By Carla Giles, MBA, CAE
CEO of CMBA-BC, MBIBC; Executive Director of CMBA National
This article originally appeared in the Summer 2025 issue of Canadian Mortgage Broker
British Columbia is undergoing a major shift in how mortgage service providers are regulated. The Mortgage Services Act (MSA), passed in 2022, is set to replace the aging Mortgage Brokers Act (MBA) on October 13, 2026. With the introduction of the MSA’s enabling regulations and rules on July 14, 2025, the focus now turns to how this new framework will be applied in by the BC Financial Services Authority (BCFSA), the province’s financial regulator.
BCFSA’s approach for the transition is on providing gradual, phased guidance on new regulatory requirements to help mortgage service providers understand and adapt to the changes. To this end, it has launched a phased rollout of transition resources and issued preliminary guidance on licensing, but additional regulatory guidance is expected.
In the meantime, BCFSA has released an advisory, communicating a 15-month transition period and information about the licensing levels and service categories, mandatory transition education, and fees.
Here’s what mortgage brokers, principal brokers, and brokerages need to know.
For a foundational overview of the MSA, see the Spring 2024 issue of Canadian Mortgage Broker.
Expanded regulatory oversight
The MSA provides BCFSA with expanded powers to oversee licensing, enforce compliance, and protect consumers. The legislation introduces distinct licence levels with service categories, new conduct requirements, and stricter oversight of governance and trust accounting practices.
Additionally, the MSA expands the regulatory role of Principal Brokers and mortgage brokerages, who will carry enhanced duties related to compliance, supervision, and governance. It also introduces ongoing suitability assessments, mandatory education, and new conduct standards for all licensees.
The legislation also creates the role of Superintendent of Mortgage Services, who is responsible for regulatory oversight, including compliance monitoring, disciplinary action, and rule-making authority to respond to evolving market risks.
This new regime brings mortgage regulation in line with other financial services legislation in B.C., including the Real Estate Services Act, and is informed by regulatory approaches in jurisdictions such as Ontario and Nova Scotia.
Understanding the legal framework:
Legislation, regulation, rules, and regulatory guidance
To grasp the full scope of the Mortgage Services Act (MSA), it’s important to understand the four layers of authority that underpin the new regime:
Legislation
The Mortgage Services Act is provincial legislation enacted by the B.C. Legislature. As the primary statute, it lays down the foundational framework — defining licensing categories, granting enforcement powers to the BC Financial Services Authority (BCFSA), and creating the role of the Superintendent of Mortgage Services.
Regulation
Under authority granted by the MSA, the Mortgage Services Regulation serves as subordinate legislation enacted by Cabinet via Order in Council. It fills in critical details, including exemptions, fee structures, personal mortgage corporation criteria, disciplinary procedures, and transitional provisions.
Rules
The third layer consists of the Mortgage Services Rules, which set out operational, procedural, and conduct requirements for licensees. While BCFSA will be responsible for making rules under the MSA, the initial set has been approved directly by government. Going forward, new rules will be developed by BCFSA, subject to public consultation and approval by the Minister of Finance.
Regulatory Guidance
Serving as the fourth layer, regulatory guidance — including Regulatory Statements, Guidelines, and Advisories — is issued by BCFSA to explain how to apply the Rules, Regulations, and Act in practice. According to BCFSA, Regulatory Statements are binding instructions, whereas Guidelines offer recommended practices. Advisories communicate key updates and developments in the sector.
Transition timeline: Three phases
On July 14, 2025, BCFSA launched a three-phase transition plan to support the shift from the MBA to the new licensing regime under the MSA. The plan outlines key milestones registrants must meet ahead of the October 13, 2026, implementation, including mandatory transition education for all individuals wishing to continue operating under the new regime.
