Arbitrator Selection

The number of arbitrators appointed to a case depends on the amount and type of relief requested in the Statement of Claim.

 

For claims of $50,000 or less, FINRA will appoint one arbitrator and the claim will be subject to the simplified arbitration procedures. (For more information on these claims, view the "Simplified Arbitrations" section.)  The remainder of the discussion focuses on claims of more than $50,000.
 
Generally, for claims of more than $50,000 up to $100,000, the parties will select and FINRA will appoint one arbitrator, unless the parties agree in writing to three arbitrators.  For claims of more than $100,000, the parties will select and FINRA will appoint three arbitrators. 

 

FINRA uses the Neutral List Selection System (NLSS) to generate randomly lists of arbitrators from FINRA's arbitrator rosters to appoint a panel. Generally, the arbitrator selection process begins after the answer is due, regardless of whether the respondent answers a claim. After the answer is due, FINRA will use the NLSS to generate list(s) of arbitrators, which will include their background information, called arbitrator disclosure reports. FINRA will send the lists and arbitrator disclosure reports to the parties for their review. Parties will review the information, strike any arbitrators from the lists that they do not want on their panel, and rank the remaining choices. After parties have ranked their choices, they submit their ranked lists to FINRA. FINRA combines the parties' ranked lists and appoints the highest ranked available arbitrator from each list to serve on the panel.

 

Customer Code Rules 12400-12403 and 12800; Industry Code Rules 13400-13402 and 13800.

 

Investor Cases

 

Cases Decided by One Arbitrator

For claims of more than $50,000 up to $100,000, the arbitrator will be a public arbitrator selected from the public chairperson roster,  FINRA will send one list with 10 chair-qualified public arbitrators to each of the parties.  Each separately represented party may strike up to four arbitrators on the list, leaving at least six arbitrator names remaining on each party's list. In the event no ranked public chairpersons remain on the combined list, or if all remaining public chairpersons are not available to serve, FINRA will randomly appoint a public chairperson by using the NLSS.

 

Cases Decided by Three Arbitrators

For claims of more than $100,000 or for unspecified or non-monetary claims, the parties will select and FINRA will appoint three arbitrators. FINRA Rule 12403 allows any party to select an all public panel of arbitrators.

 

FINRA will send the parties three lists – one with 10 chair-qualified public arbitrators, one with 10 public arbitrators, and one with 10 non-public arbitrators. Each separately represented party may strike up to four arbitrators on each of the chair-qualified public list and up to four of the arbitrators from the public list, leaving at least six arbitrator names remaining on each party's lists. By striking all of the arbitrators on the non-public list, any party can ensure that the panel will have three public arbitrators. FINRA will not appoint a non-public arbitrator to the panel who has not been selected by the parties. Rather, FINRA will appoint the next highest ranked available public arbitrator to complete the panel. If none of the remaining arbitrators on the public list is available to serve, FINRA will appoint the next highest-ranked arbitrator appearing on the chair-qualified public list to complete the panel. If none of the remaining arbitrators on the chair-qualified public list is available to serve, FINRA will randomly appoint a public arbitrator using NLSS.

 

Customer Code Rules 12400-12401 and 12403

 

Industry Cases

For arbitration claims that involve only industry parties and that do not contain a statutory discrimination claim, the arbitrators are selected by the parties as follows:

 

Disputes Between Brokerage Firms

Cases Decided by One Arbitrator
For claims of more than $50,000 up to $100,000, the arbitrator will be a non-public arbitrator selected from the non-public chairperson roster, FINRA will send one list with 10 chair-qualified non-public arbitrators to each of the parties. Each separately represented party may strike up to four arbitrators on the list, leaving at least six arbitrator names remaining on each party's list. In the event no ranked non-public chairpersons remain on the combined list, or if all remaining non-public chairpersons are not available to serve, FINRA will randomly appoint a non-public chairperson by using the NLSS.


Cases Decided by Three Arbitrators

For claims of more than $100,000 for unspecified or non-monetary claims, the three arbitrators will be non-public arbitrators, one of whom will be selected from the non-public chairperson roster, FINRA will send two lists to each of the parties - one with 20 non-public arbitrators and one with 10 chair-qualified non-public arbitrators. Each separately represented party may strike up to eight arbitrators from the non-public arbitrator list, leaving 12 names remaining on the non-public list, and up to four from the chair-qualified non-public arbitrator list, leaving at least six names remaining on that list. In the event no ranked non-public arbitrators remain on the combined lists, or if all remaining non-public arbitrators are not available to serve, FINRA will randomly appoint one or more arbitrators of the required classification to complete the panel using the NLSS.

 

Disputes Between Brokers and Between or Among Brokerage Firms and Brokers

Cases Decided by One Arbitrator
For claims of more than $50,000 up to $100,000, the arbitrator will be a public arbitrator selected from the public chairperson roster, FINRA will send one list with 10 chair-qualified public arbitrators to each of the parties. Each separately represented party may strike up to four arbitrators on the list, leaving at least six arbitrator names remaining on each party's list. In the event no ranked public chairpersons remain on the combined list, or if all remaining public chairpersons are not available to serve, FINRA will randomly appoint a public chairperson by using the NLSS.

 

Cases Decided by Three Arbitrators

For claims of more than $100,000 for unspecified or non-monetary claims, FINRA will send three lists - one with 10 chair-qualified public arbitrators, one with 10 public arbitrators, and one with 10 non-public arbitrators. Each separately represented party may strike up to four arbitrators on each list, leaving at least six arbitrator names remaining on each party's lists. In the event no ranked arbitrators remain on the list of the required classification, or if all remaining arbitrators of the required classification are not available to serve, FINRA will randomly appoint an arbitrator of the required classification by using the NLSS.


Industry Code Rules: 13402-13406

 

Other Types of Intra-Industry Claims

For arbitration claims that involve only industry parties and that involve a statutory discrimination claim, promissory note proceedings, or permanent injunctive relief, please refer to the appropriate rule for the arbitrator selection rules: