On July 11, the Financial Industry Regulatory Authority filed a proposed rule amendment to change the definition of a non-public arbitrator under the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes (collectively, the Codes), to a person who is otherwise qualified to serve as an arbitrator, and is disqualified from service as a public arbitrator under the Codes.
FINRA classifies arbitrators as either non-public or public. Generally, non-public arbitrators are those who have or had some affiliation with the financial industry. Based upon 2015 rule amendments, certain otherwise qualified arbitrator applicants did not meet the criteria for either public or non-public status, resulting in FINRA rejecting such applicants. The new rule amendment is designed to allow FINRA to appoint individuals to the roster of non-public arbitrators if they meet FINRA’s general arbitrator qualification criteria, but cannot be qualified as public arbitrators.
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