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Third Session, Thirty-Ninth Legislature

This version is based on the printed bill that was distributed in the Legislature after First Reading.   It is not the official version.   If accuracy is critical, you can obtain a copy of the printed bill from Statutory Publications or view the online bilingual version (PDF).

Bill 19

THE MORTGAGE DEALERS AMENDMENT AND SECURITIES AMENDMENT ACT


Explanatory Note

(Assented to                                         )

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

C.C.S.M. c. M210 amended

1           The Mortgage Dealers Act is amended by this Part.

2           The title of the English version is replaced with "THE MORTGAGE BROKERS ACT".

3(1)        In section 1 of the English version, the definitions "applicant", "authorized official" and "salesperson" are amended by striking out "mortgage dealer" wherever it occurs and substituting "mortgage broker".

3(2)         The definition "mortgage dealer" in section 1 is amended

(a) in the part before clause (a) of the English version, by striking out "mortgage dealer" and substituting "mortgage broker";

(b) by adding the following after clause (b):

(b.1) solicits another person to lend or borrow money on the security of a mortgage,

(b.2) provides information about a prospective borrower to a person who lends, or may lend, money on the security of a mortgage,

(b.3) assesses a prospective borrower on behalf of a person who lends, or may lend, money on the security of a mortgage,

(c) in clause (e) of the English version, by striking out "mortgage dealer's" and substituting "mortgage broker's";

(d) by replacing clause (f) with the following:

(f) administers a mortgage for or on behalf of another person,

(e) by adding "or" at the end of clause (g) and adding the following after clause (g):

(h) engages in any other prescribed activity in respect of a mortgage;

3(3)         Section 1 is amended by adding the following definition:

"remuneration" includes any commission, fee, gain or reward that is paid or received, or is to be paid or received, directly or indirectly; (« rémunération »)

4(1)        Subsection 2(1) is replaced with the following:

Requirement to be registered

2(1)        No person shall act as a mortgage broker, authorized official or mortgage salesperson, for or in expectation of remuneration, unless the person

(a) is registered as a mortgage broker, authorized official or mortgage salesperson, as the case may be; or

(b) is exempted from the requirement to be registered, under section 3, the regulations or an order of the commission made under section 55.

4(2)        Subsection 2(2) of the English version is amended by striking out "mortgage dealer" and substituting "mortgage broker".

5(1)        Subsection 3(1) is amended

(a) by repealing subclause (f)(i);

(b) in the English version of subclause (f)(ii) and the part of clause (f) after subclause (ii), by striking out "mortgage dealer" and substituting "mortgage broker"; and

(c) by adding the following after clause (f):

(f.1) a person or company registered under The Securities Act, if the activity that would otherwise require registration under this Act is permitted under the terms of the person's or company's registration under The Securities Act;

(f.2) a person who refers a prospective borrower to a prospective lender, or a prospective lender to a prospective borrower, if the person making the referral complies with the prescribed requirements respecting the referral; or

5(2)        Subsection 3(2) is repealed.

5(3)        Subsection 3(3) of the English version is amended by striking out "mortgage dealer" wherever it occurs and substituting "mortgage broker".

5(4)        Subsections 3(5) to (7) of the French version are replaced with the following:

Révocation d'exemption

3(5)        Par dérogation aux paragraphes (1), (2) et (3), la Commission peut, si elle estime que cela est dans l'intérêt public, rendre une ordonnance soustrayant la personne qui y est nommée à l'application de ces paragraphes.

Audience

3(6)        La Commission tient une audience avant de rendre une ordonnance en application du paragraphe (5).  Toutefois, si elle estime que la tenue d'une audience causerait un retard préjudiciable à l'intérêt public, elle peut rendre une ordonnance dont l'effet dure au plus 30 jours.

Avis

3(7)        La Commission donne immédiatement un avis d'audience et un avis des ordonnances rendues en application du paragraphe (6) aux personnes qu'elle estime, à son entière discrétion, être touchées d'une manière sensible par ceux-ci.

6(1)        Subsection 5(1) is replaced with the following:

Actions of commission

5(1)        The commission may take one or more of the following actions if, after holding a hearing, it is satisfied that the action is in the public interest:

(a) reprimand the registrant;

(b) restrict the registrant's registration or impose terms and conditions on it;

(c) order the registrant to pay a fine;

(d) suspend or cancel the registrant's registration.

6(2)        The following is added after subsection 5(3):

Maximum fine

5(4)        A fine ordered under clause 5(1)(c) must not exceed

(a) $100,000, if the registrant is an individual; or

(b) $500,000, if the registrant is a corporation.

Undertakings

5.1(1)      Instead of holding a hearing under subsection 5(1), the commission may direct the registrar to accept a written undertaking from a registrant if

(a) the commission is satisfied that

(i) the registrant has contravened this Act, the regulations, or a term, condition or limitation on the registrant's registration, and the contravention was minor or trivial in nature, and

(ii) accepting the undertaking is in the public interest; and

(b) the registrant consents to provide the undertaking.

