SEC approves FINRA's overhaul of its Discovery Guide

Abstract

Purpose

The purpose of this paper is to explain FINRA's recent overhaul of the Discovery Guide for arbitrations.

Design/methodology/approach

THe paper explains the new Discovery Guide, the consolidated document production lists, and FINRA's modification of the scope of documents that are to be exchanged by the parties in customer cases, particularly with regard to requiring the production of electronic records.

Findings

FINRA's new rule consolidates the lists of presumptively discoverable documents and modifies the scope of documents that are to be exchanged by the parties in customer cases, particularly with regard to requiring the production of electronic records. The new Discovery Guide expands many of the categories of documents deemed to be, presumptively, discoverable for both respondents and claimants in arbitration.

Practical implications

Parties will be forced to re‐visit the types of documents that are presumptively exchanged in a FINRA arbitration. The new Discovery Guide requires parties to exchange electronic records and new categories of documents that were not presumptively discoverable under the prior Discovery Guide. As a result, Firms should consider re‐evaluating their processes for collecting standard documents when defending FINRA arbitration claims.

Originality/value

The paper presents practical guidance from experienced financial services lawyers.

Citation

Lawrence Polk, S. and Stadler, A. (2011), "SEC approves FINRA's overhaul of its Discovery Guide", Journal of Investment Compliance, Vol. 12 No. 3, pp. 30-32. https://doi.org/10.1108/15285811111172277