TO DECEMBER 31, 2022. UNLESS OTHERWISE STATED THE RETURN IS DUE NO LATER THAN MARCH 31, 2023.

REMINDER: The brokerage must file if it was licensed anytime between January 1, 2022 and December 31, 2022 whether or not it conducted business.

If you are a Franchisor, do not report for your Franchisees.

Reporting changes

It is required to notify the Financial Services Regulatory Authority of Ontario (FSRA) within 5 business days of a change to the general information of an administrator by email at: [email protected]

Did any of the following information change during the reporting period, and did you report the changes to FSRA by email at [email protected]: (Check all that apply)

Brokerage information	Changed? (Yes/No)	Reported? (Yes/No)
Address for Service	▢     ▢	▢     ▢
Address of Principal Place of Business	▢     ▢	▢     ▢
Email, Phone or Fax	▢     ▢	▢     ▢
Officers or Directors	▢     ▢	▢     ▢
Partners in Partnership	▢     ▢	▢     ▢
E&O Insurance	▢     ▢	▢     ▢
Open/Closed Offices	▢     ▢	▢     ▢

If No, to reporting any changes above, explain why the change was not reported.

Brokerage information

a. E&O Insurance Provider

(i) Indicate the liability limits under your current E&O Policy.

b. Policy Number:

c. Expiry Date:

d. Upload a copy of the brokerage’s Errors & Omissions Insurance Certificate:

e. Is your Errors & Omissions insurance policy in force?

f. Did your Errors & Omissions insurance policy lapse at any point during the reporting period?

g. Is your brokerage a franchise or part of a network?

h. If the brokerage or its related persons/entities* is also licensed as a mortgage administrator with FSRA, enter the administrator licence number here:

i. Is the brokerage’s primary line of business mortgage brokering?

j. What other lines of business was the brokerage engaged in?

k. Is the brokerage or its related persons/entities* a member of The Mutual Fund Dealers Association of Canada (MFDA)?

l. Is the brokerage or its related persons/entities* registered as an insurance brokerage under insurance legislation in any Canadian jurisdiction?

m. Is the brokerage or its related persons/entities* registered as a dealer or adviser under securities regulation in any Canadian jurisdiction?

n. Is the brokerage or its related persons/entities* registered as a real estate brokerage in any Canadian jurisdiction?

o. Does the brokerage or its related persons/entities* hold any other licences including mortgage brokerage or mortgage administrator licences in other provinces?

p. Is the brokerage a publicly traded company?

q. If no, is the brokerage related to a publicly traded company?

r. Is the brokerage registered with Financial Transactions and Reports Analysis Centre (FINTRAC)?

NOTE: This question is for information gathering purposes only. Registration with FINTRAC is not a mandated requirement.

Trust account information

The purpose of these questions is to verify compliance with legal obligations under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA)

1. Did the brokerage have a trust account(s) during the reporting period?

2. Was there a shortfall, at any time, in any of the trust accounts?

Supervision of operations

The purpose of these questions is to determine whether the brokerage’s operations are organized in a way that facilitates supervision and to facilitate examination/inspection preparation by the brokerage and planning by FSRA.

3. Indicate the total number of Beneficial Owners of the brokerage, including those who are also Directors, Officers, Partners as at December 31, 2022.

4. Provide the following information about the brokerage’s offices for each Ontario region as at December 31, 2022 as applicable:

5. How many offices did the brokerage have in Canada, outside of Ontario, as at December 31, 2022?

6. Select all applicable steps taken (as described in your Policies and Procedures) by the brokerage during the reporting period to provide adequate supervision for all offices in Ontario where business was transacted.

7. Did your brokerage deal or trade in mortgages in other Canadian provinces/territories during the reporting period?

8. Provide the following information about the number of brokers and agents licensed by the brokerage in Ontario as at December 31, 2022:

9. Have you reviewed the brokerage’s Policies and Procedures?

10. Does the brokerage have enhanced suitability assessments, supervisory controls, and disclosure requirements for agents and brokers that lend their own funds in its Policies and Procedures?

11. On August 18, 2022 FSRA and the Mortgage Broker Regulators’ Council of Canada (MBRCC) released guidance on cybersecurity preparedness. Does the brokerage have in place or is the brokerage working towards achieving cybersecurity preparedness as described in the guidance?

12. How many clients does the brokerage have in its database?

For the purposes of the AIR, a “client” refers to anyone from whom the brokerage has collected and retained personal information in its database.

13. FSRA’s cybersecurity guidance indicates that brokerages and administrators should notify FSRA if they experience a cybersecurity incident that could have a material impact on client information. When FSRA becomes aware of a cybersecurity incident through notification by a licensee, market intelligence, a tip or complaint, it will activate FSRA’s Market Conduct Protocol for Cybersecurity as described in the guidance.

