Repealed

1  Repealed. [B.C. Reg. 308/2000, s. 1.]

Prescribed forms

1.1  The following forms attached to this regulation are prescribed:

(a) Repealed. [B.C. Reg. 187/2006, s. 1.]

(b) Form 7 as the application for an order under section 6 (7.1) of the Act;

(c) Form 8 as the affidavit that accompanies Form 7;

(d) Form 9 as the written information statement required by section 17.1 of the Act;

(e) Form 10 as the written disclosure statement required by sections 17.3 and 17.4 of the Act.

[en. B.C. Reg. 194/2000, s. 1; am. B.C. Reg. 187/2006, s. 1.]

Registration expiry

2  Every registration under the Act expires on the day preceding the second annual anniversary date of the registration.

[en. B.C. Reg. 547/82.]

Registration renewal

3  An application for renewal of registration must be submitted to the registrar at least 30 days in advance of the last day of the term of the current registration.

[en. B.C. Reg. 547/82.]

Qualifications for registration under the Act

4  An applicant for registration or renewal of registration as a mortgage broker or submortgage broker must qualify for the registration or renewal of registration by

(a) taking the course or courses, and passing the examination or examinations, specified by the registrar, or

(b) satisfying the registrar that the applicant is suitable for registration as a mortgage broker or submortgage broker, as the case may be,

(i)  by challenging the examination or examinations specified by the registrar and proving his or her qualifications by passing the examination or examinations, as the case may be, or

(ii)  on the basis of the applicant having successfully completed training that is at least equivalent to having completed the course or courses referred to in paragraph (a).

[en. B.C. Reg. 127/2004.]

Fees respecting registration under the Act

5  (1)  In this section, "business address" means an address at or from which a mortgage broker or submortgage broker does any of the things referred to in the definition of "mortgage broker" in section 1 of the Act.

(2)  There must be paid to the government, for a matter itemized in Column 1 of the following Schedule of Fees, the fee set out opposite that item in Column 2 of that schedule.

[en. B.C. Reg. 127/2004.]

Statements and records

6  Every registered mortgage broker shall

(a) keep such books and records as are necessary for the proper recording of his business transactions and financial affairs,

(b) file with the registrar, at the time of application to be registered and thereafter annually and at other times that the registrar may require, financial reports

(i)  in a form satisfactory to the registrar,

(ii)  in a form certified by the mortgage broker, or by a director or partner of the mortgage broker, and

(iii)  if required by the registrar and if he or she considers it warranted in the particular circumstances, reported on by auditors engaged by the mortgage broker,

(c) file with the registrar the other information that the registrar may require in the form that the registrar may specify,

(d) keep and maintain a record showing

(i)  the repayment terms of each mortgage,

(ii)  the total amount actually paid or to be paid to the mortgagor of each mortgage, and

(iii)  the fees, expenses, costs and other charges required to be borne by the mortgagor in respect of each mortgage transaction, and

(e) keep and maintain up to date trust records in connection with his business to record

(i)  all trust money received by him,

(ii)  all disbursements of trust money made by him, and

(iii)  the unexpended balance of trust money held by him in total and separately for each person for whom that money is held.

[en. B.C. Reg. 255/84; am. B.C. Reg. 226/2004, s. (a).]

Hearings, investigations, inquiries

7  At any hearing, investigation, inquiry or examination to be conducted by the registrar hereunder, the provisions of section 148 of the Securities Act apply, subject to section 8 of this regulation with the necessary changes in so far as are applicable to the hearing, investigation, inquiry or examination.

[am. B.C. Reg. 193/2000.]

Reasons for refusal of registration

8  Every direction, decision, order or ruling of the registrar refusing registration, refusing to renew registration, suspending registration or cancelling registration shall be made in writing and shall be open to public inspection, and a copy of any such reasons shall be supplied by the registrar to any person who applies therefor, or who, in the opinion of the registrar, may be affected thereby.

Applications under section 6 (7.2) of the Act

8.1  (1)  An application for an order under section 6 (7.1) of the Act must be in Form 7 and must be accompanied by

(a) an affidavit in Form 8, and

(b) if the application is by a person approved under section 6 (2.1) of the Act, a copy of the order under section 6 (2.1) of the Act.

(2)  An affidavit under subsection (1) (a) must

(a) describe the inquiry for which the order is sought,

(b) state that the person swearing the affidavit has reasonable and probable grounds for believing that there may be records, property, assets or things that may reasonably relate to the subject matter of the inquiry located at or in the business premises, building, receptacle or place for which authority is sought to enter,

(c) state the grounds for the belief referred to in paragraph (b), and

(d) describe the records, property, assets or things referred to in paragraph (b).

