Information on communicating with BCFSA

Introduction

Licensees providing mortgage services have specific duties that are set out in the Mortgage Services Act (MSA), Mortgage Services Regulation (Regulation), and Mortgage Services Rules (Rules). Under the MSA, mortgage services licensees have requirements for when and how they must communicate with the Superintendent of Mortgage Services (Superintendent), as represented by BCFSA staff.

Promptly reply to BCFSA

Licensees are required to respond promptly (or in two business days) to any inquiry from BCFSA. The response must be provided in writing, unless BCFSA permits another method. Additionally, if a specific deadline is set by BCFSA, the licensee must ensure that the response is submitted no later than that date.

Delivery of notices

Mailing address for delivery

The mailing address for delivery to a licensee is generally the address of their related mortgage brokerage office. If a licensee provides BCFSA with a different mailing address for delivery, they must promptly notify BCFSA in writing of any changes to that address. This ensures that important communications are delivered accurately and on time.

Email address for delivery

The email address for delivery to a licensee will be the one provided by the licensee in their most recent licence application. If a licensee wishes to designate a different email address for delivery, they must notify BCFSA of this change. Additionally, licensees are required to promptly inform the BCFSA in writing of any updates or changes to their email address for delivery to ensure seamless communication.

Effective delivery to licensees

Notices to be sent to BCFSA

Notice of insolvency

A mortgage brokerage must immediately notify BCFSA in writing if it is not able to pay its debts as they become due.

Notice of discipline, bankruptcy or criminal proceedings

There are multiple instances when a licensee must notify BCFSA of certain proceedings affecting them or the leadership within the brokerage. Below are key circumstances requiring the licensee to notify BCFSA.

A licensee must promptly notify BCFSA in writing if any of the following circumstances occur:

• The licensee or a controlling person¹ of the licensee is subject to any regulatory investigation as a result of which, or any regulatory proceedings in which, the licensee or the controlling person may be or has been made subject to a disciplinary or regulatory sanction²  
• under legislation in B.C. or another jurisdiction within or outside Canada regulating mortgages, real estate, insurance, financial services, money services, or securities activities, or mortgage brokers, accountants, notaries, or lawyers; or 
• by a professional body in B.C. or another jurisdiction within or outside Canada that governs any of those activities or professions. 
• A complaint against the licensee or a controlling person of the licensee is accepted for filing under the Human Rights Code or similar legislation in another jurisdiction within or outside Canada, or a decision or order is made in respect of such a complaint. 
• Any court proceeding is commenced against the licensee or a controlling person of the licensee, or any court order or judgment is made against the licensee or controlling person, in relation to mortgage services; real estate services; a dealing in real estate, insurance, financial services, money services, securities or derivatives; or misappropriation, fraud or breach of trust. 
• Any court proceeding is commenced against a significant interest holder³ of the licensee, or any court order or judgment is made against a significant interest holder, in relation to misappropriation, fraud or breach of trust. 
• Any business that the licensee or a controlling person of the licensee owns, or of which the licensee or controlling person has been a controlling person at any time during the past 2 years, has any court order or judgment made against the business in relation to mortgage services; real estate services; a dealing in real estate, insurance, financial services, money services, securities or derivatives; or misappropriation, fraud or breach of trust. 
• Any business that a significant interest holder of the licensee owns, or of which a significant interest holder has been a controlling person at any time during the past 2 years, has any court order or judgment made against the business in relation to misappropriation, fraud or breach of trust. 
• A proceeding is commenced under section 3 of the Civil Forfeiture Act in which the licensee knows, or reasonably ought to know, that any of the following are named as a party or have filed a response to the proceeding:  
• the licensee 
• a controlling person of the licensee 
• a significant interest holder of the licensee; 
• a person⁴ of which the licensee has been a controlling person or significant interest holder at any time during the past two (2) years 
• The licensee knows, or reasonably ought to know, that an application has been made under section 22 of the Civil Forfeiture Act for an unexplained wealth order in respect of a respondent or responsible officer that is any of the persons listed in the preceding bullet. 
• The licensee knows, or reasonably ought to know, that any of the persons listed above have been given notice of forfeiture under section 32(1)(b) of the Civil Forfeiture Act. 
• The licensee knows, or reasonably ought to know, that any of the persons listed above have delivered a notice of dispute under section 35 of the Civil Forfeiture Act. 
• The licensee, a controlling person of the licensee, or a significant interest holder of the licensee is charged with or convicted of an offence under a federal enactment, an enactment of B.C. or another province, or a law of any foreign jurisdiction, other than highway traffic offences resulting only in monetary fines or point penalties, or contraventions proceeded with by violation ticket under the Offence Act or ticket under the Contraventions Act (Canada). 
• The licensee or a controlling person of the licensee is the subject of any bankruptcy, insolvency or receivership proceedings, including an application for a bankruptcy order; an assignment in bankruptcy; a bankruptcy order; a proposal or consumer proposal under the Bankruptcy and Insolvency Act (Canada); or an insolvency proceeding, including a receivership or an arrangement under the Companies’ Creditors Arrangement Act (Canada). 
• Any business that the licensee or a controlling person of the licensee owns, or of which the licensee or controlling person has been a controlling person at any time during the past two (2) years, is the subject of any bankruptcy, insolvency or receivership proceedings, including an application for a bankruptcy order; an assignment in bankruptcy; a bankruptcy order; a proposal or consumer proposal under the Bankruptcy and Insolvency Act (Canada); or an insolvency proceeding, including a receivership or an arrangement under the Companies’ Creditors Arrangement Act (Canada).