Additional steps are required for those transitioning into principal broker or brokerage licence levels. These include completing mandatory readiness assessment surveys, submitting a service request to propose who will serve as the brokerage’s principal broker, and identifying the licensing categories — such as dealing, trading, lending or administering — that the brokerage intends to operate under.
To assist with the transition, BCFSA has published an implementation roadmap titled The Road Ahead and is developing a centralized knowledge base that will include advisories, guidelines, and frequently asked questions.
Registrants will also receive regular communications through BCFSA’s Integrated Regulatory Information System (IRIS), a secure regulatory portal where licensees can manage their information, track submissions, and complete licensing tasks. Live virtual webinars and optional in-person information sessions will also be offered to address key topics and questions throughout the transition period.
To help guide this process, BCFSA created the MSA Transition Technical Working Group to provide advice, insights, and feedback on the transition plan. CMBA-BC CEO Carla Giles and CMBA-BC Past-President Marci Deane are both members of this working group.
| Phase | Timeline | Key Activities |
|---|---|---|
| Phase 1: Getting Started |
Months 1 – 3 |
|
| Phase 2: Information & Education |
Months 4 – 11 |
|
| Phase 3: Transition |
Months 12 – 15 |
|
Licence levels and service categories
A central feature of the MSA is the shift from a registration model under the MBA to a modern licensing regime with clearly defined licence levels and service categories. This structure brings greater clarity and accountability to mortgage services in British Columbia.
Licence levels
The framework introduces three core licence levels:
- Mortgage Brokerage: A business entity that provides mortgage services through licensed individuals. Each brokerage must designate a principal broker to oversee compliance and regulatory obligations.
- Principal Broker: The individual responsible for managing the brokerage’s regulatory compliance. This includes supervising brokers, overseeing trust accounts, and ensuring policies and procedures are in place. A principal broker may serve up to four related brokerages, or more with the superintendent’s approval.
- Mortgage Broker: An individual licensed to provide mortgage services on behalf of a single brokerage. Under the MSA, brokers cannot be licensed with more than one brokerage at a time.
These roles replace the former classifications of sub-mortgage broker, mortgage broker and designated individual under the MBA.
A fourth licence level, Mortgage Lender, is included in the MSA, but its implementation will be confirmed by BCFSA once further rules are established.
Mortgage service categories
In addition to licence levels, the MSA introduces four service categories that define the types of activities a licensee may perform. The categories of mortgage services that may be endorsed on a licence are included in the table below.
| Category | Description |
|---|---|
| Dealing in mortgages | Relates to activities involved in originating mortgages, such as soliciting another person to borrow or lend on a mortgage, advising borrowers or lenders about entering into a particular mortgage, providing prospective borrower information to a prospective lender, assessing a prospective borrower on behalf of a prospective mortgage lender, and negotiating or arranging a mortgage on behalf of another person. |
| Trading in mortgages | Captures the transfer of mortgages once they are in place. This includes buying, selling, or exchanging mortgages, whether on your own behalf or on behalf of another, and soliciting another person to buy, sell, or exchange a mortgage. |
| Administering mortgages | Means handling existing mortgage loans for another person. This includes receiving and remitting payments, monitoring borrower’s performance and compliance, and enforcing payment. |
| Mortgage lending | Lending on the security of real property. The other definitions of dealing, trading, and administering then relate to activities surrounding a mortgage lending transaction or relationship. |
For individuals transitioning into a Principal Broker role, additional requirements apply. These include mandatory education, nomination by the brokerage, and a demonstration of suitability. Completion of BCFSA’s Getting Started and The New Principal Broker courses is required. Notably, designated individuals under the MBA will not automatically become Principal Brokers. If a Designated Individual chooses not to assume this role, the brokerage must designate a new Principal Broker.
Mortgage Brokers must complete the Getting Started course and The New Mortgage Broker course, and confirm they are affiliated with only one brokerage. This restriction reflects the MSA’s emphasis on centralized supervision and clearer accountability.
