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13204. Class Action Claims

This rule is no longer applicable. NASD Rule 13204 has been superseded by FINRA Rule 13204. Please consult the appropriate FINRA Rule.

The Industry Code will apply to claims filed on or after April 16, 2007. In addition, the list selection provisions of the Industry Code will apply to previously filed claims in which a list of arbitrators must be generated after April 16, 2007; in these cases, however, the claim will continue to be governed by the remaining provisions of the old Code unless all parties agree to proceed under the new code.

(a) Class action claims may not be arbitrated under the Code.
(b) Any claim that is based upon the same facts and law, and involves the same defendants as in a court-certified class action or a putative class action, or that is ordered by a court for class-wide arbitration at a forum not sponsored by a self-regulatory organization, shall not be arbitrated under the Code, unless the party bringing the claim files with NASD one of the following:
(1) a copy of a notice filed with the court in which the class action is pending that the party will not participate in the class action or in any recovery that may result from the class action, or has withdrawn from the class according to any conditions set by the court; or
(2) a notice that the party will not participate in the class action or in any recovery that may result from the class action.
(c) The Director will refer to a panel any dispute as to whether a claim is part of a class action, unless a party asks the court hearing the class action to resolve the dispute within 10 days of receiving notice that the Director has decided to refer the dispute to a panel.
(d) A member or associated person may not enforce any arbitration agreement against a member of a certified or putative class action with respect to any claim that is the subject of the certified or putative class action until:
  • The class certification is denied;

  • The class is decertified;

  • The member of the certified or putative class is excluded from the class by the court; or

  • The member of the certified or putative class elects not to participate in the class or withdraws from the class according to conditions set by the court, if any.
This paragraph does not otherwise affect the enforceability of any rights under the Code or any other agreement.
Adopted by SR-NASD-2004-011 eff. April 16, 2007.

Selected Notices: 07-07

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