FINRA filed with the SEC a proposed rule change that would amend FINRA's arbitration procedures to provide an additional hearing option for parties with claims involving $50,000 or less.
Arbitration cases with claims involving $50,000 or less are currently administered through either (i) a single arbitrator providing a decision based on parties' pleadings and other materials submitted by parties or (ii) a full hearing, conducted in-person, with no limit on the number of hearing sessions that may be conducted. Under the proposed rule change, FINRA would offer an intermediate option to parties with claims involving $50,000 or less to argue their cases before an arbitrator in a shorter, limited hearing format conducted via telephone. The telephonic hearing would be limited to two sessions, and there would be time limits placed on the hearings.
According to FINRA, the proposed option would limit the cost and time burdens for participants while providing the claimant with personal contact with an arbitrator deciding the case. It would also give each party the opportunity to argue its case, ask questions and respond to contentions from the other parties.
The proposed rule change would affect both the Customer Code and Industry Code of Arbitration Procedure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
