FINRA - Arbitration & Mediation - Arbitration Procedures

Although most business in the securities industry is completed without a problem, disputes and controversies will occasionally arise. Such disputes and controversies can be resolved by impartial arbitration at one of the organizations listed in the services directory. Arbitrations are conducted in accordance with the Uniform Code of Arbitration (Uniform Code or UCA) as developed by the Securities Industry Conference on Arbitration (SICA) and the rules of the sponsoring organization where the claim is filed.

There are some differences among the rules of the sponsoring organizations, such as, the time to serve and file answers to claims, who may serve as public arbitrators, arbitrator selection methods, service of award methods, the availability of prior awards, and whether your name will be made publicly available. Any questions regarding arbitration may be addressed to the Directors of Arbitration or their staff at the sponsoring organizations. Significant differences between the Uniform Code and the procedures of the self-regulatory organizations (SROs) will be highlighted in this guide.

In addition to initiating an arbitration, investors may file their complaints with the appropriate regulatory authorities, such as the Securities and Exchange Commission (SEC), state securities commissions, or one of the SROs listed in the Services Directory, when they believe there has been fraud or that other investors may be at risk. The regulatory agencies may then investigate the complaint and, if warranted, censure, fine, or suspend a wrongdoer. These agencies normally do not recover investor's losses which can be done through arbitration.

This information is designed to assist prospective parties and their attorneys by explaining arbitration procedures and is not designed to give legal advice to any party or to anyone who contemplates use of these procedures. The procedures were developed for parties who represent themselves in an arbitration proceeding as well as those represented by counsel. The information here explains the procedures set forth in the rules and answers questions regarding them but is not an interpretation of, or a substitute for, the rules. We recommend that prospective parties carefully read the rules.