Guideline on General Compliance Requirements for In-Flight Files during the Transition from MBA to MSA

Understanding Requirements for In-Flight Files

The provision of mortgage services in B.C. is governed by the Mortgage Services Act (“MSA”), Mortgage Services Regulation (“Regulation”), and Mortgage Services Rules (“Rules”). The information below explains key reporting and compliance requirements for in-flight files, during the transition from the Mortgage Brokers Act (MBA) to the MSA, which comes into force on October 13, 2026.

In-flight files refer to mortgage transactions or client engagements that are initiated under the MBA but remain active, unresolved, or incomplete as of the MSA coming into force on October 13, 2026. These may include, but are not limited to:

• Mortgage applications submitted prior to October 13, 2026, that have not yet reached final approval or funding;
• Ongoing client engagements initiated under the MBA; and
• Transactions where contractual obligations, disclosures, or regulatory requirements under the MBA are still being fulfilled or processed.

General Compliance Requirements

All in-flight files must comply with the legislative and regulatory requirements in effect at the time the activity occurred.

As of October 13, 2026, any ongoing or subsequent activity related to in-flight files that began under the MBA must comply with the MSA and its associated Regulation and Rules. It is important to understand the new MSA requirements to ensure a smooth transition and avoid any regulatory actions for non-compliance. Further details on all duties and obligations under the MSA can be found on BCFSA’s Mortgage Services Knowledge Base.

Disclosures and Duties to Clients and Borrowers under the MSA

While the MSA represents broader legislative reform, two areas of significant change are disclosure requirements and duties to clients. As of October 13, 2026, licensees must be mindful of these new requirements when managing in-flight files.

Disclosures

Licensees providing mortgage services have specific disclosure requirements that are set out in the MSA, Regulation, and Rules. Particularly, licensees have disclosure obligations regarding, but not limited to, conflicts of interest, lender disclosures, remuneration, and representation. Depending on the type of mortgage transaction and the stage in the process of that transaction which a licensee is managing upon transition, licensees may have disclosure requirements under the MSA that apply to in-flight files.

Two key disclosures required under the MSA – disclosure of representation and disclosure of risks to unrepresented parties – are important to note for in-flight files. Where a registrant under the MBA has already established a client relationship that would be considered a client representation (agency) relationship¹ under the MSA, and the mortgage transaction continues after the transition to the MSA, the registrant is not required to retroactively complete the MSA disclosure of representation or the disclosure of risks to unrepresented parties. These disclosures were not required under the MBA.

Some MSA disclosures may still be required, depending on the type of transaction that is in-flight and the stage in the transaction process. For instance,

• If a representation relationship was not established prior to the MSA coming into force, then a disclosure of representation will be required upon transition to the MSA.; or
• If a registrant began an ongoing professional relationship with a client under the MBA, beyond a single mortgage transaction, and that relationship continues after the MSA comes into force, that registrant (now, a licensee under the MSA) should provide a disclosure of representation before the next mortgage transaction.

More information on required disclosures under the MSA and an agency relationship with a client can be found on BCFSA’s Mortgage Services Knowledge Base.

¹ Agency relationships are commonly created by express agreement, where the agent and the principal explicitly agree to the agency relationship orally or in writing. Ideally, an agency relationship is created by a written contract or disclosure where the authority of the agent is clearly laid out.

Disclosure Examples

Example 1: Client Representation Relationship Established after MSA

Riya is a submortgage broker registered under the MBA. On September 30, 2026, she spoke with George by phone and provided general information about mortgage rates and her services. This was an informational discussion only, and no client relationship was established. On October 27, 2026, after the MSA came into force, George asked Riya to begin arranging a mortgage for him, and they agreed to enter into a client relationship.

Because the client relationship was established after the MSA came into force, Riya must provide George with all required disclosures under the MSA, including disclosure of representation and disclosure of remuneration. Additional disclosures may apply depending on the transaction.

Example 2: MBA Disclosures Provided Prior to the MSA

Jameson is a Designated Individual registered under the MBA. In August 2026, he agreed to act for Elara to arrange a mortgage and provided her with the required Form 10 disclosure under the MBA. The transaction remained in progress when the MSA came into force and was completed in November 2026.

Because the client relationship and required disclosures were already in place under the MBA, and there is no new information requiring additional disclosure (for example, changes to conflicts of interest or remuneration), Jameson does not need to provide Elara with disclosures that are newly required under the MSA for that same transaction.

Example 3: New Mortgage Transaction after the MSA

Gurneet is a submortgage broker registered under the MBA. She previously assisted Susan with obtaining a mortgage five years earlier. Susan’s mortgage is up for renewal in December 2026. In late October 2026, after the MSA came into force, Susan agreed that Gurneet would assist her with arranging a new mortgage. As this is a new mortgage transaction occurring after the MSA came into force, Gurneet must provide Susan with all applicable disclosures required under the MSA, including disclosure of representation.

Duties

The MSA and Rules establish overarching duties that apply to all licensees whenever they provide mortgage services. Licensees must:

• Act in good faith, including acting fairly and honestly;
• Act with reasonable care and skill;
• Avoid wrongful taking; and
• Avoid deceptive dealing.

In addition to these general duties, the MSA, Regulation, and Rules also set out additional obligations, including duties owed to clients, duties respecting borrowers and lenders, specific duties for specific licence levels, and duties under the Business Practices and Consumer Protection Act.

More specifically, the Rules set out key client-focused duties which would be applicable for in-flight files where an MBA registrant-turned-MSA licensee is providing mortgage services to a client. These duties are comparable to the fiduciary obligations owed to clients under common law and are fundamental to the agency relationship between mortgage brokers and their clients. Key client-focused duties include:

• Acting in the client’s best interests;
• Following the client’s lawful instructions;
• Working within the authority given by the client;
• Advising the client to seek independent professional advice on matters outside the licensee’s expertise;
• Keeping the client’s information confidential;
• Conducting due diligence and disclosing all known material information about the mortgage services and the mortgage or mortgage transaction;
• Taking reasonable steps to avoid any conflict of interest; and,
• If a conflict does exist, promptly and fully disclosing it to the client.

Further details on agency and all duties under the MSA can be found on BCFSA’s Mortgage Services Knowledge Base.

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

MSA

s. 63(7) [Rules of the Authority]

MSA Rules

s. 32 [Mortgage broker responsibilities]

s. 33 [Duty to act with reasonable care and skill]

s. 38 [Duties to clients]