The Ontario Securities Commission has approved an amendment to the Mutual Fund Dealers Association of Canada’s by-law regarding its hearings.

The MFDA’s proposal allows a hearing panel to consist of two members if an industry representative is unable to continue serving on the panel, provided that one of the remaining members is the appointed public representative.

The proposal was published for comment on October 27, and some immaterial changes have been made since the time the time it was originally published. Two comments were received, one from the Investment Funds Institute of Canada; and, one from Portfolio Strategies Corp.

Portfolio Strategies expressed the view that the decision to continue a hearing before a two-member panel should be left to the respondent. However, the MFDA maintained that, “It is a fundamental principle of administrative law that an administrative tribunal has, and should have, inherent jurisdiction to control all aspects of the adjudicative process over which it presides, subject to the requirements of natural justice and fairness and any specific requirements contained in enabling documents.” It concluded that a panel has the discretion to choose whether to continue a hearing before a two-member panel.

IFIC and Portfolio Strategies both raised the question of what procedure would be followed in the event of a tied decision rendered by a two-member panel. The MFDA said that the procedure will depend on the type of tied decision: where an agreement concerning any procedural matter or motion cannot be reached, the decision of the chair shall prevail; where there is no agreement on any findings of misconduct, the matter shall be deemed dismissed; and, where an agreement cannot be reached concerning the penalty to impose, the decision of the chair will prevail.