Update – Burden Reduction for Syndicated Mortgage Investments

TORONTO DECEMBER 5, 2019 - The Financial Services Regulatory Authority of Ontario (FSRA) is committed to providing effective oversight of syndicated mortgage investments, balanced with reducing regulatory burden where appropriate.

On November 12, 2019, FSRA introduced a supervision approach to strengthen investor protections for higher-risk syndicated mortgage investments that are marketed to retail investors.

Now FSRA is introducing amended disclosure forms for non-qualified syndicated mortgages, with the aim of reducing regulatory burden when mortgage brokerages are working with more sophisticated investors, who are generally more knowledgeable and experienced with complex investments. The amended forms do not reduce the amount of disclosure or the obligations of mortgage brokerages that are dealing with retail investors. FSRA will periodically conduct reviews to assess compliance with requirements related to non-sophisticated investors and will take regulatory action where appropriate. 

The amended forms reflect feedback received through consultations with industry participants, who expressed support for reducing burden when mortgage brokerages are working with sophisticated investors.

Update

FSRA is giving mortgage brokerages flexibility, where appropriate, in meeting the disclosure requirements for non-qualified syndicated mortgages, as outlined in Ontario Regulation 188/08 (Mortgage Brokerages: Standards of Practice) under the Mortgage Brokerages, Lenders and Administrators Act, 2006.

• Effective immediately, FSRA is allowing mortgage brokerages working with sophisticated investors to complete shorter versions of Forms 3.0, 3.1 and 3.2, which would be complemented by the use of their own disclosure documents in meeting the requirements under O. Reg. 188/08.
• Mortgage brokerages working with non-sophisticated investors must continue to address the disclosure requirements by completing the required sections of Forms 3.0, 3.1 and 3.2 (newly amended versions).
• This responds to stakeholder feedback regarding opportunities to reduce burden related to Forms 3.0, 3.1 and 3.2. 
• FSRA is now accepting electronic submissions of Forms 3.2 and 3.2.1. For details, please refer to our reference material.

FSRA’s approach to effective oversight of non-qualified syndicated mortgages also includes the requirement that mortgage brokerages make investors and FSRA aware of syndicated mortgages that bear the characteristics associated with a high-risk transaction. 

For More Information

To access the forms, please visit the Mortgage Brokering Forms page.

To see the responses and summary, please visit Supervision Approach for High-risk Syndicated Mortgages.