FINRA Releases Paper Providing Perspectives on Customer Recovery
WASHINGTON — The Financial Industry Regulatory Authority (FINRA) today released a paper providing perspectives on customer recovery of judgments and awards in the financial services industry, with a particular focus on the arbitration forum operated by FINRA. The paper – FINRA Perspectives on Customer Recovery – is intended to encourage a continued dialogue about addressing the challenges of customer recovery across the industry while directly informing the further enhancement of recovery in FINRA’s forum. As noted in the paper, FINRA plans to organize discussions with other regulators and policymakers to further address the issue of customer recovery, identify additional data or analysis that may help inform effective decision-making in this area, and consider potential courses of action.
To provide additional transparency about the FINRA dispute resolution forum and better inform discussions regarding customer recovery, FINRA is also making additional data on unpaid customer arbitration awards arising in this forum for the past five years available on its website.
FINRA also issued today a Regulatory Notice seeking comment on proposed amendments to its rules designed to create further incentives for the timely payment of awards by preventing an individual from switching firms, or a firm from using asset transfers or similar transactions, to avoid payment of arbitration awards.
FINRA is dedicated to investor protection and market integrity. It regulates 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 for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.