The Ontario Securities Commission has rejected an application to strike down a new bylaw adopted by the Mutual Fund Dealers Association of Canada that will allow the industry regulator to hold secret hearings to cancel a mutual fund broker's registration to operate. In a ruling released yesterday, the OSC said it could not rule on an application by the Independent Financial Brokers of Canada (IFB), which represents about 4,000 independent financial advisers, because the group itself is not a party to a decision under the new bylaw. The commission, however, said it could still hear an appeal of the bylaw if a case came forward dealing with a specific person affected by the rule. The MFDA adopted the bylaw last year giving it the power to hold secret hearings if notification of the accused would be "prejudicial to the public interest." The IFB argued the powers are too broad and take away the fundamental right to mount a defence against legal accusations.
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