FINRA proposes to change the arbitration panel composition rules by providing customers with the option to choose an all public arbitration panel in all cases.  For customer claims of more than $100,000, the Code of Arbitration Procedures for Customer Disputes currently provides for a 3-arbitrator panel comprising a chair-qualified public arbitrator, a 2nd public arbitrator, and a non-public (industry) arbitrator.  The parties select their panel through a process of striking and ranking the arbitrators on lists generated by FINRA DR, or Dispute Resolution.

    As Proposed.   FINRA would amend the Customer Code to provide customers with the option to choose between 2 panel selection methods:  (i) the current panel selection method (“Majority Public Panel”), and a new panel selection method (“Optional All Public Panel”).  As proposed, customers could choose the panel selection method with no input from firms or associated persons.

N.B.  The proposed rule change would apply only to customer disputes. Not To disputes involving only industry parties.

    FINRA's 2-Year Public Arbitrator Pilot Program.   This program recently concluded and involved up to 14 firms - all voluntary participant.  Customer reps expressed strong support for the program, which leads FINRA to propose amending the panel composition rule for ALL customer cases involving ANY FIRM OR ASSOCIATED PERSON, to allow the customer party to choose between the current panel selection method and the method used in the Pilot. 

Get further details - click onto:   [ FINRA Rule Filing 10-53, 10/26 ]