Regulatory Notice 16-25

Forum Selection Provisions Involving Customers, Associated Persons and Member Firms

FINRA reminds member firms that customers have a right to request arbitration at FINRA’s arbitration forum at any time and do not forfeit that right under FINRA rules by signing any agreement with a forum selection provision specifying another dispute resolution process or an arbitration venue other than the FINRA arbitration forum.

In addition, FINRA reminds member firms that FINRA rules do not permit member firms to require associated persons to waive their right to arbitration under FINRA’s rules in a predispute agreement.

A member firm’s failure to comply with FINRA’s rules relating to predispute arbitration agreements with customers or predispute agreements with associated persons, or failure to submit a dispute to FINRA arbitration as required by FINRA’s rules, would violate FINRA rules, and member firms may be subject to disciplinary action.

Questions concerning this Notice should be directed to:

  • Victoria L. Crane, Associate General Counsel, Office of General Counsel, at (202) 728-8104 or by email; or
  • Margo A. Hassan, Associate Chief Counsel, Dispute Resolution, at (212) 858-4481 or by email.