IN THE MATTER OF the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c.29, as amended (the “Act”), in particular sections 16, 19, and 21;

AND IN THE MATTER OF Sergiy Shchavyelyev

NOTICE OF PROPOSAL TO REFUSE TO RENEW LICENCE

TO: Sergiy Shchavyelyev

TAKE NOTICE THAT pursuant to sections 16, 19, and 21 of the Act, and by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (the “Chief Executive Officer”), the Director, Licensing, Market Conduct (the “Director”) is proposing to refuse to renew a mortgage broker licence to Sergiy Shchavyelyev

Details of the reasons for this proposal are described below. This Notice of Proposal includes allegations that may be considered at a hearing.

SI VOUS DÉSIREZ RECEVOIR CET AVIS EN FRANÇAIS, veuillez nous envoyer votre demande par courriel immédiatement à: contactcentre@fsrao.ca

YOU ARE ENTITLED TO A HEARING BY THE FINANCIAL SERVICES TRIBUNAL (THE “TRIBUNAL”) PURSUANT TO SECTIONS 21(2) AND 21(3) OF THE ACT. A hearing by the Tribunal about this Notice of Proposal may be requested by completing the enclosed Request for Hearing Form (Form 1) and delivering it to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you. The Request for Hearing Form (Form 1) must be mailed, delivered, faxed or emailed to:

Address:
Financial Services Tribunal
25 Sheppard Avenue West, 7^th Floor
Toronto, Ontario
M2N 6S6

Attention: Registrar

Fax: 416-226-7750

Email: contact@fstontario.ca

For additional copies of the Request for Hearing Form (Form 1), visit the Tribunal's website at www.fstontario.ca

The hearing before the Tribunal will proceed in accordance with the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal ("Rules") made under the authority of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended. The Rules are available at the website of the Tribunal: www.fstontario.ca. Alternatively, a copy can be obtained by telephoning the Registrar of the Tribunal at 416-590-7294, or toll free at 1-800-668-0128 extension 7294.

At a hearing, your character, conduct and/or competence may be in issue. You may be furnished with further and or other particulars, including further or other grounds, to support this proposal.

REASONS FOR PROPOSAL

I. INTRODUCTION

1. These are the reasons for the proposal by the Director to refuse to renew the mortgage broker licence of Sergiy Shchavyelyev (“Shchavyelyev”).
2. The Director believes, on reasonable grounds, that Shchavyelyev is not suitable to be licensed having regard to the circumstances prescribed under the Act and Regulations for conduct contrary to the statute and for failing to make disclosure on licensing applications, and failure to maintain Errors and Omissions insurance coverage.

II. BACKGROUND

FSRA Licensing History

3. Shchavyelyev has been actively licensed as a Mortgage Broker since November 26, 2010 (Licence no. M09002646). He has been the principal broker of EquityLine Financial Corp. (the “Brokerage”) since April 1, 2014. On March 26, 2025, Shchaveyelyev applied to renew the mortgage broker licence.
4. Shchavyelyev is the sole director of the Brokerage (Licence no. 12570). The Brokerage (Corporation no. 2431756) has been duly incorporated under the laws of Canada since August 27, 2014.
5. Shchavyelyev is the director of the Administrator (Licence no.13068) EquityLine Services Corp. (Corporation no. 2615995) which has been duly incorporated under the laws of Canada since January 18, 2018.
6. Shchavyelyev is the CEO of EquityLine SPV Limited Partnership (SVP) and EquityLine Mortgage Investment Corporation (MIC), both of which are not licensed by FSRA. MIC is a sole limited partner of SPV.
7. SPV is subject to receivership proceeding brought on August 8, 2024. KSV Restructuring has been appointed as a receiver for all assets, undertakings and properties of SPV.

Bankruptcy and Insolvency Proceedings

8. On June 5, 2024, Equitable Bank filed an application to the Ontario Superior Court of Justice (Civil Court case no. CV-24-00721560-00CL) against EquityLine SPV Limited Partnership under the Bankruptcy and Insolvency Act, R.S.C. 1985, C. B-3, As Amended and the Courts of Justice Act, R.S.O. 1990, C. C. 43, As Amended.
9. The receivership originated by Equitable Bank due to its concerns of SPV’s financial health and indicators of mismanagement by its President and CEO, Sergiy Shchavyelyev, following SPV’s default on a loan of $10.1 million advanced by Equitable Bank to SPV earlier in December 2021
10. On August 8, 2025, the Court ordered SPV (Debtor) into receivership at the application of Equitable Bank. KSV Restructuring Inc. was appointed receiver.

FSRA Applications

11. On March 26, 2025, Shchavyelyev applied for the renewal of his Mortgage Broker licence (the “Application”). In the Application, Shchavyelyev made false statements or provided false information to questions intended to assess his suitability for licensing. Shchavyelyev declared he had truthfully answered all the application questions, and certified he understood that providing false, misleading or incomplete information may be sufficient grounds to reject the application.
12. Shchavyelyev falsely answered “no” to the following questions on the application.

