13 Oct Mortgage Services Act: New Financial Reporting Rules for BC Brokerages

British Columbia’s Mortgage Services Act (MSA) comes into force on October 13, 2026. On that date, new financial reporting and assurance requirements take effect for mortgage brokerages that administer mortgages or maintain trust accounts. Affected brokerages must file annual financial statements and an accountant’s report with the BC Financial Services Authority (BCFSA) within 120 days of each fiscal year-end.

Why the rules are changing

The MSA replaces the Mortgage Brokers Act (MBA), which has been in place since 1972 and is widely considered outdated for today’s mortgage and financial services environment. The MSA received Royal Assent in 2022 and is supported by the new Mortgage Services Rules and Mortgage Services Regulation.

The changes respond to recommendations from the Cullen Commission of Inquiry into Money Laundering in British Columbia. The Commission identified weaknesses in regulatory oversight of the mortgage and real estate sectors, particularly around money laundering and fraud. The new framework strengthens oversight, increases transparency, and substantially expands and formalizes financial reporting and assurance requirements for brokerages.

BCFSA administers the MSA and has published Regulatory Statement 26-010 on June 25, 2026, which sets out the form and content of the required reports.

Who must file, and when

Under section 84 of the Mortgage Services Rules, a brokerage that provides administering or lending services, or that maintains a trust account, must file the following with the Superintendent of Mortgage Services within 120 days after its fiscal year-end:

• Financial statements for the fiscal year, with the level of assurance described below
• An accountant’s report for the fiscal year, covering specific procedures prescribed by BCFSA

The lending category is not yet in force. Until BCFSA announces a date, these requirements apply in practice to brokerages that administer mortgages or maintain trust accounts.

BCFSA has also published guidance on financial filing requirements for in-flight files that span the transition from the MBA to the MSA. Brokerages with a fiscal year-end near October 2026 should review it to confirm which regime applies to their first filing.

Brokerages that did not hold trust money

A brokerage that did not hold or receive any trust money during the fiscal year may file a solemn declaration, known as a Trust Account Declaration, instead of an accountant’s report. The declaration replaces only the accountant’s report. Financial statements are still required and must be filed with it.

The declaration must be made by a principal broker before a commissioner for taking affidavits, in a form approved by the Superintendent. It must list every bank account the brokerage maintained during the year and confirm that no trust money was held or received.

Reporting requirements

The level of reporting required depends on the type of brokerage:

A compilation is not available by default. The Superintendent may authorize it only where the brokerage meets all three conditions:

1. For at least three consecutive fiscal years immediately before authorization, it filed financial statements that were audited (for a public company) or subject to a review engagement.
2. No significant exceptions related to the trust account or general records were reported or identified in reviews during those three years.
3. The Superintendent is satisfied that current assets exceeded current liabilities at the end of each of those three years.

In practice, most private brokerages should expect at least three years of review engagements before they can apply to move to a compilation. The Superintendent can withdraw a compilation authorization, after notice, if filings do not meet the Rules, trust or record-keeping exceptions arise, or current assets fall short of current liabilities at a year-end.

What the accountant’s report covers

The accountant selects three months in the fiscal year, including the final month, and tests the brokerage’s records for those months. The selected months are reported to BCFSA. The procedures address, at a minimum:

• Contingent liabilities at year-end
• Whether bank accounts are held with savings institutions in BC and trust accounts are clearly designated as trust accounts
• Whether each trust account has at least one principal broker as an authorized signatory
• Whether bank reconciliations for trust and general accounts were prepared as of month-end, within 35 days, and agree to the bank statements and ledgers
• For pooled trust accounts, whether trust liability and asset reconciliations were prepared and each liability is attributable to a specific mortgage, transaction or client
• Whether trust money was deposited and disbursed as the Act, Regulation and Rules require, and whether any negative trust balances were reported to BCFSA

Once the accountant completes the report, the brokerage must certify it. For a corporation, both a principal broker and a director or officer must sign. The certification confirms that all books and records were disclosed to the accountant and that any exceptions have been addressed in a written submission to BCFSA.

Who can do the work

The accountant must be a CPA, professional accounting corporation, or registered firm authorized by a provincial CPA organization to perform an audit. That authorization is required even for a review or compilation engagement, so a CPA or firm that isn’t authorized to perform audits, including one licensed only for compilation work, does not qualify.

The accountant must also be independent of the brokerage, any related licensee, and any controlling person or significant interest holder. The brokerage must give the accountant access to all financial records for the year and disclose every savings institution account it opened, closed or maintained.

What to do now

With the MSA in force from October 13, brokerages should act before their first fiscal year-end under the new regime:

1. Confirm whether you administer mortgages or maintain a trust account, and whether you held any trust money during the year. If you lend, watch for BCFSA’s announcement on the lending license category.
2. Identify the assurance level you need and engage an independent accountant authorized to perform audits.
3. Put monthly bank and trust reconciliations on a schedule that meets the 35-day deadline, with trust reconciliations reviewed by a principal broker or their designate.
4. Review BCFSA’s in-flight file guidance to confirm which rules apply to your first filing.

Clearline’s assurance team can perform audit, review, and compilations engagements for your brokerage.  We can also complete the accountant’s report procedures required for BCFSA filings, and help you set up reconciliation processes that hold up under the new rules. Contact us to discuss your brokerage’s requirements.