Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > FINRA

FINRA Seeks to Revamp Expungement Process

Your article was successfully shared with the contacts you provided.

The Financial Industry Regulatory Authority is seeking comments on how and whether to establish a roster of arbitrators with additional training and specific backgrounds or experience to approve brokers’ expungement requests.

In its Regulatory Notice 17-42, issued Wednesday, FINRA also proposes changes to the timeframe in which an associated person can seek expungement of the customer dispute information, as well as the unanimous consent of a three-person panel of arbitrators to grant expungement.

FINRA said that it is proposing to “establish a roster of arbitrators with additional training and specific backgrounds or experience from which a panel would be selected to decide requests for expungement of customer dispute information in settled cases and in cases brought for the sole purpose of seeking expungement.”

FINRA’s Dispute Resolution Task Force in its Final Report and Recommendations recommended that FINRA create such a roster.

In addition, FINRA said that it was discussing with the North American Securities Administrators Association “more extensive changes” to the process.

“The proposals help address concerns related to arbitration panels granting expungement requests without hearing the full merits of the underlying case,” said Richard Berry, executive vice president and director of FINRA’s Office of Dispute Resolution. “The proposed changes also would make it easier for customers to participate in expungement hearings and make information about the underlying case more readily available to arbitrators.”

Comments on the notice are requested by Feb. 5, 2018.

Through the expungement process, associated persons may seek to remove allegations made by customers from the Central Registration Depository (CRD), the central licensing and registration system for the U.S. securities industry.

Registered securities firms and regulatory authorities submit information in CRD in response to questions on the uniform registration forms. These forms collect administrative, disciplinary and other information about registered personnel, including customer complaints, arbitration claims and court filings made by customers, and the arbitration awards or court judgments that may result from those claims or filings. The SEC, FINRA, state and other regulators use this information in connection with their licensing and regulatory activities.

As FINRA points out, most of the CRD information is made publicly available through BrokerCheck.

— Check out FINRA’s Ketchum Warns on Dangers of Poor Firm Culture on ThinkAdvisor.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.