BC Mortgage Services Rules: What It Means for Mortgage Service Providers

What is changing under BC's new Mortgage Services Act?

Beginning October 13, 2026, BC's new Mortgage Services Act will replace the old Mortgage Brokers Act, which was originally introduced in 1972. For decades, BC mortgage brokers operated under legislation written before modern digital lending, private lending syndicates, and complex brokerage teams existed. The Mortgage Services Act (MSA) modernizes this structure and grants BCFSA expanded rule-making and enforcement powers.

This change mirrors how the BC real estate industry shifted under the Real Estate Services Act. The framework focuses on licensed accountability, formal governance, and an expectation that firms actively manage compliance within daily operations rather than treating it as an annual formality.

TL;DR BC's Mortgage Services Act replaces the Mortgage Brokers Act on October 13, 2026. The legislation shifts mortgage brokers from registration to licensing, introduces mandatory governance frameworks, expands client duties and recordkeeping, requires annual financial filings within 120 days of fiscal year-end for qualifying brokerages, and increases regulatory penalties up to $500,000 or more.

How does the shift from registered to licensed affect brokerages?

Under former legislation, mortgage brokers and brokerages were considered registered with the regulator, previously known as FICOM. Under the new MSA, individuals and brokerages become licensed. This change comes with defined obligations to maintain that status.

BCFSA will likely require specific disclosure forms for clients and lenders, formal governance reporting, and clear documentation of how licensees meet their duty of care. Brokerages that viewed compliance as a once-a-year renewal will need to adjust how they operate.

What are the new governance requirements for principal brokers?

Two major additions to the MSA establish requirements that did not exist in the prior legislation:

1. A mandatory governance policy framework.

2. Formal requirements for brokerages to maintain compliance policies and procedures.

The principal broker is accountable for these requirements. BCFSA expects active oversight of licensees, formal reporting of misconduct to the regulator, and reliable management of trust accounts when holding client funds.

For small and mid-sized brokerages, this means compliance cannot remain an informal habit managed by one person. It must be built into operational workflows. Brokerages looking to align their internal controls can seek advisory support to address these structural expectations.

What new client duties and recordkeeping rules apply?

The MSA introduces a statutory duty for licensees to act in the best interests of their clients. Licensees must assess mortgage suitability and disclose material risks before presenting options to a borrower or lender. Combined with identity verification under anti-money laundering rules and fraud prevention duties, brokerages must be able to demonstrate how they arrived at their recommendations.

Recordkeeping obligations expand to cover suitability assessments, disclosures, referral arrangements, co-brokering files, and internal governance records. Reporting duties to BCFSA are also wider: brokerages must report disciplinary sanctions, insolvency, ownership updates, and significant governance changes. Additionally, teams of licensees working together must register with BCFSA before offering services as a team.

When are annual financial filings and trust account reviews required?

Mortgage brokerages that administer mortgages, engage in mortgage lending, or maintain trust accounts must file an annual financial report with BCFSA within 120 days of their fiscal year-end. This matches the model real estate brokerages follow under RESA, where annual financial statements and reporting are mandatory filings.

Depending on your brokerage model, this filing requires a review engagement or a compilation engagement through your accounting provider. For many brokerages, this makes year-end financial reporting a direct regulatory obligation rather than just an internal bookkeeping task.

While most mortgage brokerages do not hold funds for clients, those managing trust accounts face strict rules covering reconciliations, deficiency reporting, and solvency monitoring. You can learn more about regulator expectations in our guide to BCFSA audits and common trust accounting issues.

What are the penalties for non-compliance under the MSA?

BCFSA's enforcement powers expand under the MSA, tying penalties directly to specific rule contraventions. Under the old legislation, maximum penalties were capped at $50,000. Under the MSA, administrative penalties can reach $500,000, with higher fines possible for repeat contraventions.

How should your brokerage prepare for October 2026?

Preparing for the transition does not require solving every operational question immediately. Brokerages should begin by reviewing their existing supervisory policies, recordkeeping files, and reporting workflows against the new rules to identify operational gaps.

Our team works with real estate and mortgage brokerages across British Columbia to establish governance manuals, design principal broker supervision workflows, review trust account controls, and prepare year-end regulatory financial filings. Contact our team to review your brokerage's transition plan.

This article provides general information for mortgage brokerages and mortgage service providers in British Columbia. It does not constitute legal advice. Brokerages should review their specific obligations under the Mortgage Services Act based on their business model.