The Financial Services Regulatory Authority of Ontario (FSRA) and the Ontario Securities Commission (OSC) issued a joint statement this week to announce that the transfer of regulatory oversight of certain syndicated mortgage investments will be postponed until at least July 2020.
The OSC was originally to assume responsibility for overseeing syndicated mortgage investments at the beginning of 2020.
The oversight transfer was initially announced in the Ontario provincial budget, tabled in April 2017. The budget documents at the time said the decision was consistent with the manner in which the products were being regulated in other provinces. “Going forward, the government will work with regulators to plan an orderly transfer of the oversight of these products,” the budget documents state. The government passed amendments to the Securities Act to facilitate the eventual transfer of the oversight responsibility for syndicated mortgage investments in the fall of 2017.
The budget also called for rules that would require mortgage brokerages to conduct client suitability assessments and ensure that investors were aware of the potential risks associated with these types of investments. A subsequent amendment of the Mortgage Brokerages, Lenders and Administrators Act, 2006, effective July 2018, also established a $60,000 investment limit for individual investors.
The regulators say additional details regarding the transfer of oversight responsibilities will be provided in the New Year.
