ontario regulation 186/08

made under the

mortgage brokerages, lenders and administrators act, 2006

Made: June 4, 2008
Filed: June 6, 2008
Published on e-Laws: June 9, 2008
Printed in The Ontario Gazette: June 21, 2008


Amending O. Reg. 407/07

(Exemptions from the Requirements to be Licensed)

1. (1) Ontario Regulation 407/07 is amended by adding the following sections:

For personal corporation of broker, agent

8.1 (1) In this section,

“member brokers and agents” means, in respect of a corporation, every broker or agent who is an employee or shareholder of the corporation.

(2) Expressions used in this section have the same meaning as in the standards of practice prescribed for brokerage licences.

(3) A corporation is exempted under subsection 6 (7) of the Act from any requirement to have a brokerage licence if all of the following circumstances exist:

1. Every member broker and agent of the corporation is authorized to deal or trade in mortgages on behalf of a particular brokerage.

2. The corporation does not carry on the business of dealing or trading in mortgages otherwise than by providing the services of its member brokers and agents to the particular brokerage.

3. The corporation does not carry on business as a mortgage lender unless it does so solely through the particular brokerage.

4. The corporation and its member brokers and agents do not represent to the public in any manner, directly or indirectly, that the corporation carries on the business of dealing or trading in mortgages or carries on business as a mortgage lender.

5. The corporation does not receive, directly or indirectly, revenue for dealing or trading in mortgages from any person or entity other than the particular brokerage.

6. The member brokers and agents do not receive, directly or indirectly, fees or other remuneration for dealing or trading in mortgages from any person or entity other than the corporation or the particular brokerage.

7. The corporation does not, on behalf of the particular brokerage, directly or indirectly hold funds or other assets received from borrowers, lenders or investors in connection with dealing or trading in mortgages.

8. A majority of the corporation’s directors are member brokers and agents.

9. A majority of the equity of the corporation is legally and beneficially owned, directly or indirectly, by one or more of its member brokers or agents.

10. There is a written agreement between the particular brokerage and each member broker or agent governing the relationship between the brokerage and the broker or agent.

11. There is a written agreement between the corporation and the particular brokerage governing the relationship between the brokerage and the corporation and its member brokers and agents.

12. Under the agreement between the corporation and the particular brokerage, the corporation agrees not to hinder or obstruct the brokerage or its principal broker in the performance of their duties under the Act and not to obstruct or hinder the member brokers and agents in the performance of their duties under the Act.

13. Under the agreement between the corporation and the particular brokerage, the corporation agrees to provide whatever assistance may be reasonably necessary to enable the brokerage and its principal broker to comply with their duties under the Act and to enable the brokerage and its principal broker to ensure that the member brokers and agents are complying with their duties under the Act.

14. Under the agreement between the corporation and the particular brokerage, the corporation agrees to provide whatever assistance may be reasonably necessary to enable the brokerage to determine whether the circumstances entitling the corporation to the exemption established by this section exist.

For certain corporations (motor vehicle dealership financing)

8.2 (1) In this section,

“eligible mortgage” means a mortgage described in subsection (5);

“registered motor vehicle dealer” means a person who is registered under the Motor Vehicle Dealers Act as a motor vehicle dealer.

(2) This section applies to the following corporations:

1. BMW Canada Inc.

2. Consilium Automotive Acceptance Corporation.

3. DaimlerChrysler Financial Services Canada Inc.

4. DCFS Canada Corp.

5. Ford Credit Canada Limited.

6. General Motors Acceptance Corporation of Canada, Limited.

7. Honda Canada Finance Inc.

8. Nissan Canada Inc.

9. Porsche Financial Services Canada.

10. Toyota Credit Canada Inc.

11. VFS Canada Inc.

12. VW Credit Canada, Inc.

(3) A corporation listed in subsection (2) is exempted under subsection 6 (7) of the Act from the requirement in section 2, 3 or 4 of the Act to have a brokerage licence if the corporation deals or trades in, or lends money on the security of, eligible mortgages only and if it does not engage in other activities requiring a brokerage licence.

(4) A corporation listed in subsection (2) is exempted under subsection 6 (9) of the Act from the requirement in section 5 of the Act to have a mortgage administrator’s licence if the corporation administers eligible mortgages only and does not engage in other activities requiring a mortgage administrator’s licence.

(5) A mortgage is an eligible mortgage for the purposes of this section if all of the following conditions are satisfied:

1. One or more of the following persons or entities is either the borrower under the mortgage or guarantees payment of the mortgage:

i. a registered motor vehicle dealer,

ii. a person or entity with an ownership interest in a registered motor vehicle dealer,

iii. a person or entity in which a registered motor vehicle dealer has an ownership interest.

2. The mortgage loan is made for the purposes of the business for which the registered motor vehicle dealer requires the registration or for the purposes of another business that is ancillary to that business.

3. The real property that secures the mortgage loan is not a residential premises in whole or in part.

(2) The definition of “registered motor vehicle dealer” in subsection 8.2 (1) of the Regulation, as made by subsection (1), is revoked and the following substituted:

“registered motor vehicle dealer” means a person who is registered under the Motor Vehicle Dealers Act, 2002 as a motor vehicle dealer.

2. Section 10 of the Regulation is amended by adding the following subsection:

(4) This section does not apply to an individual who is an officer or employee of a corporation that is exempted under section 8.1 or to an individual who is a director, partner or member of the governing body of such a corporation.

3. The Regulation is amended by adding the following section immediately before the heading “EXEMPTIONS FOR TRADING IN MORTGAGES”:

Limited exemption, registered real estate brokerages etc.

11.1 (1) In this section,

“registered real estate broker or salesperson” means an individual who is registered under the Real Estate and Business Brokers Act, 2002 as a broker or salesperson, as the case may be;

“registered real estate brokerage” means a person or entity who is registered under the Real Estate and Business Brokers Act, 2002 as a brokerage;

“trade in real estate” has the same meaning as in the Real Estate and Business Brokers Act, 2002.

(2) If both of the following circumstances exist, a registered real estate brokerage is exempted under subsection 6 (7) of the Act from the requirement in section 2 of the Act to have a mortgage brokerage licence when arranging a vendor take-back mortgage, or attempting to do so, in the course of a trade in real estate:

1. The registered real estate brokerage does not hold itself out as otherwise dealing in mortgages.

2. The registered real estate brokerage does not engage in any other activity that requires a licence under the Act.

(3) If all of the following circumstances exist, a registered real estate broker or salesperson is exempted under subsection 6 (8) of the Act from the requirement in section 2 of the Act to have a mortgage broker’s or agent’s licence when arranging a vendor take-back mortgage, or attempting to do so, in the course of a trade in real estate:

1. The registered real estate brokerage for whom he or she is a real estate broker or salesperson is exempted by subsection (1) from the requirement to have a mortgage brokerage licence.

2. The registered real estate broker or salesperson does not hold himself or herself out as otherwise dealing in mortgages.

3. He or she does not engage in any other activity that requires a licence under the Act.

4. (1) Subject to subsection (2), this Regulation comes into force on July 1, 2008.

(2) Subsection 1 (2) comes into force on the later of July 1, 2008 and the day that section 12 of Schedule E to the Consumer Protection Statute Law Amendment Act, 2002 comes into force.