    Have you ever been a controlling shareholder, officer, or partner of a corporation or partnership which was declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency, or is currently not discharged or are you currently a defendant in any civil proceeding or are there any unsatisfied judgements imposed by a civil court in Canada or elsewhere, against a business in which you have an interest of at least 10 percent? If yes, give the name of such partnership, firm or corporation and specify a detailed job description”

    Have you ever been a controlling shareholder, officer, or partner of a corporation or partnership which was declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency, or is currently not discharged or are you currently a defendant in any civil proceeding or are there any unsatisfied judgements imposed by a civil court in Canada or elsewhere, against a business in which you have an interest of at least 10 percent?

Annual Information Returns on behalf of the Brokerage

13. The Annual Information Return (AIR) is collected by FSRA each year to help identify, assess and monitor risk in the mortgage brokering sector and to assess the Annual Regulatory Fee (ARF). The deadline to file an AIR is March 31 of each year.
14. Only the Principal Broker of a licensed mortgage brokerage can complete and submit the AIR.
15. As the principal broker, Shchavyelyev was required to submit the AIR on behalf of the Brokerage by March 31, 2024, to report all information pertaining to the period covering January 1 to December 31, 2023. The Brokerage failed to file the AIR as required.
16. On December 1, 2025, the Brokerage licence was revoked by Order of the CEO, pursuant to s. 22 of the Act for failure to file the AIR.

Annual Information Returns on behalf of the Administrator

17. Only the director of a licensed mortgage administrator can complete and submit the AIR.
18. As Director, Shchavyelyev was required to submit the AIR on behalf of the Administrator by March 31, 2024, to report all information pertaining to the period covering January 1 to December 31, 2023, and consequently provide for the calculation of the Annual Regulatory fee (ARF). The Administrator failed to file the AIR or pay the ARF as required.
19. On December 1, 2025, the Administrator licence was revoked by Order of the CEO, pursuant to s. 22 of the Act for failure to file the AIR and pay the ARF.

Errors and Omissions

20. As Principal Broker, Shchavyelyev failed to maintain the Brokerage’s errors and omissions insurance coverage (“E&O”) after July 1, 2024, and failed to inform FSRA that the E&O lapsed.

Incomplete Application

21. Shchavyelev failed to complete the application to renew the licence. He has been advised on multiple occasions of deficiencies in the information required to complete the application.

III. GROUNDS FOR REFUSAL TO RENEW MORTGAGE BROKER LICENCE

22. Section 16(4) of the Act states that the Chief Executive Officer shall issue a licence to an applicant who satisfies the prescribed requirements for the licence unless the Chief Executive Officer believes, on reasonable grounds, that the applicant is not suitable to be licensed having regard to such circumstances as may be prescribed and such other matters as the Chief Executive Officer considers appropriate.
23. Section 10 of Ontario Regulation 409/07 states that in determining whether an individual is not suitable to be licensed as a mortgage agent, the Chief Executive Officer is required by subsections 14(1) and 16(4) of the Act to have regard to the following prescribed circumstances:
    1. Whether the individual’s past conduct affords reasonable grounds for the belief that he or she will not deal or trade in mortgages in accordance with the law and with integrity and honesty.
    2. Whether the individual is carrying on activities that contravene or will contravene the Act or the regulations if he or she is licensed.
    3. Whether the individual has made a false statement or has provided false information to the Chief Executive Officer with respect to the application for the licence.
24. Section 42(1) of the Act states that a brokerage shall maintain errors and omissions insurance in a form approved by the Chief Executive Officer with extended coverage for loss resulting from fraudulent acts or shall have some other form of assurance in a form approved by the Chief Executive Officer.
25. Section 13 of O Reg 193/08 states that if the errors and omissions insurance or other assurance maintained by a brokerage or mortgage administrator in accordance with the applicable standards of practice is cancelled or is not renewed, the brokerage or mortgage administrator shall immediately notify the Chief Executive Officer.
26. Shchavyelyev failed to provide evidence of the brokerage’s E&O coverage after July 1, 2024. The Director is satisfied that the Brokerage contravened section 29(1) by failing to notify the Chief Executive Officer that its E&O insurance had lapsed in accordance with section 13 of O Reg 193/08. Further, the Brokerage contravened section 42(1) of the Act by failing to maintain E&O coverage between July 1, 2024, to present.
27. The Director is satisfied Shchavyelyev contravened section 7(6) of the Act by failing to take reasonable steps under section 2(1) of O Reg 410/07 to ensure the Brokerage complied with the E&O and AIR requirements under the Act and regulations, and for failing under section 2(2) of O Reg 410/07 to ensure that the Brokerage take reasonable steps to deal with these contraventions.
28. FSRA assesses suitability for licensing of applicants to ensure consumers receive competent and ethical mortgage brokering services from licensed mortgage agents. Consumers rely on licence holders to understand their options to make informed decisions about important financial decisions related to the purchase and refinancing of properties.
29. There are reasonable grounds to believe that Shchavyelyev is not suitable to be licensed as a mortgage agent. Shchavyelyev demonstrated a pattern of providing false statements on applications and failing to be compliant with statutory obligations Further, Shchavyelyev’s past conduct calls into question his ability or willingness to comply with the requirements of the Act and gives the Director reasonable grounds for belief that Shchavyelyev will not deal or trade in mortgages in accordance with the law and with honesty and integrity.
30. The public interest cannot be adequately protected by attaching terms or conditions to the licence.
31. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario this 15^th day of December 2025

Original signed by

Yovanka McBean
Director, Licensing, Market Conduct

By delegated authority from the Chief Executive Officer

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