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FINRA Seeks SEC Approval of Dispute Resolution Rules

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At its last board meeting of 2018, the Financial Industry Regulatory Authority sent two rule proposals related to dispute resolution to the Securities and Exchange Commission for approval.

One rule would prohibit compensated non-attorney representatives from practicing in the FINRA arbitration and mediation forum, while the other provides a notice to arbitrators on expanded expungement guidance and modifies the fees for small claim expungement.

Robert Cook, FINRA’s CEO, also said in a video posting that the board also focused on the self-regulator’s 2019 budget, which Cook said “is customary for the last meeting of the year.”

Rick Berry, FINRA’s executive vice president and director of dispute resolution, said during the video that the board approved “banning compensated non-attorney reps in the arbitration forum.”

Second, he said, the board “closed some loopholes in the expungement process and codified our existing web guidance on expungement into rule form.”

Bridgette Madrian, a member of FINRA’s regulatory policy committee, added in the video that “a couple years ago, a task force was put together to think about how we could better address the issues that arise in the dispute resolution process, and these are two items that came up amongst several dozen items….so we’re making progress.”