Top-ranked broker faces licence loss in FSRA trust account action
On the corporate side, FSRA alleges that Capitis contravened the MBLAA and its regulations in the operation of its mortgage administration business — specifically, that the company misused its trust account and mishandled mortgage funds, contrary to sections 23(1), 35, and 37 of Ontario Regulation 189/08.
Those provisions set out strict requirements for how mortgage administrators must segregate client funds in designated trust accounts, maintain detailed transaction records, and report accurately to FSRA on their financial affairs.
FSRA is proposing to refuse the surrender and revoke the mortgage administrator licence issued to Capitis, along with a compliance order.
Trust account obligations carry particular weight in Ontario’s regulatory framework because they exist to protect investors and borrowers from commingling or misappropriation of funds they have advanced under the expectation of regulated oversight.
Part of a wider enforcement surge
The action against Frost and Capitis arrives during a sustained escalation of regulatory activity across Ontario’s mortgage sector. In its fiscal 2024–25 cycle, FSRA initiated 100 enforcement actions, nearly double the 65 from the prior year.
