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FINRA recently authorized filing with the SEC two proposed amendments to rules from the Code of Arbitration Procedure for Customer Disputes and Industry Disputes. The rules affect chairperson eligibility in arbitration and the arbitrator panel selection process.
FINRA authorized filing with the SEC amendments to Rules 12400 and 13400 to revise the arbitration forum chairperson eligibility requirements. Specifically, an attorney arbitrator would be eligible for the chairperson roster if he or she completes chairperson training and serves as an arbitrator through award on at least one arbitration. The current rule requires serving as an arbitrator through award on at least two arbitrations.
The second amendment FINRA authorized filing with the SEC affects Rule 12403 for cases with three arbitrators. The proposed amendment would increase the number of public arbitrators on the list that FINRA sends parties during the panel selection process. FINRA would increase the number of public arbitrators from 10 to 15. There would also be an increase in the number of strikes to the public list from four to six, to keep the proportion of strikes the same under the amended rule as it is under the current rule.
Both of these proposed rule amendments are critical to ensuring that the parties are afforded qualified arbitrators. Allowing more attorney arbitrators the ability to join the chairperson roster will hopefully strengthen the quality of future panels. Increasing the number of arbitrators available on the public list will also provide parties with a greater opportunity to select the most qualified arbitrators. We encourage our clients to support these new amendments as the SEC considers them over the next several weeks.