Mortgage Broker

Spring 2014

Mortgage Broker is the magazine of the Canadian Mortgage Brokers Association and showcases the multi-billion dollar mortgage-broking industry to all levels of government, associated organizations and other interested individuals.

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Page 45 of 47

exemptionqualifications 46 | spring 2014 MortgageBroker The BC SeCuriTieS CommiSSion has extended its decision to implement exempt market dealer registration requirements for mortgage investment corporations and syndicators to the end of June 2015. is means that mortgage investment corporations and mortgage syndicators, which might otherwise have to apply for registration under the Securities Act, will be able to avoid registration provided that they comply with the conditions of the exemption. When the BCSC conducted a sample audit of how many mortgage investment entities were complying with the conditions over a year ago, they found a surprising rate of non-compliance. Only 50 entities complied with the requirement to file an information report. Of those filing a report, only 10 per cent of those entities were providing the requisite risk acknowledgement form to investors. e chances of the BCSC proceeding with its proposal to revoke the exemption are exponentially increased with this level of non-compliance. e conditions, which must be met to qualify a person for the exemption, are: • e person is not registered under provincial or territorial securities legislation; • e person is not registered under the securities legislation of a foreign jurisdiction; • Prior to the trade, the person does not advise, recommend or otherwise represent to the purchaser that the security being traded is suitable to the purchaser, with regard to the purchaser's – Investment needs and objectives – Financial circumstances, or – Risk tolerance; • At or before the time the purchaser enters into an agreement to purchase the security, the person obtains from the purchaser a signed Risk Acknowledgement Form in the form prescribed in Appendix A, and; • e person has electronically filed with the Commission a current information report in the form prescribed in Appendix B, or has filed an update of a previously filed information report, on or before the 10th day aer the prospectus-exempt distribution. Appendix A to BCI 32-517 Risk Acknowledgement under BCI 32-517 Exemption from Dealer Registration Requirement for Trades in Securities of Mortgage Investment Entities Name of Issuer: Name of Seller: I acknowledge that: • e person selling me these securities is not registered with a securities regulatory authority and is prohibited from telling me that this investment is suitable for me; • e person selling me these securities does not act for me; • is is a risky investment and I could lose all of my money; • I am investing entirely at my own risk. Date Signature of Purchaser: Print Name of Purchaser: Name of salesperson acting on behalf of the seller: Sign two copies of this document. Keep one for your records. Appendix B to BCI 32-517 Information report under BC Instrument 32-517 Exemption from Dealer Registration Requirement for Trades in Securities of Mortgage Investment Entities [Date] To: British Columbia Securities Commission [Name of firm or, if a sole proprietor, individual owner's name and any related trade names] Instruction: State the full name of the firm or individual. Add "32-517" aer the firm name. [Street address] Instruction: State the street office for the head office of the firm or proprietorship. Do not include a P.O. box or agent for service. [Website address for firm] Instruction: State the website address for the firm. If there is no website address, state "not applicable". [Telephone number for firm or, if sole proprietor, individual] [Name of individual responsible for ensuring conditions to use this registration exemption are met] Instruction: State the name of the individual who may be contacted with respect to any questions regarding the contents of this report. is individual should be a senior executive for the firm. [Telephone number for responsible individual named above] [E-mail address for responsible individual named above] Does the firm also carry on business at other office locations? __Yes __No [Names of salespersons employed by the firm to sell securities] [Date] Collection and use of personal information e personal information submitted in this report is collected on behalf of and used by the securities regulatory authorities or, where applicable, the regulators under the authority granted in securities legislation for the purposes of its administration and enforcement of the securities legislation. If anyone referred to in this report has any questions about the collection and use of their personal information, they can contact the British Columbia Securities Commission: British Columbia Securities Commission P.O. Box 10142, Pacific Centre 701 West Georgia Street Vancouver, BC V7Y 1L2 Attention: Freedom of Information Officer Telephone: (604) 899-6500 or (800) 373-6393 • BCSC extends exemption to 2015 Brokers must comply with conditions of the exemption BY SAMANTHA GALE p46-OBC_BCSC.indd 46 14-05-08 2:24 PM

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