The Securities and Exchange Commission has approved amendments to the Financial Industry Regulatory Authority’s customer and industry arbitration rules to pay each arbitrator a $200 honorarium to decide without a hearing session under certain conditions.
The amendments, FINRA states in Regulatory Notice 18-40, are effective for cases filed on or after Jan. 7, 2019.
FINRA states that it has amended Rules 12214(c) and 13214(c) of the Codes of Arbitration Procedure for Customer and Industry Disputes to provide that FINRA will pay each arbitrator an honorarium of $200 to decide, without a hearing session a:
- discovery-related motion;
- motion that contains one or more contested subpoena requests or contested orders for production or appearance; or
- motion that contains one or more contested subpoena requests and contested orders for production or appearance.
The regulatory notice explains that under the codes, the parties exchange documents and information to prepare for the arbitration through the discovery process.
“If an individual or entity objects to a discovery request, the party seeking the documents or information may request that the panel issue a subpoena4 or an order of production or appearance,” the Reg Notice states.
A party may request that the panel issue a subpoena to parties in an arbitration, non-parties, as well as entities and individuals who are not FINRA members, FINRA states.
“If the request will be served on a FINRA member, FINRA rules favor the use of orders rather than subpoenas, unless circumstances dictate otherwise. A party’s request (or motion) to issue a subpoena or order becomes ‘contested’ if there is an objection raised to the scope or propriety of the subpoena or order.”