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Regulation and Compliance > Federal Regulation > FINRA

FINRA Plans New Rule to Accelerate Arb Cases for Those Who Are Ill, Over 75

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What You Need to Know

  • FINRA's current voluntary program for accelerating these cases hasn't meaningfully sped case processing, it says.
  • The new rule would allow accelerated processing of an arbitration proceeding if certain criteria is met.
  • Comments are due by May 16.

The Financial Industry Regulatory Authority wants to modify its rules that allow for accelerated arbitration proceedings for parties who are 75 or older or are seriously ill.

FINRA is seeking feedback by May 16 on adding a new rule to the Codes of Arbitration Procedure to allow any party to request accelerated processing of an arbitration proceeding if they are:

  • at least 75 years old; or
  • certify that they have received a medical diagnosis and prognosis, and that based on that information they have a reasonable belief that accelerated processing is necessary to prevent prejudicing their interest in the arbitration.

The Director of Dispute Resolution Services would make an “objective determination as to whether the requesting party is at least 75 or has submitted the required certification,” FINRA states.

As it stands now, FINRA offers a voluntary program to accelerate arbitration proceedings, upon request, for claimants who have a serious health condition or are at least 65 years old.

Under the current program, “FINRA staff accelerates the case-related tasks that they can control, such as completing the arbitrator selection process, scheduling the initial prehearing conference and serving the final award,” FINRA states.

The current program also encourages arbitrators to be sensitive to the needs of the parties in making scheduling decisions and setting deadlines.

The program “does not, however, provide for shortened, rule-based case processing deadlines for parties or provide arbitrators with instruction on how quickly the arbitration should be completed,” FINRA said.

FINRA’s current program “has not resulted in meaningfully shortened case processing times,” FINRA said. “Cases that qualify for the current program close only slightly more quickly than cases that are not in the current program.”

The proposal “would improve the ability of these parties — which FINRA anticipates will primarily be customer claimants — to participate meaningfully in a FINRA arbitration and obtain a fair outcome,” according to FINRA.

Under FINRA’s new rule, if the Director determines that the requesting party qualifies for accelerated processing, the proposal would shorten the timeframe to complete the arbitration as follows:

Turnaround Time. The proposal would provide that a panel in an accelerated case shall endeavor to render the award within 10 months or less and set discovery, briefing and motions deadlines, and schedule hearing sessions, consistent with doing so. The current program encourages arbitrators to be sensitive to the needs of the parties in making scheduling decisions and setting deadlines but does not establish a timeframe by which the arbitration should be completed.

Serving an Answer. The proposal would shorten the deadline for an answer to a statement of claim from 45 to 30 days.

Responding to a Third-Party Claim. The proposal would shorten the deadline for a response to a third-party claim from 45 to 30 days.

Completing Arbitrator Lists. Parties must return the ranked arbitrator lists to FINRA staff no more than 20 days after the lists were sent to the parties. The proposal would shorten this deadline to 10 days.

Discovery in Customer Cases. Parties in customer cases are required to produce to all other parties documents that are described in the Document Production Lists on FINRA’s website within 60 days of the date that the answer to the statement of claim is due; explain why specific documents cannot be produced within the required time; or object and file an objection with the Director. The proposal would shorten this deadline to 35 days.

Other Discovery Requests. Parties must respond within 60 days of receipt to requests for other documents or information. The proposal would shorten this deadline to 30 days.


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