New FINRA Arbitrator Rules Take Effect July 1


FINRA’s new rules for arbitrators will take effect on July 1, 2013.

The amendments change the definition of “public arbitrator” to exclude persons associated with a mutual fund or hedge fund from serving in the role. The new rules also require individuals to wait for two years after ending certain affiliations before FINRA may permit them to serve as public arbitrators.

FINRA classifies arbitrators under the Customer and Industry Codes of Arbitration Procedure as either “non-public” or “public.” Non-public arbitrators are affiliated with the securities industry either through their current or former employment in a securities business, or because they provide professional services to securities businesses. Meanwhile, public arbitrators do not have any significant affiliation with the securities industry.

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Published In: Business Organization Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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