Dispute Resolution Glossary
Answer – A respondent's written reply to a claim.
Arbitration Case Administrator – The person at FINRA who handles administrative matters in arbitration proceedings.
Arbitrator – A person chosen to decide arbitration disputes between parties.
Associated Person – An associated person is any person engaged in the investment banking or securities business who is directly or indirectly controlled by a FINRA member, whether or not they are registered or exempt from registration with FINRA. An associated person includes, but is not limited to, every sole proprietor, partner, officer, director, or branch manager of any FINRA member. This individual may also be referred to as a broker.
Award – A written document provided by the arbitrator(s) stating the disposition of the case. Awards are rendered by independent arbitrators who are chosen by the parties to issue final, binding decisions. FINRA makes available an arbitration forum—pursuant to rules approved by the SEC—but has no part in deciding the award.
Broker – See definition of Associated Person.
Brokerage Firm – See definition of Member Firm.
Claim – An allegation or request for monetary or other relief.
Claimant – A party that initiates an arbitration or mediation for monetary or other relief.
Counsel – An attorney or representative who advises and represents a party in an arbitration or mediation.
Counterclaim – A claim filed by a respondent against the claimant.
Cross-Claim – A claim filed by a respondent against another already-named respondent.
Customer Code – The Code of Arbitration Procedure for Customer Disputes is the set of rules that governs disputes involving customers.
Dispute – A disagreement between or controversy involving two or more parties, which may consist of one or more claims.
Filing – A party submits to FINRA a statement of claim, which explains the nature of the dispute, and other accompanying documentation to initiate an arbitration.
Hearing – A hearing is a meeting of the parties and arbitrators in which the parties present facts and evidence and the arbitrators listen to these presentations to resolve the disputes. A hearing is also referred to as the hearing on the merits.
Hearing Session – A hearing session is any meeting between the parties and arbitrator(s) of four hours or less, including a hearing or a prehearing conference.
Industry Code – The Code of Arbitration Procedure for Industry Disputes is the set of rules that governs disputes involving securities industry members only.
Investor – A person or entity (not acting in the capacity of an associated person or member) that transacts business with any member firm and/or associated person.
Mediation Code – The Code of Mediation Procedure is the set of rules that governs the mediation process. Mediation is an option to resolve disputes that could be arbitrated under the Customer or Industry Code.
Mediator – A mediator is an individual who assists and guides the parties toward their own resolution in a mediation, but does not decide the outcome.
Member Firm – A member firm is a brokerage firm that has been admitted to membership in FINRA, whether or not the membership has been terminated or cancelled. A brokerage firm may be a partnership, corporation or other legal entity.
Panel – A panel is the arbitration panel, whether it consists of one or more arbitrators.
Party – A person or member firm making or responding to a claim in an arbitration proceeding.
Pleadings – A pleading is a statement describing a party's causes of action or defenses. Documents that are considered pleadings are: a statement of claim, an answer, counterclaim, a cross-claim, a third-party claim, and any replies.
Prehearing Conference – A prehearing conference is any hearing session, including an Initial Prehearing Conference, that takes place before the hearing on the merits begins.
Respondent – A respondent is a party against whom a statement of claim or third party claim has been filed. A claimant against whom a counterclaim has been filed is not a respondent.
Service – Service is the act of delivering the statement of claim or other pleadings to those parties named in the arbitration.
Sexual Assault Claim – A sexual assault claim is a claim involving a nonconsensual sexual act or sexual contact, as such terms are defined in section 2246 of title 18 of the United States Code or similar applicable Tribal or State law, including when the victim lacks capacity to consent. The claim may be arbitrated at FINRA if the parties agreed to arbitrate it after the dispute arose.
Sexual Harassment Claim – A sexual harassment claim is a claim relating to conduct that is alleged to constitute sexual harassment under applicable Federal, Tribal, or State law. The claim may be arbitrated at FINRA if the parties agreed to arbitrate it after the dispute arose.
Statement of Claim – A statement of claim is the initial or amended claim filed by the party or parties initiating the arbitration.
Statutory Disqualification – A person is subject to statutory disqualification concerning the person's membership, participation in, or association with a member of a self-regulatory organization, like FINRA, if, among other things, the person has been or is expelled or suspended from membership or participation in, or barred or suspended from being associated with a member of an SRO, foreign or international securities exchange, contract market or futures exchange. For additional statutory disqualification criteria and more detail on this definition, see Section 3(a)(39) of the Securities Exchange Act of 1934.
Statutory Employment Discrimination Claim – A statutory employment discrimination claim is a claim alleging employment discrimination in violation of a statute. The claim may be arbitrated at FINRA if the parties agreed to arbitrate it, either before or after the dispute arose.
Submission Agreement – A Submission Agreement is the FINRA Submission Agreement, which is a document that parties must sign at the outset of an arbitration in which they agree to submit to arbitration under the Customer and Industry Codes. A submission agreement also refers to a FINRA Mediation Submission Agreement, which is a document that parties must sign at the onset of a mediation when they agree to mediate under the Mediation Code.
Subpoena – A subpoena is an order for a witness to appear at a particular time and place to testify. A subpoena for production of documents in the control of the witness is called a "subpoena duces tecum."
Third-Party Claim – A third-party claim is a claim by the respondent against a party not already named in the statement of claim or any other previous pleading.
Unspecified Damages – "Unspecified Damages" is a type of relief a party requests when the amount of monetary relief or the form of other relief is unknown or undisclosed.