What Happens After the Claim is Filed?

Once the Statement of Claim has been is received, the Director will send it to the opposing party (the "respondent"). Any member (e.g., brokerage houses) of an SRO listed in the services directory may be a party in an arbitration proceeding. Similarly, an employee and/or representative of any such member also may be named as a party.

 

Generally, following the receipt of the claim, the respondent has 20 calendar days in the case of a small-claim arbitration and 20 business days in all other arbitrations to provide an answer, unless an extension of time has been granted by the Director. It is within the discretion of the Director to grant such extensions even over the objection of a party. However, the Director will consider the objection when determining the length of the extension. Remember to review the rules of the sponsoring organizations for the time to serve and file answers, and for the procedure in granting extensions of time to answer.

 

Under NASD rules, respondents in non-small claim customer cases have 45 calendar days from the receipt of a claim to serve and file answers. Although a claimant may agree to a respondent's request to extend the time to answer, the Director will only grant such extensions in extraordinary circumstances.

 

The respondent may assert a related counterclaim as part of its answer, or may file a claim against a third party; that is, a claim against another person who may bear responsibility for any of the alleged damages. Generally, a claim is considered to be related if it pertains to the customer's account at the broker/dealer. In support of its defense or counterclaim, the respondent should attach copies of documents and supporting materials to its answer.

 

The respondent also should send to each party an executed Submission Agreement and a copy of the respondent's answer and any counterclaim. The respondent's executed Submission Agreement and answer shall also be filed with the Director, with additional copies for the arbitrator(s) along with any deposit required under the Schedule of Fees. On receipt of an answer containing a counterclaim, the claimant has 10 calendar days in the case of a small-claim arbitration and 10 business days in all other arbitrations to file a reply to any counterclaim. The claimant also should send to each party a copy of the reply to a counterclaim. The reply also shall be filed with the Director with additional copies for the arbitrators.

 

Service on a party may be effected by mail or other means of delivery. Filing with the Director must be made on the same date and, should be by the same means as service on a party.