Mortgage professionals have a legal and moral obligation to report misconduct, terminations and other suitability concerns to FSRA. This approach helps protect consumers and uphold market integrity.
By law, brokerages and principal brokers must report:
- agents or brokers who may be unsuitable to be licensed
- when they are terminating sponsorship of an agent or broker’s licence
When it comes to unsuitable conduct, FSRA would include:
- forgery, fabricating documents or fraud
- misrepresentation to borrowers, lenders or investors
- conducting mortgage business and/or accepting remuneration outside of the sponsoring brokerage
- criminal charges or convictions
- regulatory breaches with FSRA or another regulatory/licensing body
FSRA reviews every report to determine the reported agent or broker’s suitability for licensing. The review continues even if the agent or broker has transferred to a new brokerage. Reviews may result in:
- revoking or suspending a licence
- imposing conditions on a licence
- imposing administrative penalties
- issuing a letter of warning
- closing a file due to no findings or insufficient evidence
- closing a file because the activities are outside FSRA’s jurisdiction (and we may refer to other authorities)
Principal brokers have two options for submitting termination reports through Licensing Link.
- Termination: notify FSRA the brokerage is terminating sponsorship of an agent or broker and there were no conduct issues to report.
- Termination for cause: notify FSRA the brokerage is terminating sponsorship of an agent or broker, and there is misconduct to be reported.
After a termination report is submitted, the agent or broker’s licence will immediately be suspended. The suspension will remain in effect until a transfer request to a new brokerage is received or the licence expires.
While the licence is suspended, the agent or broker is not allowed to deal or trade in mortgages in Ontario.
By law, FSRA cannot decline a transfer to another brokerage. The new sponsoring principal broker is encouraged to contact the previous brokerage to discuss the transfer.
Termination for cause
If a termination for cause report is submitted, FSRA will request information from the brokerage. FSRA uses this information to make a licensing decision and determine if other regulatory actions are necessary.
We require principal brokers to promptly provide complete and accurate details or documentation about the following to support the misconduct:
- reason for termination
- evidence of misconduct
- date(s) of occurrences
- how and when the principal broker or the brokerage identified the misconduct
When a principal broker identifies misconduct, FSRA expects them to understand the root cause, and assess whether it’s an isolated or systemic issue. If the issue is bigger, the brokerage must take steps to prevent future occurrences.