[en. B.C. Reg. 194/2000, s. 1.]

Business Practices and Consumer Protection Act powers

8.2  (1)  For the purposes of section 9.1 of the Mortgage Brokers Act, the following provisions of the Business Practices and Consumer Protection Act are prescribed:

(a) sections 4 to 6 [deceptive acts or practices];

(b) sections 7 to 10 [unconscionable acts or practices];

(c) sections 59, 60, 62 and 64 [advertising];

(d) sections 66 and 67 [disclosure requirements applicable to all credit agreements];

(e) sections 71 to 73, 75 and 76 [rights and obligations of borrowers and credit grantors];

(f) sections 79 and 80 [credit arranged by loan brokers];

(g) sections 83 to 89 [disclosure required in relation to fixed credit];

(h) sections 91 to 93 [disclosure required in relation to open credit];

(i) section 104 and 105 [general].

(2)  Without limiting any other rights and powers of the registrar under the Mortgage Brokers Act, the registrar may, in relation to the provisions prescribed in subsection (1), exercise

(a) the rights and powers under sections 5 to 8.1 of the Mortgage Brokers Act, except section 6 (3), and

(b) the rights and powers of the director under the following provisions of Part 10 of the Business Practices and Consumer Protection Act:

(i)  sections 149 to 153 [inspections], except section 151 (2) and (3);

(ii)  sections 154, 155 (1), (3) and (4) and 157 (1) (a) and (b) [undertakings and compliance orders];

(iii)  sections 158 (2), 159 (1) and (2), 161 (1) and 163 (1) [appointment of receivers and property freezing orders];

(iv)  sections 164 (1) (a) to (c), (e) and (f), 166 (1) (a) to (c) and 168 (2) [administrative penalties];

(v)  sections 172 and 173 (2) [court proceedings].

(3)  The following provisions of the Mortgage Brokers Act apply to the exercise by the registrar of the rights or powers referred to in subsection (2):

(a) section 9 [appeal to tribunal];

(b) section 10 [certificate of registrar];

(c) section 20 [liability of registrar, commission].

(4)  The following provisions of Part 10 of the Business Practices and Consumer Protection Act apply to the exercise by the registrar of the rights or powers referred to in subsection (2):

(a) section 151 (2) and (3) [inspections];

(b) sections 155 (2), (5) and (6) and 157 (2) [undertakings and orders];

(c) sections 158 (5), 159 (3) to (6), 160, 161 (2) and (3), 162 and 163 (2) to (4) [appointment of receivers and property freezing orders];

(d) sections 164 (2) to (5), 165, 167 (a), 168 (1) and 170 [administrative penalties];

(e) section 173 (1) and (3) [court proceedings].

[en. B.C. Reg. 187/2006, s. 2.]

Repealed

9 to 12  Repealed. [B.C. Reg. 187/2006, s. 3.]

Definitions

13  (1)  For the purposes of this Division, and sections 17.3 and 17.4 of the Act:

"associate" means, if used to indicate a relationship with any person,

(a) a submortgage broker employed by that person,

(b) a partner of that person,

(c) a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity,

(d) a corporation in respect of which that person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the corporation,

(e) a relative, including a spouse, of that person, or

(f) a relative of that person's spouse, if the relative has the same home as that person;

"related party" means, in respect of a person, any other person that is

(a) related to the person under subsection (2) to (4), or

(b) deemed to be a related party under subsection (5).

(2)  Each of 2 persons is related to the other if

(a) either influences the other,

(b) both influence the same third person, or

(c) both are influenced by the same third person.

(3)  For the purposes of subsection (2), a person influences another person if, through the beneficial ownership of or exercise of control or direction over, or through a combination of such ownership of or control or direction over

(a) voting securities of that other person,

(b) securities currently convertible or exchangeable into voting securities of that other person, or

(c) securities carrying a currently exercisable right to acquire voting securities of that other person or to acquire convertible or exchangeable securities referred to in paragraph (b),

whether directly or indirectly and whether alone or in combination with one or more persons, the person exercises a controlling influence over the management and policies of that other person.

(4)  For the purposes of subsection (2) and without limiting the generality of subsection (3), a person, in the absence of evidence to the contrary, is deemed to influence another person if the first person

(a) beneficially owns or exercises control or direction over securities that constitute in the aggregate more than 20% of the outstanding securities of any class or series of voting securities of that other person, or

(b) would, upon conversion, exchange or exercise of any security or right referred to in subsection (3) (b) or (c), beneficially own or exercise control or direction over securities that would constitute in the aggregate more than 20% of the outstanding securities of any class or series of voting securities of that other person,

whether directly or indirectly and whether alone or in combination with one or more other person.

(5)  If any 2 persons are related parties of the same other person, the 2 persons are deemed to be related parties of each other.

[en. B.C. Reg. 194/2000, s. 3.]

Timing of Conflict of Interest Disclosure Statement

14  (1)  The written disclosure statement referred to in section 17.3 of the Act must be provided to the borrower at the earliest opportune time given the circumstances of the mortgage transaction and in any event before the borrower in the mortgage transaction signs the mortgage or any ancillary agreement with the mortgage broker or lender, including but not limited to an agency agreement with the mortgage broker, that commits the borrower to the mortgage transaction.

(2)  The written disclosure statement referred to in section 17.4 of the Act must be provided to the lender

(a) if the lender's funds are paid into trust, on or before release of the funds from trust at the direction of the lender, or

(b) if the funds are not paid into trust, on or before the advancement of funds by the lender.

[en. B.C. Reg. 194/2000, s. 3.]

Exemption from section 14.1 of the Act

15  (1)  In this Division:

"sophisticated person" means

(a) a government of Canada or any province of Canada or a crown corporation or agency of a Canadian federal or provincial government,

(b) a municipal corporation, public board or commission in Canada,

(c) a savings institution,

(d) a cooperative credit society as defined in the Cooperative Credit Associations Act (Canada) or a savings and credit union, federation or confederation as defined in the Savings and Credit Unions Act (Quebec),

(e) the Business Development Bank of Canada,

(f) a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a provincial pension supervisory authority,

(g) an insurance company,

(h) a trust company or insurer authorized under the laws of Canada or of a province of Canada other than British Columbia to carry on business in Canada or that province,

(i) a mortgage broker acting as principal,

(j) a subsidiary, as defined by the Business Corporations Act, of a person referred to in paragraph (a) to (i),

(k) a person registered under the Securities Act or the securities legislation of another province in Canada as an investment dealer or equivalent, acting as principal or as an agent or trustee for accounts that are fully managed by it,

(l) a person registered under the Securities Act or the securities legislation of another province in Canada as a portfolio manager or equivalent, acting as principal or as an agent or trustee for accounts that are fully managed by it,

(m) a mutual fund or non-redeemable investment fund, if the investment portfolio of the fund is managed by a person that is registered under the Securities Act or the securities legislation of another province in Canada as a portfolio manager or equivalent, or

(n) a person or trust that acquires mortgages or interests in mortgages for the purpose of offering, as a security as defined in the Securities Act, interests in a pool of those mortgages or interests in mortgages.

(2)  A mortgage broker is exempt from section 14.1 of the Act if the mortgage broker is administering, or arranging for a person to administer, a mortgage on behalf of a sophisticated person.

[en. B.C. Reg. 194/2000, s. 3; am. B.C. Reg. 226/2004, s. (b).]

Exemption from section 17.1 of the Act

16  (1)  A mortgage broker is exempt from section 17.1 of the Act in respect of a mortgage transaction described in section 17.1 (1) (a) of the Act or a sale transaction described in section 17.1 (1) (b) or (c) of the Act in which the other person referred to in section 17.1 of the Act is a sophisticated person.

(2)  A mortgage broker is exempt from section 17.1 of the Act in respect of a mortgage transaction described in section 17.1 (1) (a) of the Act or a sale transaction described in section 17.1 (1) (b) or (c) of the Act in which the mortgage is

(a) part of a pool of mortgages and an interest in the pool is being offered by the mortgage broker as a security as defined in the Securities Act, and

(b) fully guaranteed by the government of Canada or by a province of Canada.

(3)  A mortgage broker is exempt from section 17.1 of the Act in respect of a mortgage transaction described in section 17.1 (1) (a) of the Act or a sale transaction described in section 17.1 (b) or (c) of the Act if an offering memorandum or a prospectus has been provided to the other person referred to in section 17.1 of the Act in accordance with the Securities Act.

[en. B.C. Reg. 194/2000, s. 3.]

