[ by Howard Haykin ] FINRA has amended the mediator selection process, that's governed by FINRA Rule 14107 (Mediator Selection) of the Mediation Code.  As amended, the rule will provide that the Mediation Director will be given discretion to determine whether parties to a FINRA mediation may select a mediator who is not on FINRA’s mediator roster.  The rule change is scheduled to go into effect on 8/6/12 - i.e., the change applies to all mediation cases filed on or after the effective date. Background & Discussion. The Mediation Code permits parties to a mediation to select a mediator either from a list of FINRA mediators supplied by the Mediation director, or from a list or other source of their own choosing.  In limited instances, the Mediation director assigns the mediator.  Although  parties usually select a FINRA mediator, under the current provision, parties may select a mediator who is not on FINRA’s roster. While FINRA carefully screens every applicant who seeks to become a FINRA mediator, which includes a background check as well as periodic evaluations (after that person has begun service as a FINRA mediator.  The same cannot be said of Non-FINRA mediators, which is a concern to FINRA. FINRA has responded to these concerns by amending FINRA Rule 14107(a) to provide the Mediation director with additional authority - i.e., discretion to determine whether parties to a FINRA mediation may select a mediator who is not on FINRA’s mediator roster. As the amended rule reads, if the parties select a non-FINRA mediator who is willing to apply to be a FINRA mediator, and the staff believes that the mediation program would benefit by adding the mediator to the roster, then the Mediation director may permit the mediator to serve on the case.  The change is intended to protect the quality and integrity of the process for users of its mediation forum. If the Mediation director should reject a non-FINRA mediator, the parties have alternatives - they may:

• select a FINRA-approved mediator;
• select a different non-FINRA mediator subject to the same conditions as the rejected mediator; or
• mediate their dispute elsewhere.

Another amendment to FINRA Rule 14107(c), ... pertains to the current requirement that a mediator selected or assigned to a FINRA case, must comply with FINRA rules relating to disclosures required of arbitrators unless, with respect to a mediator selected from a source other than a list provided by FINRA, the parties elect to waive such disclosure. FINRA has amended that provision to state that it the requirement applies to a non-FINRA mediator, regardless of what the parties may say or choose. Again, these amendments go into effect for all mediation cases filed on or after 8/6/12. FINRA Staff Contacts. Direct questions to:  Kenneth Andrichik, SVP, Chief Counsel, Director of Mediation and Strategy, Dispute Resolution  --  (212) 858-3915 or  ken.andrichik@finra.org; or   Julie Crotty, Deputy Director of Mediation and Business Strategies, Dispute Resolution  --  (212) 858-4341 or julie.crotty@finra.org. For further details, go to:   [FINRA RegNote 12-35, July 2012].