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The Financial Industry Regulatory Authority wants to boost arbitrators’ pay as well as the fees for those bringing claims of more than $500,000.

The broker-dealer regulator has filed with the Securities and Exchange Commission a proposed rule change that would increase the additional hearing-day honorarium chairs receive for each hearing on the merits from $125 to $250 and as well as create a new $125 chair honorarium for each pre-hearing conference in which the Chair participates.

Under the plan, “these increases would be funded primarily by minimal increases to the member surcharge and process fees for claims of more than $250,000 or claims for non-monetary or unspecified damages.”

FINRA’s proposal would also increase filing fees and hearing session fees for customers, associated persons and members bringing claims of more than $500,000 or claims for non-monetary or unspecified damage.

Samuel Edwards, a partner at Shepard Smith Edward & Kantas in Houston, who also serves as president of the Public Investors Advocate Bar Association, told ThinkAdvisor Monday in an email that PIABA is “supportive of increasing the honorarium paid to the Chair under FINRA’s new rule proposal as long as FINRA continues to divide the responsibility for those fees roughly 85% towards the industry and 15% towards customers.”

PIABA is a group for lawyers who represent investors in disputes with the securities industry.

Having better compensated and more engaged arbitrators, Edwards continued, “is good for the process and more fairly compensates arbitrators for their hard work. Still, we do not want arbitrators to be doing this as their living, similar to AAA and JAMS arbitrators.”

Rather, Edwards added, “most FINRA arbitrators view this as a service they provide and that is why they receive an honorarium, rather than a fee for their services. Moreover, it is important to keep that mentality of providing a services versus making a living to decrease the ‘repeat player’ advantage that firms have over customers.”

— Check out FINRA Postpones Arb Hearings for Rest of 2020 on ThinkAdvisor.