FINRA notified member firms that the SEC approved its proposed amendments to FINRA Rule 12403 of the Code of Arbitration Procedure for Customer Disputes. The amendments increase the number of arbitrators on the public arbitrator list that FINRA sends to parties during the arbitration panel selection process from 10 to 15. The amendments also increase the number of strikes to the public arbitrator list from four to six, so that the proportion of strikes is the same under the amended rule as it is under the current rule.
FINRA rules allow parties to choose three arbitrators in customer cases (which tend to be disputes in which claims (i) involve damages that exceed $100,000, or (ii) do not involve monetary damages). Parties select arbitrators by ranking and striking them on computer-generated lists provided by FINRA.
The amendments will become effective for all arbitrator lists that FINRA sends to parties on or after January 3, 2017 for panel selection in customer cases with three arbitrators.
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