NASD Launches New Dispute Resolution Subsidiary
Amy E. Hyland (202) 728-8304
Washington, D.C.—The NASD today announced the formation of NASD Dispute Resolution, Inc., a new subsidiary company under the umbrella of the National Association of Securities Dealers, Inc. (NASD) that will administer NASD arbitration, mediation, and other alternative dispute resolution services. In the Fall of 1999, the Securities and Exchange Commission approved the creation of a new subsidiary of the NASD to operate the Dispute Resolution program. Formerly known as NASD Regulation Office of Dispute Resolution, NASD Dispute Resolution became operational on July 9, 2000. In addition, NASD Dispute Resolution today launches a new Web site at www.nasdadr.com.
"The launch of NASD Dispute Resolution is another important milestone in the evolution of NASD’s securities arbitration and mediation forum. In the past four years, NASD Dispute Resolution has taken significant steps to improve the forum, resulting in a fairer and more efficient dispute resolution process. We believe the creation of a separate subsidiary will further enhance the perception of neutrality and increase the confidence and comfort-level of forum users," said Linda D. Fienberg, President of NASD Dispute Resolution.
Under the leadership of Fienberg and George Friedman, Senior Vice President of NASD Dispute Resolution, the organization has made a significant effort to improve the fairness and efficiency of the NASD forum – a forum that handles approximately 90 percent of all securities arbitration cases. In 1999, the U.S. Military Academy at West Point conducted an analysis of a survey of the NASD arbitration forum’s users and found that 93 percent of survey participants concluded that their case was handled "fairly and without bias."
NASD Dispute Resolution also has made significant improvements in the management of its neutral roster. In late 1998, the NASD introduced a new arbitrator selection system, the Neutral List Selection System (NLSS). This computer-generated arbitrator selection process gives parties more control over the selection of the arbitrators who will hear their case. The NASD forum also has instituted a national training program for arbitrators and requires neutrals to pass a test. In addition, one of the forum’s goals has been to increase the total number of women and minority arbitrators. Since 1996, NASD Dispute Resolution has conducted an aggressive recruiting effort and has increased successfully the total number of women and minority arbitrators.
The NASD forum also has been in the forefront of supporting mediation as an alternate way for parties to settle disputes. The percentage of parties that try mediation has risen steadily from 7 percent in 1996 to 22 percent in 1999, and parties that use mediation reach settlement about 80 percent of the time. In addition, for the past four years the forum has offered "mediation settlement month" to users, allowing them to enjoy the benefits of mediation at reduced costs for a 30-day period. Settlement Month has increased awareness of mediation and has encouraged parties with smaller claims to resolve disputes through this voluntary process.
Along with the formation of a new subsidiary, NASD Dispute Resolution unveils its official Web site at www.nasdadr.com. The new site offers an in-depth, centralized explanation of arbitration and mediation, an updated list of rule filings affecting arbitration, resources for parties and neutrals, contact information, the Code of Arbitration Procedure, and press releases. In addition, the new site provides users with the capability to request mediation directly from the new Web site and offers an online fee calculator to help parties determine what their arbitration fees could be.
NASD Dispute Resolution is the nation’s largest securities industry dispute resolution forum, handling over 90 percent of all securities-related disputes through arbitration and/or mediation. NASD Dispute Resolution, NASD Regulation, the Nasdaq Stock Market, Inc., and the American Stock Exchange® are subsidiaries of the National Association of Securities Dealers, Inc. (NASD®), the largest securities industry self-regulatory organization in the United States. For more information, please visit the NASD Dispute Resolution Web site at www.nasdadr.com.