April 11, 2021

Volume XI, Number 101

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April 09, 2021

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April 08, 2021

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FINRA Amends Arbitration Codes to Increase Arbitrator Chairperson Fees and Certain Arbitration Fees

On February 12, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 21-04 (Notice), in connection with an amendment to FINRA’s Codes of Arbitration Procedure for Customer and Industry Disputes, regarding certain fees paid to arbitration chairpersons. FINRA Rules 12214 and 13214 were amended to increase the hearing-day chairperson fee from $125 to $250 to better compensate the chairperson for the additional training and responsibilities required of the position. Additionally, the amendments establish a new chairperson fee for an additional $125 for each prehearing conference that the chairperson leads, even if an arbitration case closes without a hearing.

To fund the increase in payments to chairpersons, the amendments also make minimal increases to certain arbitration fees. The following FINRA Rules were amended:

  • FINRA Rules 12901 and 13901 — increased the member surcharge for claim amounts larger than $250,000 and claims for non-monetary or unspecified damages;

  • FINRA Rules 12900 and 13900 — increased the filing fees for customers, associated persons, members or other non-members who file claims of more than $500,000, and claims for non-monetary or unspecified damages;

  • FINRA Rules 12903 and 13903 — increased the member process fees for claim amounts larger than $250,000, and for claims for non-monetary or unspecified damages; and

  • FINRA Rules 12902 and 13902 — increased hearing session fees for claims of more than $500,000 and for claims for non-monetary or unspecified damages, and would be small. The amendments do not apply to hearings with one arbitrator, so that the forum remains accessible and affordable to customer claimants with small claims.

The amendments are effective for arbitration cases filed on or after April 19.

FINRA Regulatory Notice 21-04

 

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©2021 Katten Muchin Rosenman LLPNational Law Review, Volume XI, Number 50
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About this Author

Susan Light, Katten Law Firm, Finance Law Attorney, New York
Partner

Susan Light focuses her practice on financial services regulatory matters. She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), other self-regulatory organizations (SROs) and state and federal regulatory authorities. She has particular experience related to sales practice issues, financial and operational issues, anti-money laundering, crowdfunding, cybersecurity, and cryptocurrencies.

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212-940-8599
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Adam Haft is an associate in the Financial Services practice.

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