Ontario Finance Minister Dwight Duncan has introduced legislation to replace the current Mortgage Brokers Act. The new legislation aims to improve consumer protection, enhance and modernize financial regulation and encourage greater competition and choice for consumers.

It would require individuals and businesses that deal in mortgages to be licensed by the Financial Services Commission of Ontario. In addition, brokerages would be required to have a “principal broker,” who would oversee conduct and act as the chief compliance officer for the organization.

Other provisions in the legislation would modernize FSCO’s enforcement powers, remove restrictions for foreign ownership and establish a separate license for those who administer mortgages, which involves handling investor funds.

“We need updated rules and modernized practices for our increasingly sophisticated financial services marketplace,” Duncan added. “With the role of mortgage brokers expanding, now is the right time to modernize Ontario’s regulatory framework to encourage competition and provide more choice for homebuyers.

“The new Mortgage Brokerages, Lenders and Administrators Act is an important part of our government’s plan to improve Ontario’s economic advantage. Not only will this act benefit consumers, but it will support a new generation of economic growth through modernized financial services regulation.”