FINRA's all public panel option is now available in all customer cases

Abstract

Purpose

The purpose of this paper is to explain the rule changes contained in the new SEC Rules 12402 and 12403, which now allow claimants to choose an arbitration panel made up entirely of public administrators.

Design/methodology/approach

This paper explains the background, including concern about industry arbitrators in three‐person panels and the Public Administrator Pilot Program; details how three‐arbitrator panels will be selected under the new rule; and assesses the consequences of the new rule.

Practical implications

Among the likely consequences of the new rule are some cases going forward without industry arbitrators and an increase in the selection of chair‐qualified arbitrators; among the risks are the occasional need for a randomly appointed “cram down” arbitrator.

Originality/value

This paper provides practical guidance from experienced financial services attorneys.

Citation

Ward, B.M. (2011), "FINRA's all public panel option is now available in all customer cases", Journal of Investment Compliance, Vol. 12 No. 2, pp. 16-18. https://doi.org/10.1108/15285811111142874