Regulatory Notice 09-16

SEC Approves Amendments to Require Arbitrators to Provide an Explained Decision at Parties' Joint Request

Effective Date: April 13, 2009

Effective April 13, 2009, FINRA will require arbitrators to provide an explained decision at the parties' joint request. An explained decision is a fact-based award stating the general reasons for the arbitrators' decision. Parties will be required to submit any joint request for an explained decision at least 20 days before the first scheduled hearing date. The chairperson of the arbitration panel will write the explained decision and will receive an additional honorarium of $400 for doing so.

The SEC approved amendments to FINRA Rules 12214, 12514 and 12904 of the Customer Code of Arbitration Procedure and FINRA Rules 13214, 13514 and 13904 of the Industry Code of Arbitration Procedure relating to explained decisions.1 The text of the rules is set forth in Attachment A, and will apply to all arbitration cases in which an initial prehearing conference has not been held, or waived by the parties, by the effective date.

Questions concerning this Notice should be directed to:

  • Richard W. Berry, Vice President and Director of Case Administration, FINRA Dispute Resolution (DR), at (212) 858-4307 or by email; or
  • Margo A. Hassan, Counsel, DR, at (212) 858-4481 or by email.