Regulatory Notice 16-36

SEC Approves Amendments to the Codes of Arbitration Procedure Regarding Award Offsets

Effective Date: October 24, 2016

Executive Summary

The SEC has approved FINRA’s rule change amending Rule 12904 (Awards) of the Code of Arbitration Procedure for Customer Disputes (Customer Code) and Rule 13904 (Awards) of the Code of Arbitration Procedure for Industry Disputes (Industry Code) to provide that absent specification to the contrary in an award, when arbitrators order opposing parties to make payments to one another, the monetary awards shall offset and the party assessed the larger amount shall pay the net difference.

The amendments are effective for arbitration awards rendered on or after October 24, 2016.

The text of the amendments is set forth in Attachment A.

Questions concerning this Notice should be directed to:

  • Kenneth Andrichik, Senior Vice President, Chief Counsel, and Director of Mediation & Strategy, FINRA Office of Dispute Resolution, at (212) 858-3915; or
  • Margo Hassan, Associate Chief Counsel, FINRA Office of Dispute Resolution at (212) 858-4481.