Content of undertaking

5.1(2)      An undertaking may include an undertaking to comply with

(a) this Act, the regulations or a term, condition or limitation on the registrant's registration; and

(b) any other term or condition that the commission determines to be appropriate in the circumstances.

Failure to comply with undertaking

5.1(3)      If, after holding a hearing, the commission is satisfied that the registrant has failed to comply with an undertaking given under subsection (1), the commission may make any order that it may make under subsection 5(1).

7           Sections 7, 11, 13 to 19, 21 to 26, 28 to 31, 34, 38 and 45 of the English version are amended by striking out "mortgage dealer" and "dealer", with necessary grammatical changes, wherever they occur and substituting "mortgage broker" and "broker" respectively, with necessary grammatical changes.

8(1)        Section 8 of the English version is amended by striking out "mortgage dealer", with necessary grammatical changes, wherever it occurs and substituting "mortgage broker", with necessary grammatical changes.

8(2)        The following is added after subsection 8(1):

Sub-categories

8(1.1)      Where a sub-category of mortgage broker is established by a regulation made under section 54.1, the registrar must

(a) establish and use a separate part of the register for registrants within the sub-category; and

(b) ensure the title of the sub-category is set out in the certificate of registration issued to a registrant within the sub-category.

8(3)        Subsection 8(6) of the French version is replaced with the following:

Date d'entrée en vigueur des suspensions ou révocations

8(6)        Si elle suspend ou révoque une inscription en application de l'article 5, la Commission peut prévoir, dans la même ordonnance, que l'entrée en vigueur de la suspension ou de la révocation a lieu le jour où l'ordonnance est rendue ou à une date ultérieure.  Si la date d'entrée en vigueur de la suspension ou de la révocation n'est pas précisée dans l'ordonnance, la suspension ou la révocation entre en vigueur le jour où le registraire inscrit celle-ci au registre du courtage hypothécaire.

9(1)        Section 12 of the English version is amended by striking out "mortgage dealer", with necessary grammatical changes, wherever it occurs and substituting "mortgage broker", with necessary grammatical changes.

9(2)        Subsection 12(2) of the French version is amended in the part before clause (a) by striking out "arrêté" and substituting "ordonnance".

10          Section 20 is amended

(a) in subsection (1), by striking out "commission, compensation, or other remuneration," and substituting "remuneration";

(b) in subsection (2), by striking out "a commission, salary or other"; and

(c) in the English version, by striking out "mortgage dealer" wherever it occurs and substituting "mortgage broker".

11          The heading for Part III of the English version is replaced with "REGULATION OF MORTGAGE BROKERS".

12          Section 32 is amended

(a) by striking out "or" at the end of clause (a);

(b) in clause (b), by striking out "that" and by adding "; or" at the end; and

(c) by adding the following after clause (b):

(c) a person has failed to comply with an undertaking that the person provided under subsection 5.1(1);

13          Section 35 is amended

(a) in clause (1)(c) and subclause (2)(b)(i) of the English version, by striking out "mortgage dealer" and substituting "mortgage broker"; and

(b) in the part after clause (1)(c), by striking out "or by telegram".

14(1)       The following is added after clause 36(1)(a):

(a.1) the registrant is ordered to pay a fine under clause 5(1)(c);

14(2)       Subsection 36(2) is repealed.

15          The following is added after section 36:

Suspension until fine or costs paid

36.1        The commission may, without a hearing, suspend the registration of a registrant, or the registration of the corporation of which the registrant is an authorized official, until the registrant pays a fine ordered under subsection 5(1) or costs ordered under subsection 36(1).

Order of fine or costs may be filed as court order

36.2        An order under subsection 5(1) to pay a fine or under subsection 36(1) to pay costs may be certified by the commission and filed in the Court of Queen's Bench.  Upon filing, the certified copy may be enforced as a judgment of the court.

16          Section 38 is amended

(a) in subsection (1),

(i) in the part of the English version before clause (a), by striking out "mortgage dealer" and substituting "mortgage broker", and

(ii) in the part of the French version before clause (a), by striking out "un avis selon lequel" and substituting "une ordonnance selon laquelle"; and

(b) in the French version of subsection (2), by striking out "un avis selon lequel" and substituting "une ordonnance selon laquelle".

17          Section 44 of the French version is amended by striking out "un arrêté pris" and substituting "une ordonnance rendue".

18          Clauses 47(a) and (b) are replaced with the following:

(a) in the case of an individual, to a fine of not more than $500,000, or imprisonment for a term of not more than one year, or both; or

(b) in the case of a corporation, to a fine of not more than $1,000,000.

