Regulatory Notice 09-07

SEC Approves New Motion to Dismiss Rule and Amendment to the Eligibility Rule in Arbitration; FINRA Imposes Immediate 30-Day Moratorium on Motions to Dismiss; Effective January 23, 2009

Executive Summary

Effective February 23, 2009, FINRA will implement new procedures for handling motions to dismiss in arbitration. The SEC approved a proposal to adopt Rule 12504 of the Code of Arbitration Procedure for Customer Disputes and Rule 13504 of the Code of Arbitration Procedure for Industry Disputes (collectively, the Codes) to establish procedures that will govern motions to dismiss.1 The proposal also amends Rules 12206 and 13206 to address motions to dismiss based on eligibility grounds.

 

The text of the amendment is set forth in Attachment A and will apply to motions to dismiss filed on or after the effective date.

 

This Notice also announces that FINRA is imposing a moratorium on filing motions to dismiss prior to the conclusion of a party's case-in-chief from the date of this Notice, January 23, 2009, until the effective date of the new rules, February 23, 2009.

 

1 Exchange Act Release No. 59189 (December 31, 2008), 74 Federal Register 731 (January 7, 2009) (File No. SR-FINRA-2007-021).