To Help Maintain its Fair, Efficient Dispute Resolution System FINRA Needs Additional Qualified Arbitrators to Meet the Demands of its Increasing Caseload and Expanded Geographical Scope.

February 25, 2004


The success of arbitration depends on the quality of its arbitrators. If you qualify as a FINRA arbitrator, you will join a group of dedicated individuals serving the investing public and the securities industry. FINRA is sending this Member Alert because we are specifically looking to recruit arbitrator candidates who are active securities professionals in order to maintain a diverse balance of participants. FINRA Dispute Resolution is also interested in recruiting candidates from the public sector, such as accountants, attorneys, investors, or educators. If you know individuals outside the securities industry who might be willing to serve as public arbitrators, please share this Alert with them and encourage them to apply.


What Is FINRA Dispute Resolution?


FINRA Dispute Resolution operates the largest forum of dispute resolution for investors and firms in the securities markets in the United States, handling more than 90 percent of all securities arbitration claims filed by customers of brokerage firms, and brokerage firms and their employees.


What Is Arbitration At FINRA?


Arbitration is a dispute resolution mechanism designed to resolve disputes between investors and securities firms. FINRA arbitration is final and binding, subject to review by a court on very limited grounds. Generally, arbitration is faster, less expensive, and less formal than a state or federal lawsuit. FINRA currently maintains a roster of approximately 7,000 available arbitrators—conducting arbitrations in 51 hearing locations in the United States and abroad. However, the number of new arbitrations filed continues to increase dramatically—from 6,915 new cases in 2001 to 8,945 new cases in 2003. At the same time, FINRA intends to establish additional hearing locations in 2004-5 in the following states: Alabama, Iowa, Kansas, South Carolina, Delaware, Rhode Island, Idaho, Maine, Mississippi, Montana, North Dakota, South Dakota, New Hampshire, Vermont, West Virginia, and Wyoming. Faced with this challenge, FINRA needs to recruit and train qualified persons—from a variety of backgrounds, professions, and cultures—to serve as neutral arbitrators.


What Duties Does An Arbitrator Perform?


Arbitrators serve as decision makers, weighing the facts of each case presented. As an arbitrator, you will hear all sides of the issues as presented by the parties, study the evidence, and then decide how to resolve the matter. You will work in this capacity either as the sole arbitrator or as part of a three-person arbitration panel. FINRA arbitrators play an integral role in protecting market integrity and building investor confidence by maintaining a fair, impartial, and efficient system for the resolution of securities claims.


Who Are The Arbitrators?


FINRA Dispute Resolution relies on a roster of neutral, qualified arbitrators to help maintain its fair, impartial, and efficient system of dispute resolution. FINRA arbitrators are carefully selected from a broad cross-section of people, diverse in culture, profession, and background.


Disputes involving an investor require that a majority of the arbitrators be from outside the securities industry. Some intra-industry disputes require that all the arbitrators be from within the securities industry. Our goal is to recruit arbitrators from different backgrounds, such as educators, accountants, lawyers, business and securities professionals, and others. If you have at least five years of full-time, paid business or professional experience, you may qualify to serve on our roster.


What Are The Benefits Of Being A FINRA Arbitrator?

  • Service. As a FINRA arbitrator, people from all walks of life will receive the benefits of your experience. You will be an integral part of a process that provides quick, fair, and inexpensive resolution of disputes involving the securities industry
  • Skills. Not only will you learn the skills necessary to become a FINRA arbitrator, you will also acquire valuable skills that you can use any time. Once you are approved as an arbitrator, you will be required to participate in an arbitrator skills training program before being assigned to a case. FINRA has created a solid arbitrator training curriculum that serves as a model for other training programs across the U.S. Through training and service on cases, you will gain a broad knowledge of securities industry products, services, and terminology. Also, if you are an attorney, you may earn Continuing Legal Education (CLE) credits by taking this training. FINRA charges a very modest fee for its training programs.
  • Honoraria. Arbitrators are not employees of FINRA, but receive an honorarium at the rate of $400 per day, with hearings averaging approximately three days.
  • Publications. FINRA Dispute Resolution produces materials that provide vital information about its arbitration and mediation programs, updates on FINRA Board actions, arbitration procedures, and training issues. FINRA Dispute Resolution produces various brochures, and The Neutral Corner, an award-winning newsletter geared specifically for FINRA arbitrators and others in the dispute resolution field.


How Can I Become A FINRA Arbitrator?


Download, complete, and return the arbitrator application form or call (212) 858-4283, to obtain an Arbitrator Application Kit. You will need to include with the application two letters of recommendation written by persons who know you personally and can attest to your integrity and skills.


More Information/Questions?


FINRA encourages all qualified individuals to consider applying to the FINRA Roster of Arbitrators, and to recommend other qualified individuals to serve as arbitrators. Before you serve as a FINRA arbitrator, you will be required to attend a four-hour training course and pass a test and evaluation by the trainer. There is a $100 fee covering the cost of the training materials, the onsite instruction, and test administration.

Questions regarding this Alert may be directed to:


Neil McCoy

Neutral Recruitment Supervisor

FINRA Dispute Resolution
165 Broadway
New York, NY 10006
Tel: 212-858-4283
Fax: 212-208-7588