FINRA - Arbitration & Mediation - Arbitration Procedures

Statement of Claim - File with the Director a typewritten or printed document stating the claim. This document should set forth the details of the dispute, including all relevant dates and names, in a clear, concise, and chronological fashion and should conclude by indicating what relief (e.g., money damages in a specific amount, performance of a particular agreement, interest, etc.) is requested. The claimant should attach copies of documents and supporting materials as exhibits to the Statement of Claim. The claimant should provide sufficient copies for each party, the arbitrators, and the SRO.
Small-Claims Procedures - If the amount of the claim is $25,000 or less (at some SROs $10,000 or less), the claim will be processed under the Simplified Arbitration Procedures. In customer disputes, unless the customer requests a hearing, the claim will be decided solely on the basis of the parties' written submissions. The arbitrator, however, also may request a hearing or require a party to submit additional documentation. Parties may ask to submit additional documents to an arbitrator who is deciding the case without a hearing.
Service of Pleadings - After the initial Statement of Claim is served by the Director, it is each party's responsibility to provide every other party directly with any further pleadings, motions, or correspondence. In addition, it is each party's responsibility to simultaneously provide sufficient copies directly to the sponsoring SRO for the arbitrators and its files. Service of the filings and correspondence on the sponsoring SRO and the other parties should be made on the same date and by the same means (i.e., via overnight mail, facsimile, etc.)
Counsel - State whether the claimant will be represented by an attorney and, if so, the attorney's name, address, and telephone number.
Location - State where the claimant wants the case to be heard and the reasons for that choice. The decision as to the location of the initial hearing is made by the Director. Consideration generally will be given to a number of factors, including the convenience of the parties, the availability of necessary records or witnesses, and the availability of qualified arbitrators. In customer cases, the hearing will generally be in a major urban area near where the customer resided when the dispute arose unless the parties agree to a different location after the case is filed.
Complex Cases - In appropriate cases, parties may request special services such as mediation, findings of facts and conclusions of law, expedited hearings, and the appointment of arbitrators with special qualifications. Parties seeking special or additional services should advise the sponsoring SRO at the earliest time possible. Additional fees may be charged for these services. In many complex cases, the parties may desire block scheduling of hearing dates. To the greatest extent possible, such cases will be scheduled in three-day blocks.
Arbitrators - The proposed panel will be composed of a majority of persons from outside the securities industry. If a customer would like a panel consisting of a majority of arbitrators from the securities industry, he or she should indicate that preference in writing when filing the claim.
Submission Agreement - Complete and return three signed copies of the Uniform Submission Agreement provided by the sponsoring organization. The claimant should provide sufficient copies for each party, the arbitrators, and the SRO. The SROs may vary in their requirements for notarization of signatures. Check with your SRO for specific guidance. By signing the Uniform Submission Agreement, the claimant agrees to submit the dispute to arbitration and to abide by the decision (the "award") of the arbitrators. The claimant also agrees to be bound by the decision of the arbitrators with regard to any counterclaim (a claim against the claimant) permitted under these procedures that may be brought by an opposing party. Once a Uniform Submission Agreement has been signed, the procedures and timing set out in the Uniform Code become operative and binding. Generally, parties may not withdraw the Uniform Submission Agreement and Claim without the consent of either the other parties or the arbitrators.
Filing Fees and Deposits - Include a check or money order made payable to the sponsoring organization for the appropriate non-refundable filing fee and hearing session deposit. Where multiple hearing sessions are scheduled or conducted the arbitrators are authorized to require additional hearing session deposits by one or more parties. Additional deposits also may be required to be made for prehearing conferences with an arbitrator and for the postponement of a scheduled hearing date after the arbitrators have been selected. The arbitrators will determine in the final award if these deposits will be returned or assessed to another party. See the arbitration rules of the sponsoring SRO for the definition of a hearing session, as well as the appropriate fee and deposit.
Disclosure of Arbitration Award - At some sponsoring organizations, customers must state in writing whether they either permit or decline to permit the inclusion of their names in the public version of the award. Check with your SRO for specific guidance.
Incomplete Filing of a Claim - A filing may be returned if it does not comport with the rules. The Statement of Claim, with exhibits, Uniform Submission Agreement, and non-refundable filing fee and hearing session deposit should be submitted to the Director of the sponsoring organization at the address listed at the end of this pamphlet. All pleadings, correspondence, and exhibits after the claim is served must be sent to all parties directly with sufficient additional copies sent to the Director for the arbitrators and for the sponsoring organization.

Arbitration

How is Arbitration Begun?