FINRA Lets You Pick Arbitrators Better in Wall Street Spats
Published Date: 8/28/2026
Notice
Summary
FINRA is updating its rules to give people more say when picking arbitrators for resolving disputes. This affects anyone involved in FINRA arbitration cases, making the process fairer and more transparent. The changes kick in after SEC approval, aiming to speed up decisions without extra costs.
Analyzed Economic Effects
5 provisions identified: 3 benefits, 2 costs, 0 mixed.
Parties may face review costs and timing delays
FINRA’s economic assessment states that parties will incur costs to review new lists or short lists and make selections—especially under compressed timeframes—and that cases with multiple separately represented parties may be more likely to eliminate too many arbitrators, causing delays in completing panel appointments and longer proceedings.
Extended-list appointments replaced by new lists
When the combined ranked lists don’t have enough arbitrators to fill an initial panel, FINRA proposes to stop forcing parties to accept an extended list appointment and instead provide a new list of arbitrators generated randomly for parties to strike and rank with the same selection rights they have during initial selection.
Short List becomes default for replacements
FINRA proposes to make the Short List Option the default when replacing arbitrators after initial panel appointment. The Proposed Short List Option provides (1) five arbitrators if a hearing is scheduled in more than 20 days, (2) three arbitrators if a hearing is scheduled between 10 and 20 days, (3) five arbitrators if a hearing is scheduled in fewer than 10 days and the parties agree to postpone, and (4) five arbitrators if hearings have concluded but the award is not issued. Parties must return ranked short lists within two days for three-arbitrator short lists and within five days for five-arbitrator short lists.
When Short List won’t be available
The Proposed Short List Option would not be available if: (1) all parties agree to proceed with only remaining arbitrators (three-arbitrator disputes); (2) a hearing is scheduled in fewer than 10 days and parties do not agree to postpone; (3) multiple separately represented claimants do not agree to submit one ranking list; (4) multiple separately represented respondents do not agree to submit one ranking list; (5) a third-party respondent does not agree to jointly submit one ranking list; or (6) the case is a straight-in expungement request filed on or after October 16, 2023.
Replacement arbitrator duties and $300 honorarium
The proposed rules would require replacement arbitrators to review the case record (including audio/transcripts and exhibits), execute FINRA’s arbitrator oath, and allow replacement arbitrators to decide pending motions and continue hearings. FINRA would pay replacement arbitrators an honorarium of $300 for every four hours or less reasonably spent on record review if the arbitrator provides the required written confirmation.
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