(b) Commencement of a proceeding.

1. (1) The filing of a pleading, other than a request for subpoena or a request for an order directing investigation and designating officers pursuant to Arkansas Code § 23-42-205 of the Arkansas Securities Act by the staff with the commissioner shall be deemed to be the institution of a proceeding.
2. (2) Entering of a summary order postponing or suspending effectiveness of a registration shall be deemed to be the institution of a proceeding.

(c) Types of hearings. The State Securities Department shall engage in two (2) forms of hearings:

1. (1) Informal hearings or conferences.

   1. (A) Informal hearings or conferences conducted on an informal basis, at the direction of the commissioner or by mutual consent of the parties, may be held in person at a specified time and place or with the commissioner by telephone.
   2. (B) Informal hearings or conferences may be held upon reasonable notice to all parties, prior to or subsequent to a scheduled formal hearing, or in circumstances where no pleading was filed and no formal hearing has yet been scheduled, or during a recess of a formal hearing.
   3. (C) Issues that may be determined at an informal hearing or conference include the following:

(i) Clarification and simplification of the issues as to pleadings filed;

1. (ii) Exchange of witnesses and exhibit lists and copies of exhibits;

   1. (iii) Stipulations, admissions of fact, and the contents, authenticity, and admissibility into evidence of documents;

      1. (iv) Matters of which official notice may be taken;
      2. (v) Issues relating to witnesses and exhibits;
      3. (vi) Summary disposition of any and all issues;
      4. (vii) Resolution of document production issues or disputes;
      5. (viii) Amendments to pleadings;
      6. (ix) Need for formal action by the department;
      7. (x) Possibility of settlement among the parties; and
      8. (xi) Such other matters as the commissioner determines to be within the scope of such an informal hearing or conference; and

2. (2) Formal hearings.

   1. (A) Parties to the proceedings before the commissioner shall be styled staff, applicants, issuers, broker-dealers, agents, investment advisers, representatives, petitioners, intervenors, complainants, or respondents, etc., according to the nature of the proceedings and relationship of the parties thereto.
   2. (B) All pleadings, applications, complaints, answers, responses, and replies shall be liberally construed with a view to effect justice between the parties, and the commissioner will at every stage of any proceeding disregard errors or difficulties in the pleadings, applications, complaints, answers, responses, and replies or proceedings which do not materially affect the substantive rights of the parties involved.

   3. (C) Prehearing orders.

      1. (i) At or within a reasonable time following the conclusion of a scheduling conference or any prehearing conference, the commissioner may serve on each party an order setting forth any agreements reached and any procedural determinations made.
      2. (ii) If the commissioner has ordered a party to disclose all witnesses or exhibits, no witness may testify and no exhibit may be introduced at the hearing if such witness or exhibit was not disclosed pursuant to such order, unless the commissioner allows a party the sufficient time to prepare in light of the undisclosed witness or exhibit.
   4. (D) Informal discussions. Following any discussion among the commissioner and the parties addressing any issues in a contested case that occur during a hearing recess, the commissioner shall place the substance of the communication on the record, including any action taken and any agreements made by the parties as to any matters that were discussed.