New Rules Give Customers Option of All Public Arbitration Panels


The Securities and Exchange Commission approved amendments to FINRA’s rules on January 31, 2011, that will provide customers in all FINRA arbitrations an option of selecting a panel comprised entirely of public arbitrators to serve in customer dispute cases.  Historically, in cases with three arbitrators, the panels have been comprised of two public arbitrators and one arbitrator with a connection to the securities industry.  Under the new rules, customers now have the option of having a panel comprised of all public arbitrators.  Customers electing to use the all-public option must affirmatively select the all-public option instead of the majority public option within 35 days of service of the Statement of Claim.  The new FINRA rules are effective immediately and apply to all customer cases requiring a three-arbitrator panel in which arbitrator lists have not been sent as of January 31, 2011.  Additional details regarding the new rules are available in FINRA’s Notice to Members.

Related Information

For additional information relating to these new FINRA rules, also see:

SEC Approval Order
FINRA Press Release and Notice to Members
FINRA Rules 12402 and 12403

The Office of Investor Education and Advocacy has provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.

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