FINRA—procedure under the Customer Code
FINRA—procedure under the Customer Code

The following Arbitration guidance note provides comprehensive and up to date legal information covering:

  • FINRA—procedure under the Customer Code
  • Investor claims
  • Pre-action considerations
  • General procedural provisions
  • Procedure

The Financial Industry Regulatory Authority (FINRA) is an independent regulatory body overseeing the US securities industry. As part of its role, FINRA operates the largest dispute resolution body in the securities industry. It works to resolve monetary and business disputes between investors, brokerage firms and individual brokers, as well as disputes between and among brokerage firms and individual brokers.

The disputes are dealt with using FINRA’s own arbitration procedure. FINRA has two Codes of Arbitration Procedure:

  1. the Code of Arbitration Procedure for Customer Disputes (the Customer Code or Section 12000 of the FINRA Rules)—which governs arbitration proceedings between investors and industry parties, and

  2. the Code of Arbitration Procedure for Industry Disputes (the Industry Code or Section 13000 of the FINRA Rules)—which governs arbitration proceedings between industry parties

This note concerns the Customer Code only. For procedure under the Industry Code, see Practice Note: FINRA—procedure under the Industry Code.

Investor claims

The Customer Code provides a comprehensive structure for the arbitral process, including the procedure for the commencement and conduct of arbitration proceedings, the procedure for the appointment of arbitrators and provisions for making awards and awarding costs.

Pre-action considerations

Limitation period

Under the Customer Code, Pt II, r 12206, a claim must be brought within six years of the occurrence or event giving rise to the claim. This rule does not