On November 17, 2017, the Ontario Government released its 2017 Ontario Economic and Fiscal Review (the Review). The Review contains advance notice of two important forthcoming changes for the securities industry in Ontario. First, it confirmed that the province is moving forward with regulatory changes regarding syndicated mortgages; and second, it also confirmed that the government is introducing legislation regarding the regulation of financial planners in Ontario.
Ontario is moving forward with regulatory changes that will strengthen protections for investors in syndicated mortgages. This includes expanding requirements to ensure that mortgage brokers provide investors with the information they need to effectively assess their level of risk when investing in these products.
The government is reviewing the feedback received over the last few months through consultations on potential changes to regulations under the Mortgage Brokerages, Lenders and Administrators Act, 2006 that would:
- Establish investment limits on these products to prevent retail investors from becoming overly concentrated in an investment that carries a high risk; and,
- Require mortgage brokerages to document their assessments of whether a product is suitable for their clients to ensure that only investors who can tolerate the high risks associated with these products are investing in them.
The Province also plans to propose amendments to the Securities Act to transfer the regulatory oversight of syndicated mortgage investments from the Financial Services Commission of Ontario (FISCO) to the Ontario Securities Commission (OSC).
Regulating Financial Planners
The Province also is planning to introduce legislation to regulate financial planners in Ontario. Under the proposed framework, financial planners would be required to meet specified proficiency requirements. The government will also take steps to reduce consumer confusion created by the wide variety of titles used in the industry, by restricting the use of titles related to financial planning. Moving forward, the government will consult extensively with stakeholders in shaping the proposed framework.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.