The Financial Services Commission of Ontario has issued a consultation draft that contemplates reform of the regulation of the mortgage brokerage industry.

The consultation draft proposes a mortgage brokerage structure with a principal broker who would oversee brokers and agents. A brokerage licence would be required for an entity that carries on the business of dealing in mortgages, trading in mortgages or acting as a mortgage lender in Ontario. FSCO also proposes a separate licensing requirement for mortgage administrators.

Other proposals include no longer deeming real estate brokers to be registered as mortgage brokers, requiring mortgage agents to meet proficiency requirements and be licensed and eliminating the education requirement exemption for lawyers and accountants. The draft regulation includes provisions to allow people currently in these positions to transition to the new licensing regime without meeting any additional education requirements.

Comments on the draft are due by April 29. This draft follows a consultation paper released by the government last June. The government says its goal is to “enhance consumer protection and create a climate where the industry can grow under responsive, fair and modern regulation”.