The Mutual Fund Dealers Association is proposing changes to the by-law governing its hearing and review processes.

The regulator says that the proposed amendments are required, “to clarify procedural aspects of the enforcement process so that hearings may be conducted in a more cost-effective, efficient and flexible manner that better serves the interests of the [MFDA], the parties and the public.”

The amendments target a couple of areas: membership application hearings, and disciplinary hearings. For membership hearings, they would: provide that the review hearing by the MFDA board is an appeal confined to the record of the original hearing; allow it to prescribe rules of procedure for these proceedings; and provide that the board’s decision on a review of a membership application hearing is final.

Regarding disciplinary hearings before regional councils, the proposed amendments were developed to: replace the fixed notice and time requirements with a general requirement that these are consistent with its rules of procedure; and allow a single public representative of a Regional Council to act on behalf of a Hearing Panel for the purpose of presiding over preliminary motions and other procedural matters.

For board reviews of disciplinary hearings, the proposed amendments would: permit the board to review the outcome of any disciplinary proceeding against a member, including cases where it imposed no penalty; require that the board panels assigned to conduct the review hearings must include one public representative of a Regional Council; and provide that the board has the discretion to award any or all of the costs of a review against the firm.

Regarding securities commission reviews of disciplinary hearings, the proposed amendments: confirm that the MFDA may seek review of a disciplinary decision before the securities commissions; and, provide that the decision of the board on a review of a disciplinary hearing takes effect immediately but the board (or a securities commission) may grant a stay of the order pending review by a securities commission.

The proposed amendments were developed by MFDA staff based on its internal review of the efficiency and effectiveness of its by-laws. The proposed amendments were approved by the MFDA board on September 23.

Comments on the proposed changes are due in 30 days.