FINRA—the arbitral panel under the Customer Code
FINRA—the arbitral panel under the Customer Code

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

  • FINRA—the arbitral panel under the Customer Code
  • Appointing panels
  • Arbitrator selection process
  • Additional parties
  • Disclosure by arbitrators
  • Removal of arbitrators
  • Replacement of arbitrators

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 covers matters relating to the arbitral panel (or simply the panel) under the Customer Code. For information on the panel under the Industry Code, see Practice Note: FINRA—the arbitral panel under the Industry Code.

Appointing panels

The process for the appointment and removal of arbitrators is set out at the Customer Code, Pt IV. The Customer Code, Pt IV defines the process of selecting arbitrators, an arbitrator’s duty of disclosure and how an appointment may be challenged. It also deals with the jurisdiction and authority of arbitrators.

Number of arbitrators

FINRA arbitrations are adjudicated