On October 10, 2023, the Financial Services Regulatory Authority of Ontario (FSRA) launched a public consultation on its proposed 2024-2025 Statement of Priorities (SoP) and budget. The objective of the consultation is to obtain feedback from stakeholders, including consumers, credit union members, pension plan beneficiaries, investors and others and is a part of FSRA's ongoing commitment to transparency and accountability.

FSRA has noted that the proposed SoP was shaped by certain environmental factors facing Ontarians today, including various economic, technological, and other emerging issues. Such issues include inflationary pressures, the impact of increased interest rates, the use of automation and artificial intelligence and its associated risks for consumers, environmental, social and governance investing by regulated entities, the need for regulated entities to better serve vulnerable persons, and the increase in alternative and private lending, including private mortgage transactions.

FSRA lists among its proposed priorities for fiscal year 2024-2025:

  • Advancing the consumer interest across various sectors regulated by FSRA;
  • Enabling innovation;
  • Modernizing systems and processes;
  • Protecting consumers who invest in segregated fund contracts;
  • Promoting strong conduct culture in mortgage brokering;
  • Enhancing professional competence of licensed individuals in mortgage brokering; and
  • Ensuring the effectiveness of the title protection framework for financial planners/financial advisors.

Highlights of the proposed priorities for mortgage brokers and administrators include enhancing protection of vulnerable consumers. FSRA also intends to develop rules and guidance to support the effectiveness of principal brokers (the chief compliance officer of the mortgage brokerage), commence supervision of mortgage brokers and administrators against regulatory expectations outlined in the mortgage suitability guidance and mortgage administrator financial filing guidance, and implement a risk-based conduct intervention approach to address deficient firms. FSRA will publish its final guidance on how it evaluates the suitability of a mortgage broker to hold a license and how brokers should conduct suitability assessments, and will implement an enhanced competency and continuing education framework for brokers and agents. The later is seen as critical to mitigate the risks associated with an environment of increased interest rates and inflation leading to consumers increasingly using private lenders for mortgages.

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