Optional All Public Panel Rules

On January 31, 2011, the United States Securities and Exchange Commission (SEC) approved a rule change to provide customers in cases that proceed with three arbitrators the option to choose whether their case would be decided by three public arbitrators. On September 18, 2013, the SEC approved a modification to the rule to simplify arbitration selection in cases with three arbitrators. Under this rule change, FINRA will send the parties three lists – i.e., one with 10 chair-qualified public arbitrators, one with 10 public arbitrators, and one with 10 non-public arbitrators. FINRA would permit the parties to strike up to four arbitrators on the chair-qualified public list and up to four arbitrators on 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.

 

If individually, or collectively, the parties strike all of the non-public arbitrators, FINRA will not appoint a non-public arbitrator to the case. 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 the Neutral List Selection System (NLSS).

 

New Rule Effectiveness
The new rule will apply to all customer cases requiring a three arbitrator panel in which arbitrator lists have not been sent as of September 30, 2013.