In addition to a licensee promptly notifying BCFSA in writing about any of the above scenarios, the licensee must provide particulars and any additional information or records as requested by BCFSA. If notice is also required to be provided by a mortgage broker, they must give a copy of this notice to the principal broker of their related mortgage brokerage.

^{1 Under the Rules, a controlling person means any of the following persons:}

^{(a) in the case of a corporation, a director or officer of the corporation;}

^{(b) in the case of a partnership, other than a limited partnership,}

^{(i) a partner of the partnership, and}

^{(ii) the partner is a corporation, a director or officer of the corporation;}

^{(c) in the case of a limited partnership,}

^{(i) general partner of the limited partnership, and}

^{(ii) if the general partner is a corporation, a director or officer of the corporation; or}

^{(d) in the case of a person who is not an individual, partnership or corporation, another person who directly or indirectly controls the person.}

^{2 Under the Rules, “disciplinary or regulatory sanction” means a fine, administrative penalty, warning, reprimand, educational requirement, imposed restriction or condition, suspension or cancellation.}

^{3 Under the Rules, a significant interest holder means any of the following persons:}

^{(a) in the case of a corporation with issued shares,}

^{(i) a person who is the registered or beneficial owner of, or who directly or indirectly controls, 10% or more of the issued shares of the corporation, or}

^{(ii) a person who is the registered or beneficial owner of, or who directly or indirectly controls, issued shares of the corporation that carry 10% or more of the rights to vote at general meetings;}

^{(b) in the case of a partnership, other than a limited partnership, a partner of the partnership; or}

^{(c) in the case of any other person,}

^{(i) a person who is entitled, directly or indirectly, to 10% or more of the profits of the other person,}

^{(ii) a person who is entitled, directly or indirectly, to 10% or more of the assets of the other person on winding up or dissolution of the other person, or}

^{(iii) a person who holds, owns or controls, directly or indirectly, 10% or more of the voting rights in respect of the other person.}

^{4 Under the MSA, “person” is defined to include:}

• ^{an individual,} 
• ^{a corporation,} 
• ^{a partnership, trust or fund,} 
• ^{an association, syndicate, organization or other organized group of persons, and} 
• ^{an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative.} 

Notice of business changes

A mortgage brokerage must promptly notify BCFSA in writing if any of the following business changes occur:

• A change in the telephone number, fax number or email address of the head office or a branch office of the mortgage brokerage 
• A change in the legal name or licensee name of the mortgage brokerage or of any related principal broker or mortgage broker 
• Any related principal broker or mortgage broker who ceases working with the mortgage brokerage, along with the reasons why they are no longer working with the brokerage 
• If the mortgage brokerage is a partnership, any change in the nature of the partnership, such as registration as a limited liability partnership 
• If the mortgage brokerage is a corporation, any fundamental change to the corporation, such as an amalgamation or continuation  
• Any proposed change in the controlling persons of the mortgage brokerage⁵ 
• Any change in the significant interest holders of the mortgage brokerage 
• A change in the end date of the mortgage brokerage’s fiscal year 
• A change in the savings institutions, or branch location of a savings institution, at which the mortgage brokerage maintains accounts; or 
• A change in the accounts maintained by the mortgage brokerage at a savings institution or a change in the account numbers of those accounts. 

^{5 If a mortgage brokerage that is a corporation has a change in its controlling persons, it must notify the Superintendent as soon as possible before the change happens and provide the required information and statements for each new proposed controlling person.}

Business changes to a personal mortgage corporation

A corporation licensed as a personal mortgage corporation (PMC) must promptly notify BCFSA in writing if it no longer meets the corporate qualifications to operate as such. These requirements include:

• Being structured as either a company or an extraprovincial company, within the meaning of the Business Corporations Act, with the capacity to provide mortgage services.  
• The voting shares of the corporation must be wholly owned by a single individual who is the controlling individual, the sole director, and the sole officer (president) of the corporation.  
• Any non-voting shares, if applicable, must be owned by either the controlling individual or an affiliated person of the controlling individual.  
• The corporation’s legal name must meet the required naming conventions (i.e., include, but nothing more than, the name of the corporation approved by BCFSA and the full term “personal mortgage corporation”). 

More information on the corporate requirements for PMCs can be found on BCFSA’ Mortgage Services Knowledge Base.

Applicable Section of Mortgage Services Act, its Regulations, or the Mortgage Services Rules

MSA Rules

s. 21 [Mailing address for delivery]

s. 22 [Email address for delivery]

s. 23 [Effective delivery to licensees]

s. 24 [Licensee must reply promptly to superintendent]

s. 25 [Mortgage brokerage must give immediate notice respecting insolvency]

s. 26 [Licensee must give notice of discipline, bankruptcy, criminal or other proceedings]

s. 27 [Mortgage brokerage must give notice of business changes]

s. 28 [Personal mortgage corporation must give notice of business changes]