OSC Reminds Mortgage Investment Entities of Registration Requirements

TORONTO – The Ontario Securities Commission (OSC) recently entered into settlement agreements with mortgage investment entities (MIEs), mortgage brokers, administrators and their principals involved in trading in securities without registration, contrary to the Securities Act (Ontario). These settlements involved substantial penalties and costs being levied against businesses and individuals, as well as the requirement to reimburse investors where the investment was not suitable.

“If your business involves trading in securities such as units or common shares of a mortgage investment entity, you may require registration with the OSC in addition to registration with the Financial Services Commission of Ontario (FSCO). We encourage these entities to review the registration requirements and obtain legal advice if necessary,” said Debra Foubert, Director of Compliance and Registrant Regulation at the OSC.

Registration requirements under Ontario securities law are set out in the Securities Act and National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103). Guidance on how these requirements apply to MIEs and entities that invest their assets in mortgages can be found in the following Notices: 

• CSA Staff Notice 31-323 Guidance Relating to the Registration Obligations of Mortgage Investment Entities; and, 
• OSC Staff Notice 81-722 Mortgage Investment Entities and Investment Funds.

Businesses with questions about securities law requirements that may apply to MIEs in Ontario are encouraged to contact the OSC’s Contact Centre at 416-593-8314 or 1-877-785-1555 (Toll Free).

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in the capital markets. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at www.osc.ca
 

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