Exam Alert: FINRA Revises Public, Non-public Arbitrator Standards

Effective June 26, 2015, FINRA will alter its rules regarding who will be consider a public or non-public arbitrator. The change will make it so that any arbitrator who has worked in the financial industry for any period of time will be considered a non-public arbitrator. Also, arbitrators who represent investors or the financial industry as a significant part of their business will be considered non-public arbitrators, but may become public arbitrators after a cooling-off period. Continue reading

Exam AlertEffective June 26, 2015, FINRA will alter its rules regarding who will be considered a public or non-public arbitrator. The change will make it so that any arbitrator who has worked in the financial industry for any period of time will be considered a non-public arbitrator. Also, arbitrators who represent investors or the financial industry as a significant part of their business will be considered non-public arbitrators, but may become public arbitrators after a cooling-off period. The cooling-off period lasts five years if they were disqualified from being a public arbitrator based on their own actions. The cooling-off period lasts two years if they were disqualified from being a public arbitrator based on someone else’s actions.

Source: SEC Approves Amendments to Arbitration Codes to Revise the Definitions of Non-Public and Public Arbitrator

This alert applies to the Series 6, Series 7, Series 24, Series 26, Series 27, Series 28, Series 62, Series 79, and Series 82.

Exam Alert: FINRA revises who can qualify as “public arbitrators”

Effective July 1, 2013, FINRA will revise its arbitration rules to impose additional limits on who may be considered a public arbitrator. Continue reading

Effective July 1, 2013, FINRA will revise its arbitration rules to impose additional limits on who may be considered a public arbitrator. The changes prohibit people associated with mutual funds or hedge funds from serving as public arbitrators. The changes also require individuals to wait for at least two years after ending certain affiliations before they are considered public arbitrators.

Source: FINRA Regulatory Notice 13-21: SEC Approves Amendments to Arbitration Codes to Revise the Definition of Public Arbitrator

This alert applies to the Series 6, Series 7, Series 24, Series 26, Series 62, Series 79, and Series 82.

Exam Alert: FINRA prohibits collective action claims from being arbitrated under its Code

Effective July 9, 2012, FINRA will modify its arbitration rules to explicitly state that collective action claims brought under the Fair Labor Standards Act (FLSA), the Age Discrimination in Employment Act (ADEA), or the Equal Pay Act of 1963 (EPA) may not be arbitrated under FINRA’s Code of Arbitration for Industry Disputes. Continue reading

Effective July 9, 2012, FINRA will modify its arbitration rules to explicitly state that collective action claims brought under the Fair Labor Standards Act (FLSA), the Age Discrimination in Employment Act (ADEA), or the Equal Pay Act of 1963 (EPA) may not be arbitrated under FINRA’s Code of Arbitration for Industry Disputes.  The rule had already prohibited arbitration of class action claims under the Code – this change makes it clear that this prohibition extends to the specified collective action claims as well.

Other rules of procedure were added that govern the determination of whether a specific dispute is a collective claim, and thus not subject to arbitration.  These rules are similar to the existing rules for determining whether a dispute is a class action claim.  These rules include:

-Someone who opts in to a collective action claim cannot settle the same dispute using arbitration.

-If there is a disagreement over whether a claim is part of a collective action, a panel will review the issue.

-Members and associated persons may not enforce arbitration agreements against members of certified or putative collective actions in relation to any of the claims covered by the collective actions.

 

Source: FINRA Regulatory Notice 12-28

This alert applies to the Series 79, Series 62, Series 24, Series 82, Series 7, Series 26, and Series 6.