FINRA Tweaks Arbitrator Selection Rules for Clarity
Published Date: 8/25/2025
Notice
Summary
FINRA is updating how arbitrators get picked for dispute panels to make the process clearer and fairer, especially for public arbitrators who can’t be chairpersons. These changes also set new deadlines for asking questions and removing arbitrators, plus improve transparency. This affects anyone involved in FINRA arbitration and kicks in soon, with no extra costs expected.
Analyzed Economic Effects
8 provisions identified: 5 benefits, 1 costs, 2 mixed.
Algorithm boosts non-chair public picks
For three-arbitrator cases that include at least two public arbitrators, FINRA changed the list-selection algorithm so non-chair-qualified public arbitrators get two chances to be selected for the public list while chair-qualified public arbitrators get one chance. An individual arbitrator still may not appear more than once on the same public list.
Arbitrator removal, expungement, and disclosure rules
FINRA codified that the Director may remove an arbitrator if all named parties agree in writing, but parties may not agree to remove an arbitrator who is considering a request to expunge customer dispute information (with a limited exception allowing challenges for cause). FINRA also codified that a party may not inform the panel of another party's causal challenge, and if such a disclosure occurs the party that filed the removal request may file a written motion for removal within five days of being made aware of the disclosure.
Arbitrator lists sent faster (20 days)
FINRA shortened the rule timeline for sending arbitrator lists to parties from approximately 30 days after the last answer is due to 20 days. This codifies FINRA's practice of sending lists more quickly to increase transparency and efficiency in the selection process.
Full employment history in disclosure reports
FINRA will provide arbitrators' full post-education employment history and background information in a disclosure report to the parties, removing the existing rule phrase that limited employment history to the 'past 10 years.' This codifies FINRA's current practice to increase transparency about arbitrators' backgrounds.
Rules for asking arbitrator questions clarified
FINRA codified that a party may request additional information about an arbitrator at any stage of the proceeding, may omit identifying the requester to preserve anonymity, and must file objections to such requests within ten days of receipt. The Director will forward requests and objections to the arbitrator after five days have elapsed from service of objections, provided the request is not withdrawn.
Strike non-public arbitrators for any reason
FINRA amended its rules to expressly state that each separately represented party may strike any or all arbitrators from the Non-Public List 'for any reason.' This change aligns the non-public list striking language with other lists.
Rules align with electronic list selection
FINRA removed outdated wording that required parties to 'cross through' names on physical lists so the Codes align with the common practice of using FINRA's web-based Party Portal for electronic striking and ranking. The rules remain broad enough to instruct pro se parties how to strike manually.
Tighter deadline rules for ranked lists
FINRA codified that, absent extraordinary circumstances, the Director will not grant a party's request for an extension to complete ranked lists if the request is filed after the 20-day deadline has elapsed. Parties are encouraged to request extensions before the deadline or complete their lists on time.
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