Exemption from sections 17.3 or 17.4 of the Act

17  (1)  A financial institution, as defined in theFinancial Institutions Act, acting in a mortgage transaction is exempt from section 17.3 and section 17.4 of the Act if the financial institution is, in respect of that mortgage transaction, in compliance with section 90 of the Financial Institutions Act and B.C. Reg. 333/90, the Marketing of Financial Products Regulation, under the Financial Institutions Act.

(2)  A mortgage broker is exempt from section 17.3 of the Act if the matters required to be disclosed under that section have been disclosed in an offering memorandum or a prospectus prepared in accordance with the Securities Act and the offering memorandum or prospectus has been provided to every person who is a borrower in the transaction to which section 17.3 of the Act would otherwise apply.

(3)  A mortgage broker is exempt from section 17.4 of the Act if the matters required to be disclosed under that section have been disclosed in an offering memorandum or a prospectus prepared in accordance with the Securities Act and the offering memorandum or prospectus has been provided to every person who is a lender in the transaction to which section 17.4 of the Act would otherwise apply.

(4)  A mortgage broker is exempt from sections 17.3 and 17.4 of the Act if

(a) the only reason that section 17.3 or section 17.4 of the Act, as the case may be, would otherwise apply is that the "direct or indirect interest" required to be disclosed is an additional amount as defined in section 15 of the Act, and

(b) the additional amount has otherwise been disclosed to the borrower in the case of section 17.3 of the Act or the lender in the case of section 17.4 of the Act.

(5)  For the purpose of section 17.4 (2) (a) of the Act, the term "direct or indirect interest" does not include an interest in a mortgage that is registered in the name of the mortgage broker or will be registered in the name of the mortgage broker as a result of the transaction.

[en. B.C. Reg. 194/2000, s. 3.]

Exemption for certain Securities Act registrants

18  (1)  In this section:

"limited dealer" has the meaning given to it in section 6 of B.C. Reg. 194/99, the Securities Rules;

"qualified syndicated mortgage" means a syndicated mortgage if

(a) the syndicated mortgage is

(i)  not contained in or secured by a bond, debenture or similar obligation or in a trust deed or other instrument to secure bonds or debentures or similar obligations, and

(ii)  sold through a mortgage broker,

(b) the syndicated mortgage secured a debt obligation on property used solely for residential purposes and containing no more than 4 residential dwelling units,

(c) the syndicated mortgage does not secure a debt obligation incurred for the construction or development of property,

(d) at the time of issue, the amount of the debt secured by the syndicated mortgage, together with all other debt secured by mortgages on the property that have priority over, or the same priority as, the syndicated mortgage, does not exceed 90 percent of the fair market value of the property, excluding any value that may be attributed to proposed or pending development on the property,

(e) the syndicated mortgage is limited to one identified debt obligation,

(f) the rate of interest payable under the syndicate mortgage is equal to the rate of interest payable under the identified debt obligation,

(g) any amount charged for the administration of the syndicated mortgage is disclosed to the purchaser, and

(h) the term of the syndicated mortgage is not different from the term of the identified debt obligation;

"syndicated mortgage" means a security that provides an investment arrangement in which a person participates, together with others, as a mortgagee through the acquisition of a portion of an identified debt obligation that is secured by a mortgage.

(2)  A person that is registered under the Securities Act other than a limited dealer is exempt from the Act for the purpose of offering for sale securities of syndicated mortgages other than qualified syndicated mortgages provided that person is in compliance with the Securities Act.

[en. B.C. Reg. 194/2000, s. 3.]

Exemption for persons licensed under the Real Estate Services Act

19  A person licensed under the Real Estate Services Act is exempt from the registration provisions of the Mortgage Brokers Act if the person would otherwise be required to be registered only as a result of the person’s activity in facilitating the sale of a vendor take-back mortgage if that activity is ancillary to the person’s role in the transaction that gave rise to the vendor take-back mortgage.

[en. B.C. Reg. 518/2004, Sch. s. 11.]

Prescribed forms

20  The following forms attached to this regulation are prescribed:

(a) Form 1 as the form that must be completed and executed by an applicant for registration as a mortgage broker;

(b) Form 2 as the form that must be completed and executed by an applicant for registration as a submortgage broker;

(c) Form 3 as the form that must be completed and executed by an applicant for renewal of registration as a mortgage broker;

(d) Form 4 as the form that must be completed and executed by an applicant for renewal of registration as a submortgage broker;

(e) Form 5 as the form that must be completed and executed by an applicant for reinstatement of registration under section 3 (8) of the Act.

[en. B.C. Reg. 308/2000, s. 2.]