Transitioning to new licence levels
All existing registrants must transition to an appropriate licence level before October 13, 2026.
The table below outlines how current roles under the MBA transition to licence levels under the MSA, along with the steps required to complete the transition, according to guidance provided by the BCFSA as of the publication of this article.
| Current role under MBA | New licence level under MSA | Transition requirements |
|---|---|---|
| Sub-mortgage Broker | Mortgage Broker | Must complete the Getting Started transition education course and The New Mortgage Broker course. May be licensed with only one brokerage. This restriction reflects the MSA’s emphasis on centralized supervision and clearer accountability. |
| Designated Individual | Principal Broker (if applicable) | If assuming the role, must be nominated by the brokerage and complete the Getting Started and The New Principal Broker courses. Suitability requirements apply. |
| Mortgage Broker (business) | Mortgage Brokerage | Must apply for a brokerage licence through BCFSA’s IRIS portal. Required to designate a Principal Broker and select applicable service categories. |
Key reminders:
- Transition education is mandatory for all existing registrants.
- Designated Individuals under the MBA are not automatically transitioned to Principal Brokers. A formal nomination is required.
- Brokers may only be licensed with one brokerage under the MSA.
- A Principal Broker may act for up to four related brokerages, or more with approval from the superintendent.
- Licensees must select their service categories during the transition process.
The new licensing framework aligns closely with the structure used under the Real Estate Services Act and is designed to support stronger oversight, role clarity, and consumer protection across the mortgage sector. Licensees are encouraged to review their responsibilities and stay informed through BCFSA’s guidance as the transition continues.
Personal mortgage corporations
The Mortgage Services Regulation introduces a new option for licensed Mortgage Brokers and Principal Brokers to operate through a personal mortgage corporation (PMC). To do so, the individual must apply for a separate licence for the corporation. This structure allows licensees to receive remuneration through a corporation, offering potential advantages for income and tax planning. Under the MSA, any licensee who receives remuneration through a corporation for mortgage brokering services must ensure that the corporation is licensed.
Requirements for PMCs are set out in Part 6 of the Mortgage Services Regulation. The licence fee for a PMC has been set at $2,100. BCFSA will provide additional guidance on the licensing process and requirements during the transition period.
Licensees are encouraged to carefully consider whether this structure is appropriate for their business and are strongly advised to seek professional legal and accounting advice before proceeding. Further updates from BCFSA will be shared as they become available
Standards of conduct and compliance
BCFSA has not yet released detailed guidance on standards of conduct and compliance under the Mortgage Services Act. However, the Mortgage Services Rules — specifically Part 3 — set out a clear framework of expectations for licensees. These rules establish broad responsibilities for Mortgage Brokerages, Principal Brokers, and individual Mortgage Brokers, focusing on integrity, consumer protection, and accountability across all mortgage activities.
According to the Rules, Mortgage brokerages are to develop and maintain policies and procedures to ensure compliance with the Act, regulations, and rules. These include systems for supervising licensees, verifying client identities, determining mortgage suitability, disclosing material risks and conflicts of interest, managing incentives, preventing fraud, handling complaints, and maintaining records. Brokerages are also required to review and document their internal compliance systems at least annually or after any significant breach.
Principal brokers are responsible for the overall competence and compliance of their brokerage. They must be actively engaged in management, supervise staff, ensure proper record-keeping and trust account handling, and report potential misconduct or unlicensed activity to the superintendent.
Mortgage Brokers must also meet compliance obligations, including reporting issues to the Principal Broker or superintendent and maintaining open communication with the Principal Broker. All licensees must act with reasonable care and skill and follow applicable requirements of the Business Practices and Consumer Protection Act.
Duties to clients are also set out clearly, including acting in the best interest of the client, maintaining confidentiality, and disclosing all known material information. The rules also include provisions for modifying or limiting duties in dual agency scenarios — such as underserved remote locations — under specific conditions.