During the reporting period did you experience a cybersecurity incident that did not have a material impact on client information and therefore did not require notification to FSRA?

14. How often are the brokerage’s mortgage transactions completed fully remotely, in which the client (including borrowers and lenders/investors) was never met in person?

Records information

The purpose of these questions is to facilitate examination/inspection/planning.

15. What format were your required records stored in? (check all that apply)

Portfolio details / information

(The purpose of these questions is to gather marketplace statistics)

Where mortgage specifics, such as number or dollar value of mortgages are requested, please provide the information as of December 31, 2022.

16. Did the brokerage carry out the business of dealing in mortgages as defined by the MBLAA during the reporting period?

17. Did the mortgage brokerage broker mortgages for borrowers or lenders that fall within Shared Equity Mortgage Programs (SEM)?

Shared Equity Mortgage Programs (SEM): is an arrangement under which a lender and a borrower share ownership of a property. Please refer to Shared Equity homeownership webpage for more information.

18. Did the mortgage brokerage broker any crypto-backed mortgages in the reporting period?

19. Provide the # and $ value for the following types of mortgages brokered and closed by the brokerage during the reporting period:

20. Provide the following information regarding the brokerage’s business funded by these lenders:

21. Did the brokerage carry out the business of trading in mortgages as defined by MBLAA during the reporting period?

22. Did the brokerage carry out the business of lending in mortgages as defined by MBLAA during the reporting period?

Mortgage investment corporation

The questions in this section are intended for information gathering purposes only, and not for compliance purposes.

NOTE: For the purpose of the AIR, a Mortgage Investment Corporation (MIC) is an investment/lending company designed specifically for mortgage investing or lending, in Canada, and governed by the Income Tax Act.

The MIC is organized for investing in pools of mortgages, primarily residential, and manages a diversified and secured portfolio of mortgages. Profits generated by the MIC are distributed to its shareholders according to their proportionate share.

23. Did the principal broker, officers or directors of the brokerage have any equity interest including beneficial ownership in a Mortgage Investment Corporation (MIC) as at December 31, 2022?

24. Did the principal broker, officers, directors or controlling shareholders of the brokerage hold any management roles in a MIC in any jurisdiction as at December 31, 2022?

25. Provide the names of all MICs in which the principal broker, officers or directors of the brokerage hold any management roles or have any equity interest including beneficial ownership, that sold their units/shares/etc. to investors through a prospectus or Offering Memorandum filed with a securities commission.

Syndication

(The purpose of these questions is to verify compliance with legal obligations under the MBLAA and to gather marketplace statistics.)

26. Have you made any changes to your policies and procedures manual related to NQSMIs and the process surrounding Permitted Clients class determination since the last NQSMI Quarterly report submitted to FSRA (if no report was ever submitted, please select “Yes”)?

27. Did you deal and/or trade in NQSMI during the reporting period of January 1, 2022 to December 31, 2022?

First NQSMI Quarterly Reporting
28. Did you file the NQSMI Quarterly Reporting for the period of July 1, 2021, to September 30, 2021?

Second NQSMI Quarterly Reporting
29. Did you file the NQSMI Quarterly Reporting for the period of October 1, 2021, to December 31, 2021??

NQSMI portfolio details – reporting period of January 1, 2022 to December 31, 2022 brokered and closed NQSMI transactions

30. For the reporting period of January 1, 2022, to December 31, 2022, did the brokerage broker and close any non-qualified syndicated mortgages (brokered or co-brokered)?

31. Please download and answer the questions relating to your NQSMI Portfolio details in the attached excel file.

Click on the Excel icon on the right to download Excel template, and use 'Arrow Up' button next to it, to upload completed template.

Please note that only the original excel file can be uploaded, any changes in formatting in the excel file will not be accepted. Please ensure the information in the Excel Spreadsheet is completed in a continuous fashion and that there are no empty rows when completing each tab.

32. For Legacy NQSMI mortgages issued before July 1, 2021, how many non-qualified syndicated mortgages were contractually extended between January 1, 2022 and December 31, 2022?

33. Did the brokerage refer any clients to other licensed brokerages to invest in non-qualified syndicated mortgages in the 2022 calendar year?

Complaints and complaint handling

34. Is the person designated to receive complaints at the brokerage the principal broker?

35. Total number of written complaints received by the brokerage during the reporting period:

Suitability

The purpose of these questions is to help further determine if the mortgage brokerage is suitable to continue to be licensed.

36. Were there any E&O claims made against the brokerage during the reporting period in any Canadian jurisdiction, during the reporting period?

37. During the reporting period, was the brokerage or any of its Directors, Officers or Partners fined or were any monetary penalties imposed by any other Canadian regulator, excluding FSRA?