19          Section 53 is repealed.

20          Section 54 is amended

(a) in clauses (e), (j), (k), (l), (o), (t) and (u) of the English version, by striking out "mortgage dealer" and "dealer", with necessary grammatical changes, wherever they occur and substituting "mortgage broker" and "dealer" respectively, with necessary grammatical changes; and

(b) by adding the following after clause (i):

(i.1) specifying or describing activities for the purpose of clause (h) of the definition "mortgage broker" in section 1;

(i.2) prescribing requirements respecting referrals under clause 3(1)(f.2), including, without limitation, specifying or describing

(i) information that must be given to the person being referred and the form, manner and timing of the giving of the information, and

(ii) information about the person being referred that must not be given to the person receiving the referral;

(i.3) prescribing information, in addition to any information required to be given under any other provision of this Act, that a registrant must give to a party or potential party to a transactions related to a mortgage;

21          The following is added after section 54:

Sub-categories of registration

54.1(1)     The Lieutenant Governor in Council may establish by regulation one or more sub-categories of registration for mortgage brokers who engage in one or more, but not all, of the activities described in the definition "mortgage broker" in section 1.

Regulations re sub-categories

54.1(2)     A regulation made under this section may

(a) specify a title for a sub-category of registration;

(b) classify registrants into sub-categories;

(c) restrict the types of transactions that registrants in a sub-category may engage in;

(d) subject to any terms and conditions that may be prescribed, exempt registrants in a sub-category from any provision of this Act or the regulations.

Regulations may differentiate

54.1(3)     A regulation made under this section or section 54 may provide differently for different sub-categories of registrants.

22          Section 55 of the French version is amended by striking out "arrêté" and substituting "ordonnance".

Consequential amendment, C.C.S.M. c. C200

23(1)        The Consumer Protection Act is amended

(a) in section 1, by replacing clause (p) of the definition "collection agent" with the following:

(p) a person registered under The Mortgage Brokers Act who is acting in the capacity of a registrant under that Act, or

(b) in clauses 78(1)(d) and 84(1)(c) of the English version, by striking out "The Mortgage Dealers Act" and substituting "The Mortgage Brokers Act".

Consequential amendment, C.C.S.M. c. R20

23(2)       The Real Estate Brokers Act is amended in subsection 42(7) of the English version by striking out "The Mortgage Dealers Act" in the section heading and the subsection and substituting "The Mortgage Brokers Act".

Consequential amendment, C.C.S.M. c. S50

23(3)       The Securities Act is amended in clause 4(2)(b) of the English version by striking out "The Mortgage Dealers Act" and substituting "The Mortgage Brokers Act".

PART 2

C.C.S.M. c. S50 amended

24          The Securities Act is amended by this Part.

25          The following is added after the heading for Part III and before section 22:

Designation of staff members as investigators

21.1(1)     The Director may designate one or more members of the commission's staff as investigators for the purpose of administering and enforcing one or more of the following:

(a) this Act;

(b) The Commodity Futures Act;

(c) The Mortgage Dealers Act;

(d) The Real Estate Brokers Act.

General authority of investigator

21.1(2)     A staff member designated as an investigator for an Act listed in subsection (1) may carry out any investigation reasonably required for the enforcement of that Act.

Assistance

21.1(3)     When conducting an investigation under this section, a staff member may be accompanied and assisted by any person that the staff member considers necessary.

Decision not reviewable

21.1(4)     The Director's decision to take or not take further action as a result of an investigation under this section is final and is not subject to review.

Not a section 22 investigation

21.1(5)     An investigation under this section is not an investigation under section 22.

26          Subsection 148.2(3) is amended in the part before clause (a) by striking out "$100,000." and substituting "$250,000.".

PART 3

COMING INTO FORCE

Coming into force

27(1)       Subject to subsection (2), this Act comes into force on the day it receives royal assent.

Coming into force:  Part 1

27(2)       Part 1 comes into force on a day to be fixed by proclamation.

Explanatory Note

Amendments to the mortgage dealers act

The title of The Mortgage Dealers Act is changed to The Mortgage Brokers Act.

The Act will now apply to every person who, for remuneration,

  • solicits another person to lend or borrow on a mortgage;
  • provides information to a lender about someone who wants to obtain a mortgage;
  • assesses a potential borrower on behalf of a lender; or
  • engages in another mortgage-related activity prescribed in the regulations.

The Act is amended to allow sub-categories of mortgage brokers to be established by regulation.

The Manitoba Securities Commission is given the power to fine a person who is registered under the Act, after holding a hearing about the person's conduct.  For minor or trivial matters, the commission can accept an undertaking from the person without holding a hearing.

The penalty amounts are changed and a number of other administrative amendments are made.

The title change results in consequential amendments to three other Acts.

Amendments to The Securities Act

The director of The Manitoba Securities Commission (the "commission") is authorized to appoint staff members as investigators for the purposes of the four Acts administered by the commission (The Commodity Futures Act, The Mortgage Brokers Act, The Real Estate Brokers Act and The Securities Act).

In addition, the maximum amount that the commission may order a person or company to pay to a claimant as compensation for financial loss is increased from $100,000 to $250,000.