The Financial Industry Regulatory Authority (“FINRA”) has requested public comment regarding two proposed amendments to the organization’s arbitration rules. Regulatory Notice 17-33 relates to “Amendments to the Code of Arbitration Procedure for Customer Disputes to Expand the Options Available to Customers if a Firm or Associated Person Is or Becomes Inactive,” and Regulatory Notice 17-34 addresses “Non-Attorney Representatives in Arbitration.”
When respondents are no longer in business, recovery of arbitration awards against them often is unavailing. Accordingly, FINRA is proposing to amend the Code of Arbitration Procedure for Customer Disputes (Code) to expand a customer’s options to withdraw an arbitration claim if a firm or an associated person becomes inactive before a claim is filed or during a pending arbitration. In addition, the proposed amendments would allow customers to amend pleadings, postpone hearings and receive a refund of filing fees under these situations.
The FINRA Codes of Arbitration and Mediation Procedure permit compensated non-attorneys to represent clients in securities arbitration and mediation subject to certain exceptions. FINRA is conducting a review of the efficacy of continuing to allow such representation. The Notice outlines FINRA’s review of compensated non-attorney representatives’ (NAR firms) activities at the forum and seeks responses to questions related to forum users’ experiences with NAR firms.
The full text of each proposed amendment is available on FINRA’s website. The public comment period for both proposals expires on December 18th. Comments may be submitted in hard copy or via email.