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13406. Appointment of Arbitrators; Discretion to Appoint Arbitrators Not on List

This rule is no longer applicable. NASD Rule 13406 has been superseded by FINRA Rule 13406. 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.

For disputes involving statutory employment discrimination claims, see Rule 13802.

(a) Disputes Between Members, or Employment Disputes Between or Among Member Firms and Associated Persons Relating Exclusively To Employment Contracts, Promissory Notes, or Receipt of Commissions
(1) If the panel consists of one arbitrator, the Director will appoint the highest-ranked available arbitrator from the combined non-public chairperson list.
(2) If the panel consists of three arbitrators, the Director will appoint a three-arbitrator panel consisting of:
  • The two highest-ranked available arbitrators from the combined non-public arbitrator list; and

  • The highest-ranked available arbitrator from the combined non-public chairperson list, who will serve as chairperson of the panel.

(b) Other Disputes Between or Among Members and Associated Persons
(1) If the panel consists of one arbitrator, the Director will appoint the highest-ranked available arbitrator from the combined public chairperson list.
(2) If the panel consists of three arbitrators, the Director will appoint a three-arbitrator panel consisting of:
  • The highest-ranked available arbitrator from the combined non-public arbitrator list;

  • The highest-ranked available arbitrator from the combined public arbitrator list; and

  • The highest-ranked available arbitrator from the combined public chairperson list, who will serve as chairperson of the panel.
(c) If the number of arbitrators available to serve from the combined list(s) is not sufficient to fill an initial panel, the Director will appoint one or more arbitrators of the required classification to complete the panel from names generated randomly by the Neutral List Selection System. If the Director must appoint a non-public arbitrator, the Director may not appoint a non-public arbitrator as defined in Rule 13100(p)(2) or (3), unless the parties agree otherwise. The Director will provide the parties information about the arbitrators as provided in Rule 13403 and the parties will have the right to challenge the arbitrators as provided in Rule 13410.
(d) Appointment of arbitrators occurs when the Director sends notice to the parties of the names of the arbitrators on the panel. Before making any decision as an arbitrator or attending a hearing session, the arbitrators must execute NASD's arbitrator oath or affirmation.
Adopted by SR-NASD-2004-011 eff. April 16, 2007.

Selected Notices: 07-07

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