Books and Records
7. (1) Books and records shall be kept and maintained in accordance with generally accepted accounting principles applied on a consistent basis that show all money and assets received and paid out. (2) Books and records shall, where applicable, distinguish between money and assets pertaining to the operation of the mortgage broker and money and assets held in trust or under administration by the mortgage broker, directly or indirectly. (3) Books and records shall include but not be limited to a receipts journal, a disbursements journal, a general journal, a general ledger, a client’s ledger and a trust ledger. (4) Books and records shall be audited annually by a person licensed under the Public Accountancy Act. R.R.O. 1990, Reg. 798, s. 7 (1-4). (4.1) Every mortgage broker shall file with the Registrar a copy of the mortgage broker’s financial statements as of the end of each fiscal year of the mortgage broker, audited by a person licensed under the Public Accountancy Act. O. Reg. 275/92, s. 5 (1). (4.2) Revoked: O. Reg. 319/98, s. 9 (1). (5) The financial statements required under subsection (4.1) shall be accompanied by a report of an auditor of the mortgage broker who shall state in the report whether or not in the auditor’s opinion the report presents fairly the financial position of the mortgage broker with respect to, (a) the results of the operations of the mortgage broker for the fiscal period under review; (b) any money or assets held in trust by the mortgage broker, directly or indirectly; and (c) any money or assets under administration by the mortgage broker, directly or indirectly. R.R.O. 1990, Reg. 798, s. 7 (5); O. Reg. 275/92, s. 5 (2). (5.1) Subsections (4), (4.1) and (5) do not apply to a mortgage broker for a fiscal year if, in the fiscal year, (a) the mortgage broker has not, directly or indirectly, had any mortgages under administration; and (b) the mortgage broker has not, directly or indirectly, held any money or assets in trust, other than money held to pay property taxes. (5.2) Every mortgage broker that is exempt from subsections (4), (4.1) and (5) for a fiscal year by virtue of subsection (5.1), other than a mortgage broker to which subsection (5.4) applies, shall file with the Superintendent a copy of the mortgage broker’s financial statements as of the end of the fiscal year prepared in accordance with generally accepted accounting principles and subject to a review made by a person licensed under the Public Accountancy Act in accordance with generally accepted standards for review engagements. (5.3) Financial statements filed under subsection (5.2) shall include a note confirming that, for the fiscal year, (a) the mortgage broker has not, directly or indirectly, had any mortgages under administration; and (b) the mortgage broker has not, directly or indirectly, held any money or assets in trust, other than money held to pay property taxes. (5.4) A mortgage broker that is a corporation shall file with the Superintendent a copy of the mortgage broker’s financial statements as of the end of the fiscal year, approved by the mortgage broker’s board of directors, if, (a) the mortgage broker is exempt from subsections (4), (4.1) and (5) for a fiscal year by virtue of subsection (5.1); and (b) the mortgage broker is the lender for all of the mortgages that it arranges or deals in and only arranges or deals in mortgages having a principal amount of $1,000,000 or more. (5.5) Financial statements filed under subsection (5.4) shall be accompanied by a statement from an active officer or director of the mortgage broker confirming that, for the fiscal year, (a) the mortgage broker has not, directly or indirectly, had any mortgages under administration; and (b) the mortgage broker has not, directly or indirectly, held any money or assets in trust, other than money held to pay property taxes. (5.6) The financial statements referred to in subsections (4.1), (5.2) and (5.4) shall be filed within 120 days after the end of the fiscal year. (5.7) Subsections (5.1) to (5.6) apply in respect of every fiscal year that ends on or after July 1, 1998. O. Reg. 319/98, s. 9 (2). (6) Every mortgage broker shall keep and maintain with respect to each mortgage transaction and each mortgage application that the mortgage broker is involved in, directly or indirectly, a record of, (a) the names and addresses of all principals, agents and solicitors in respect of each mortgage transaction; (b) the terms and conditions of each mortgage transaction; (c) the itemized fees, expenses, costs and other charges required to be borne by the mortgagor, mortgage purchaser or mortgage assignor in respect of each mortgage transaction; (d) the particulars of any agreement related to a mortgage transaction or application; (e) mortgages held in trust or under administration; (f) names and addresses of all participants, investors or beneficiaries of a trust; (g) correspondence with participants, investors, mortgagees, mortgagors and prospective mortgagors; (h) particulars of any payments received; (i) mortgage payment dates; (j) legal correspondence; and (k) copies of appraisals. (7) An entry in a book or record required to be kept under this section shall be retained for a period of six years from the date of entry. (8) A record required to be kept under subsection (6) shall be retained for a period of six years from the date of maturity or other expiry of the mortgage transaction. R.R.O. 1990, Reg. 798, s. 7 (6-8). Prospectus