FSRA Releases Final Guidance to Increase Regulatory Efficiency in Syndicated Mortgage Investments
The Financial Services Regulatory Authority of Ontario (FSRA) is increasing regulatory efficiency in the syndicated mortgage investment (SMI) market.
FSRA is preparing to transfer regulatory oversight of certain SMIs to the Ontario Securities Commission (OSC) effective July 1, 2021, subject to requisite approvals. In August 2020, FSRA consulted on its draft Approach Guidance for supervising mortgage brokerages and administrators that engage in SMIs. FSRA is now publishing final guidance that addresses comments we received.
In response to feedback to improve regulatory efficiency, government regulation and FSRA's Approach Guidance were revised. Brokerages dealing and/or trading in certain SMIs may now be exempt from licensing with FSRA if they are registered with the OSC and their activities do not require them to be licensed with FSRA. The exemption depends on the type of regulated activities that brokerages are conducting and the class of investors or lenders and/or borrowers they are dealing with.
For SMI transactions that will have taken place on or after July 1, 2021, the following guidance documents apply:
- Supervision Approach for Non-Qualified Syndicated Mortgage Investments with Permitted Clients and Legacy Non-Qualified Syndicated Mortgage
- Mortgage Brokerage Disclosure and Suitability Assessments for Non-Qualified Syndicated Mortgage Investments (NQSMIs) – Responses to Market Disruptions
For SMI transactions that will have taken place before July 1, 2021, please see updated versions of previously-issued guidance:
- Supervision Approach for High-risk Syndicated Mortgage Investments
- Amended Disclosure Forms 3.0, 3.1 and 3.2 for Non-Qualified Syndicated Mortgages
- Mortgage Brokerage Disclosure and Suitability Assessments for Non-Qualified Syndicated Mortgage Investments (NQSMIs) - Responses to Market Disruptions
FSRA, the OSC and the Ministry of Finance continue to work collaboratively to facilitate the transfer of regulatory oversight of certain SMIs from FSRA to the OSC.
FSRA is continuing to work with those we regulate to ensure financial safety, fairness and choice for consumers and members. Learn more at www.fsrao.ca.