DISPUTE RESOLUTION

General

(New) Simplified Arbitration

FINRA has amended its rules to provide a new option for simplified arbitration. The amendments provide an additional hearing option for parties in arbitration with claims of $50,000 or less, excluding interest and expenses. The amendments are effective on September 17, 2018.

FINRA Regulatory Notice 18-21 (July 23, 2018): SEC Approves Amendments to Arbitration Codes to Provide an Additional Hearing Option in Simplified Arbitration

 

Definition of Non-Public Arbitrator

The SEC approved amendments to the definition of non-public arbitrator in the Customer and Industry Codes of Arbitration Procedure. The amended definition provides that a non-public arbitrator is a person who is otherwise qualified to serve as an arbitrator, and is disqualified from service as a public arbitrator under the Codes. The amendments became effective on October 9, 2017.

•  FINRA Regulatory Notice 17-29 (October 2017):  SEC Approves Amendments to Arbitration Codes to Revise the Definition of Non-Public Arbitrator

 

Motions to Dismiss In Arbitration

The SEC approved amendments to FINRA Rules 12504 and 13504 (Motions to Dismiss) of the Customer and Industry Codes of Arbitration Procedure (Codes) to add an additional ground for arbitrators to act on motions to dismiss prior to the conclusion of the claimant’s case in chief. The new ground provides that arbitrators may act upon a motion to dismiss a party or claim prior to the conclusion of a party’s case in chief if the arbitrators determine that the non-moving party previously brought a claim regarding the same dispute against the same party, and the dispute was fully and finally adjudicated on the merits and memorialized in an order, judgment, award or decision. The amendments are effective for motions to dismiss filed on or after January 23, 2017.

•  FINRA Regulatory Notice 17-02 (January 2017):  SEC Approves Amendments to the Codes of Arbitration Procedure Regarding Motions to Dismiss

 

Dispute Resolution Party Portal

The SEC approved amendments to the Customer and Industry Codes of Arbitration Procedure to require all parties, except customers who are not represented by an attorney or other person, to use the FINRA Office of Dispute Resolution’s Party Portal to file initial statements of claim and to file and serve most pleadings and other documents on FINRA or any other party. FINRA is also amending the Code of Mediation Procedure to permit mediation parties to agree to use the Party Portal to submit and retrieve all documents and other communications. The amendments are effective for all cases filed on or after April 3, 2017.

FINRA Regulatory Notice 17-03 (January 2017):  SEC Approves Amendments to the Customer and Industry Codes of Arbitration Procedure Regarding Required Use of the Dispute Resolution Party Portal.

Sanctions Guidelines

FINRA Revises the Sanction Guidelines

FINRA is revising its Sanction Guidelines to instruct adjudicators in the disciplinary process to consider customer-initiated arbitrations that result in adverse arbitration awards or settlements when assessing sanctions. Thus, when a respondent’s disciplinary history, and history of arbitration awards and arbitration settlements together with the violation found in a disciplinary case, form a pattern, the Sanction Guidelines advise that adjudicators should consider imposing more stringent sanctions. The revisions took effect for all complaints filed in FINRA’s disciplinary system beginning on June 1, 2018.

Regulatory Notice 18-17 (May 2, 2018): FINRA Revises the Sanction Guidelines

• FINRA Regulatory Notice 17-13 (April 2017):  FINRA's NAC Revises the Sanctions Guidelines