38. During the reporting period, did the brokerage or any of its Directors, Officers or Partners have any overdue fines/monetary penalties owing to any Canadian financial services regulator excluding FSRA?

39. During the reporting period, was the brokerage or any of its Directors, Officers or Partners fined or were any monetary penalties imposed by any Provincial/Federal courts?

40. During the reporting period, was the brokerage or any of its Directors, Officers or Partners subject to any charges laid under the laws of any Canadian province/territory?

41. During the reporting period, were any licences the brokerage or any of its Directors, Officers or Partners held from a government agency, regulatory body or professional organization revoked or suspended?

42. During the reporting period, was the brokerage or any of its Directors, Officers or Partners named in a lawsuit (Statement of Claim, Counterclaim or Third-party Claim)?

Remuneration

43. Did your brokerage receive monetary or non-monetary incentives from lenders?

44. Did your brokerage offer monetary or non-monetary incentives to other parties?

45. Did your brokerage receive contingency commission (i.e., volume bonus) or payment arrangements with any lenders?

46. Did your brokerage have tri-party compensation agreements for non-monetary incentives between your brokerage, brokers/agents, and other brokerages?

47. How many brokers and/or agents are remunerated through a personal corporation?

48. Describe your compensation structure in the first year and beyond for brokers/agents?

49. What percentage of your brokers/agents receive the following split of fees paid to the brokerage? (Percentage of commission and/or brokerage fee paid to the broker/agent)

50. What are the key factors you consider when establishing a commission/fee split with brokers/agents?

Referrals

51. During the reporting period, did the mortgage brokerage make any referrals to other mortgage brokerages?

52. During the reporting period, did the mortgage brokerage receive any referrals from other mortgage brokerages?

53. During the reporting period, did the mortgage brokerage receive any simple referrals from unlicensed entities?

Consumer profile

The purpose of this section is to get a better understanding of consumer demographics serviced by the mortgage brokering industry

For the purposes of this section:

• clients/consumers = individual (non-entity) borrowers, unless otherwise specified
• data is requested for closed transactions, during the reporting period
• For the first year, these questions will be optional. Brokerages will have the opportunity to arrange for data collection/reporting for these questions to be completed on the 2022 AIR.
• The assessment criteria are evaluated both individually and in the context of the whole picture of the brokerage’s business operations. No one indicator is a deciding factor in whether a brokerage is selected for examination.

54. Did the brokerage represent individual (non-entity) borrowers in mortgage transactions brokered and closed in 2022?

55. What percentage of the brokerage’s individual (non-entity) borrowers fall into each of the following age ranges? (Help Tip: including all individual borrowers listed on mortgage application, excluding guarantors)

56. For closed mortgage transactions during the reporting period, identify how many transactions had an average transaction TDS ratio within each of the following ranges.

*This includes transactions where TDS was not a decision factor for the lender (i.e., private lending may not use TDS as a decision factor, but it should still be a known number).

57. How many transactions included at least one borrower who was considered self-employed or who had variable income?

*Please include borrowers who had a mix of variable and stable income sources (e.g., base + commission, overtime, etc.) For further clarity, if the transaction had variable income, it should be counted, even if that income only represented a small portion of the total qualifying income.

Definition: Variable income is income that is not guaranteed or predictable such as commission, investment income, bonus, and all self-employed borrowers. This is in contrast to stable (or predictable) income such as salary, guaranteed hours, other guaranteed income.

_____ (#)

58. How many referrals did the brokerage, and its brokers/agents, receive from each of the following sources:

*Please include all known referrals (ad-hoc and pre-arranged), regardless of whether referral fees are required or have been paid/received.

59. In how many completed transactions did borrowers rely on the authority of a Power of Attorney?

_____ (#)

Closing questions 

(These Questions are for statistical purposes)

60. Do you use technology to automate the process, or part of the process, of collecting and verifying borrower information?

61. Do you use technology to automate the client needs assessment and advising process, in part or in full, when recommending what potential mortgage is most suitable for a client?

62. Do you use artificial intelligence or machine learning technology to automate decision-making processes, in part or in full, related to identifying potential mortgage options and/or making a final recommendation to clients?

63. Select the software used for collecting statistical data requested in the AIR (Select all that apply)?

64. How long did it take to gather the information and complete the AIR?

Hours:                               Minutes:

Attestation

CERTIFY THAT:
I am aware that it is an offence to make a false statement to the FSRA Chief Executive Officer under the Mortgage Brokerages, Lenders and Administrators Act, 2006, and that the information provided in this Annual Information Return is true to the best of my knowledge and belief.

 

NOTE: Only the principal broker of the brokerage can submit this Annual Information Return. The above name must match the name on the principal broker's licence.