FINRA—the award under the Customer Code and the Industry Code
FINRA—the award under the Customer Code and the Industry Code

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

  • FINRA—the award under the Customer Code and the Industry Code
  • Investor claims and industry disputes
  • Collecting an award or settlement
  • Failure to pay an award
  • Challenges to an award

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 costs under both Codes.

Investor claims and industry disputes

The Customer Code, Pt IX, r 12904 and the Industry Code, Pt IX, r 13904 govern the process of rendering an award. Awards must be made in writing and may contain a rationale underlying the award but arbitrators are not required to include opinions, explanations or reasons for their decision. Where the proceedings were heard by a three-person panel, the award will be based on the majority decision of the arbitrators so a unanimous decision is not required.

If the parties wish to obtain