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FINRA Approves Proposed Rule Changes to Arbitration for Submission to SEC

The Doss Firm

On April 19, 2013, the FINRA Board of Governors approved several proposed rule changes that now will be submitted to the SEC for review and approval. Two that center on the FINRA arbitration process are detailed below:

First, the Board authorized FINRA to file with the SEC proposed amendments to FINRA Rule 12403 which would simplify securities arbitration panel selection rules. The proposed rule would allow all parties to see lists of 10 chair-qualified public arbitrators, 10 public arbitrators, and 10 non-public arbitrators. Furthermore, the proposed rule would permit four strikes on each of arbitrator list. Also, a party could select an all-public arbitration panel by striking all of the arbitrators on the non-public list or instead, if the parties leave on the non-public list one or more of the same non-public arbitrators, the parties could have a majority public panel.

Secondly, the Board authorized FINRA to file with the SEC proposed amendments to the Discovery Guide. The proposed amendments would provide general guidance on e-discovery issues and product cases, and clarify existing provisions relating to affirmations. The proposed amendments would cause the Discovery Guide to:
“1. Include guidelines for arbitrators to consider when deciding disputes relating to the form of e-discovery;
2. Add guidance on product cases to explain, among other matters, that these cases are different from other customer cases and that the Document Production Lists may not provide all of the documents parties usually request in a product case; and 3. Clarify that a party may request an affirmation when an opposing party makes a partial production.”

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