Become an Arbitrator Frequently Asked Questions (FAQ)
Want to learn more about becoming an arbitrator? Here are our frequently asked questions.
1. Who are FINRA arbitrators?
FINRA arbitrators are a group of dedicated individuals serving the investing public and the securities industry. They are neutral, well-qualified and essential to maintaining a fair, impartial and efficient system of dispute resolution. FINRA maintains a roster of more than 7,200 arbitrators.
FINRA is seeking to expand the depth and diversity of our arbitrator roster by recruiting candidates from a variety of cultural backgrounds and areas of professional expertise, such as business, accounting, finance, library sciences, liberal arts, legal and more.
2. What is FINRA?
FINRA is dedicated to investor protection and market integrity. We regulate one critical part of the securities industry—brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines brokerage firms, and enforces compliance with FINRA rules and federal securities laws. If brokers break the rules, we have the power to fine them, suspend them or bar them from the industry. In addition, FINRA monitors trading market activity in the U.S. equities, options and fixed income markets.
FINRA believes investor education is a critical component of investor protection. To help retail investors make informed decisions about potential investments and investment professionals, FINRA delivers at no cost to investors or taxpayers a wide array of interactive tools, including the Market Data Center, the Fund Analyzer and BrokerCheck.
FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. We have extensive experience in providing a fair, efficient and effective venue to handle securities-related disputes. The resolution of problems and disputes is accomplished through two non-judicial proceedings: arbitration and mediation.
Learn more about what we do.
3. What does a FINRA arbitrator do?
An arbitrator who is selected to hear a case may serve as the sole arbitrator or as a member of a three-person arbitration panel. An arbitrator who accepts a case assignment must review all case materials prior to the first hearing session. Arbitrators serve as the decision makers for the dispute, and hear all sides of the case, study the evidence and render a final and binding decision.
4. What are the benefits of becoming an arbitrator?
FINRA arbitrators have the opportunity to acquire a broad knowledge of the securities industry and gain professional experience with a respected forum. Arbitrators get the chance to develop skills, give back, build their networks and earn honoraria.
FINRA arbitrators receive an honorarium for each pre-hearing or regular session they attend: $300 per single-session hearing (up to four-hours); $600 per double session; $350 per case decided on the papers, without an in-person hearing; and an additional $125 per hearing day for arbitrators serving as the chairperson of the panel. For additional information about the honorarium, see thisFAQ
5. Do I need to have arbitration or securities-related experience?
No, although some arbitrators do. Arbitrators are classified as public or non-public. Individuals who are not affiliated with the securities industry are deemed public arbitrators. Individuals who work or have worked in the financial industry, or who provide(d) services to financial industry clients or to parties engaged in securities arbitration and litigation are considered non-public arbitrators. Whether a person is classified as public or non-public, all individuals who are selected to become arbitrators will receive training before overseeing their first arbitration case.
6. What experience is needed?
Applicants should have at least five years of paid business and/or professional experience—inside or outside of the securities industry—and at least two years of college-level credits.
7. What are examples of the types of cases I will hear?
- An investor files a claim alleging her broker and his firm made recommendations to purchase stocks that were unsuitable because they were inconsistent with her investment objectives. The investor would like to get the money back that she invested. The broker and his firm respond that the investments were suitable with the investor’s investment objectives.
- A brokerage firm hires a broker and advances her $1,000,000 as part of a promissory note. During the course of her employment, the broker repays $600,000 and then leaves the firm. The firm sues for the remaining $400,000. The broker responds that she was forced to leave, and therefore she does not owe the firm the money and files a counterclaim for unspecified damages.
- An employee is fired from his position at a FINRA member firm. He alleges he was fired after the firm discovered his sexual orientation, when he applied for his husband to be added to the firm-sponsored medical plan. The firm responds that he was “let go” as part of a corporate restructuring plan.
8. How is an arbitrator assigned to a case?
Once an arbitrator completes FINRA's Basic Arbitrator Training Program, he or she will be eligible to hear cases. The arbitrator's name will begin to appear on lists (generated on a random basis by our list selection system) and be sent to the parties during the list selection process. An arbitrator who is selected to hear a case may serve as the sole arbitrator or as part of a three-person arbitration panel. An arbitrator who accepts a case assignment must review all case materials prior to the first hearing session. Additionally, the arbitrator may be required to:
- participate in an initial prehearing conference call to schedule hearing dates, set discovery and motion deadlines and address any other preliminary issues involved with the case;
- participate in subsequent prehearing calls , if necessary, to resolve discovery disputes, hear arguments on motions, resolve scheduling issues and address any other matter that will simplify or expedite the hearing;
- attend an in-person hearing, when held (not all cases require an in-person hearing, and in such circumstances, the selected arbitrator will render a decision based on the information provided by the parties);
- discuss and deliberate the outcome after the hearing; and
- render a decision in the case.
Want to see a typical day at a hearing? View this video.
9. Will I receive training?
Yes. Before becoming eligible to serve on arbitration cases, all applicants who are accepted to the arbitrator roster must complete FINRA's Basic Arbitrator Training Program. The training is free and covers each stage of FINRA's arbitration process and reviews the procedures that arbitrators must follow to successfully complete an arbitration case.
The training consists of an online basic arbitrator training course and exam (8 hours) and, an online expungement training course and exam (1.5 hours). After completing the mandatory online trainings, new arbitrators may attend a voluntary orientation. Orientations take place telephonically or in person at a regional office, and give new arbitrators a chance to meet FINRA staff and ask questions about serving on the roster.
FINRA also offers advanced arbitrator training on specific areas of FINRA's arbitration rules and processes. These sessions are available to an arbitrator who has passed the Basic Arbitrator Training Program.
10. Are there any costs?
There are no application costs and no training costs. Furthermore, FINRA reimburses arbitrators forreasonable travel expenses
11. Are FINRA arbitrators employed by FINRA?
No. They are not employed by FINRA; they are independent contractors. FINRA arbitrators are not eligible to receive FINRA employee or unemployment benefits.
12. I have a full-time/part-time job. Can I do that while serving as an arbitrator?
Yes. The backgrounds of our arbitrators range from full-time workers to freelancers to retirees to stay-at-home parents.
As a FINRA arbitrator, you will have the flexibility to work around your own schedule. Arbitrators are consulted to establish the dates and times that their assigned cases will take place. Some parts of the case are conducted via telephone, and can be held in accordance with the arbitrators’ schedules. Please keep in mind that cases are generally scheduled Monday – Friday during business hours, from 9:00 a.m. – 6:00 p.m.
13. I want to sign up. What happens next?
Complete the arbitrator application and submit it electronically. Applicants are typically notified of the outcome of their application within 60 – 90 days. FINRA conducts a preliminary review of your completed application before forwarding it to a subcommittee of the National Arbitration and Mediation Committee (NAMC) for final approval. Once you are approved, you are required to successfully complete FINRA’s Basic Arbitrator Training Program before being added to our arbitrator roster.
14. I still have questions. Whom can I contact?
Email us or contact Mara Weinstein at (212) 858-4384.