FINRA has amended the Customer and Industry Codes of Arbitration Procedures to provide a moving party - the party that makes the original motion in an arbitration - with a 5-day period to reply to a response to a motion.   This 5-day period gives parties an opportunity to brief fully the issues in dispute, and ensures that arbitrators deciding a motion have all the motion papers before issuing a final decision.  

The amendments to the Codes are effective on 6/6/11, and apply to motions in all cases.

The Codes specify time periods for a party to respond to a motion, including a motion to dismiss.  They do not, however, provide expressly for a moving party to reply to a response.  FINRA staff observed that occasionally, the moving party submitted a reply to a response.  FINRA’s practice had been to forward the reply to the arbitrators, even when FINRA receives the reply after it has already sent the motion and response to the arbitrators. 

Since the Codes don't prescribe a time period for replying to responses to motions, there have been instances where arbitrators reviewed the motion papers and even ruled on a motion before receiving a moving party’s reply.  On 6/2/10, FINRA revised its practice relating to replies to responses to motions and published Notice to Parties - Time to Reply to Objections on its website, stating that moving parties have five calendar days from receipt of a response to a motion to submit a reply to the response.

    Affected FINRA Rules.   FINRA amended Rules 12206 and 13206, Time Limits, Rules 12503 and 13503, Motions, and Rules 12504 and 13504, Motions to Dismiss, to provide a moving party with a 5-day period to reply to a response to a motion.  The amendments codify FINRA’s current practice, as outlined in the Notice to Parties, and make it transparent.  The amendments also provide parties with an opportunity to brief fully the issues in dispute, and ensure that arbitrators have all of the motion papers before issuing a final decision on the motion.

    FINRA Staff Contacts:   Direct questions to:    (i) Richard Berry, SVP, Director of Case Administration and Regional Office Services, Dispute Resolution (DR) - (212) 858-4307;  richard.berry@finra.org;  or, (ii) Margo Hassan, Asst Chief Counsel, DR - (212) 858-4481;  margo.hassan@finra.org.   For further details, go to:  [FINRA RegNote 11-23, May 2011]