The SEC approved amendments to FINRA’s customer and industry arbitration rules to charge parties who request cancellation of a prehearing conference within three business days of the prehearing conference a $100 per-arbitrator fee. The amendment also provides for a $100 honorarium to each arbitrator scheduled to attend the cancelled prehearing conference. The fee applies even…
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The SEC recently approved a rule amendment to create an intermediate form of adjudication for small claims. The proposal amends Rules 12600 and 12800 of the FINRA Code of Arbitration Procedure for Customer Disputes and Rules 13600 and 13800 of the FINRA Code of Arbitration Procedure for Industry Disputes. The amendments provide parties with claims…
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FINRA is requesting comment on proposed amendments to the Firm and Associated Persons Document Production List and Discovery Guide. The proposed amendments to the Discovery Guide require firms and associated persons, upon request, to produce documents concerning third-party insurance coverage in a customer arbitration proceeding. These proposed amendments would strictly limit the circumstances under which…
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On June 14, 2018, FINRA announced details of a multi-phased effort to overhaul its registration and disclosure programs, including the Central Registration Depository (CRD). FINRA operates the CRD for the U.S. securities industry and its regulators and it provides the backbone of BrokerCheck. These changes are being made in response to feedback FINRA received through…
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Beginning on July 9, 2018, FINRA is enhancing its disclosure review process to enable it to conduct a public records search of information relating to bankruptcies, judgments and liens, within fifteen calendar days from the date of an applicant’s Form U4. These enhancements will allow FINRA to verify the accuracy and completeness of an applicants’…
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FINRA revised its Sanction Guidelines to instruct adjudicators in the disciplinary process to consider customer-initiated arbitrations that result in adverse arbitration awards or settlements when assessing sanctions. As a result, when a Respondent’s disciplinary history, and history of arbitration awards and arbitration settlements, together with the violation found in a disciplinary case, form a pattern,…
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On March 15, 2018, the 5th U.S. Circuit Court of Appeals in New Orleans voided the U.S. Department of Labor’s “fiduciary rule” adopted by the Obama administration in 2016 as a means to limit and reduce conflicts of interest among financial advisors providing retirement planning advice. The majority found in the case, Chamber of Commerce…
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FINRA launched a retrospective review of its outside business activities and private securities transactions rules in May of 2017 to assess their effectiveness and efficiency. This request for comment stems from that review of FINRA Rule 3270 (Outside Business Activities of Registered Persons) and FINRA Rule 3280 (Private Securities Transactions of an Associated Person). The…
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Arbitration case filings through December 2017 reflected a 6 percent decrease compared to cases filed in 2016 during the same time frame. More specifically, 3,681 cases were filed in 2016, but 3,456 cases were filed in 2017. Of the 3,456 cases filed, 65 percent or 2,260 were customer disputes and 35 percent or 1,196 were…
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FINRA released its annual list of Regulatory and Examination Priorities for 2018. FINRA will continue its focus on high-risk and recidivist brokers in terms of rulemaking initiatives and examinations. This year’s priority includes strengthening the current operation, while becoming more efficient. The focus on senior and unsophisticated investors, which was highlighted in years past,…
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