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Letter Summary:
The non-mandatory, principles-based Sanction Guidelines are intended to provide a framework for the exercise of discretion in determining sanctions in MFDA disciplinary proceedings. The Guidelines include key factors to be considered in determining sanctions, as well as the types of sanctions that may be imposed by a hearing panel. Key factors include industry expectations, the seriousness of the misconduct, whether corrective measures were taken and the respondent’s prior conduct. Types of sanctions include fines, suspension, permanent prohibitions and termination of registration. The proposed Guidelines are a revision of the MFDA Penalty Guidelines that have been in force since 2006.
Overview of the Council’s Comments:
The council supports the principles espoused in the Proposed Guidelines and believes transparency in the application of principles-based regulatory sanctions is of utmost importance. Specifically, the council believes the Proposed Guidelines would be most helpful if the key factors and types of sanctions had expanded commentary and harmonized, to the extent possible, with the IIROC Sanction Guidelines. Detailed commentary on individual key factors for sanction consideration can be found in the council’s letter.