Further, the rules establish duties relating to borrowers and lenders, including identity verification, disclosure obligations, preventing unlawful or fraudulent transactions, and restrictions on tied selling.
While the regulatory framework is comprehensive, the industry awaits further guidance from BCFSA on how these rules will be interpreted and implemented in practice. This forthcoming guidance will be essential for brokerages and licensees to align their conduct, policies, and systems with supervisory expectations under the new regime. Licensees are encouraged to monitor BCFSA communications and prepare to update their practices accordingly.
Licensing fees under the MSA
Under the MSA, BCFSA will implement a new licensing fee structure when the MSA comes into force on October 13, 2026. Until then, the existing fee schedule under the Mortgage Brokers Act (MBA) remains in effect.
The new fees will apply to both new applicants and renewing licensees. Each application or renewal fee includes one category of mortgage service. If a licensee wishes to be licensed in more than one category — such as dealing, trading, administering, or lending — additional fees will apply.
Licensees who also apply for a Personal Mortgage Corporation (PMC) licence should note that a separate fee is charged for that application. In some cases, where multiple service categories are involved, licensees may be required to pay multiple fees. BCFSA recommends that applicants carefully review its published guidance to understand all applicable fees based on their licensing situation.
| Fee item | Amount of fee |
|---|---|
| New licence | $2,100 |
| Licence renewal | $2,000 |
| Late renewal | $2,100 |
| Licence amendment | $250 |
| Add licence category | $500 |
| Remove licence category | $200 |
| Licence reinstatement | $300 |
| Fee item | Amount of fee |
|---|---|
| New licence | $3,100 |
| Licence renewal | $3,000 |
| Late renewal | $3,100 |
| Licence amendment | $250 |
| Add licence category | $1,000 |
| Remove licence category | $500 |
| Licence reinstatement | $300 |
What’s still to come
BCFSA has indicated that further guidance will be released to support the implementation of the new regulatory regime under the Mortgage Services Act. This guidance is expected to clarify outstanding questions and provide additional detail on specific compliance expectations.
Key areas included in legislation, regulation, or rules where further guidance is anticipated include:
- Corporate governance requirements for brokerages and personal mortgage corporations (PMCs), including documented policies on risk management, trust account handling, and financial reporting.
- Enhanced responsibilities for Principal Brokers to manage brokerage operations, supervise licensees, and ensure compliance with regulatory requirements.
- Continuing education requirements to ensure licensees remain current with evolving industry practices and obligations.
- Enforcement measures, including administrative penalties, fines, and the potential for criminal sanctions.
- Mandatory errors and omissions (E&O) insurance to protect both clients and licensees.
Mortgage service providers are encouraged to monitor BCFSA communications and prepare for ongoing changes as the new framework comes into effect.
Preparing for the road ahead
As the Mortgage Services Act brings a modern licensing framework into force, mortgage service providers — particularly those operating through corporations or expanding teams — will face enhanced oversight and stronger enforcement powers.
Early engagement with the new requirements can ease the transition. Targeted training will support staff in meeting updated education standards, while consultation with legal, accounting, and IT advisors can help identify the governance, structural, and reporting adjustments required to comply with the new regulatory regime.
CMBA-BC will continue to support its members through the transition by providing timely updates, practical resources, and opportunities for engagement as implementation unfolds.
For comprehensive resources, visit BCFSA’s Mortgage Services Act landing page and consult the full text of the Mortgage Services Regulation and Mortgage Services Rules.
Disclaimer: The information provided in this article is for general information purposes only and reflects the regulatory framework as available at the time of publication. Mortgage service providers should consult BCFSA’s official materials and seek professional advice as needed to ensure compliance.
Questions about the MSA and the transition process can be sent to BCFSA’s Service Centre team at msa@bcfsa.ca. BCFSA can also be contacted by phone at 604-660-3555 (local) or 866-206-3030 (toll-free).