FINRA's Overhaul of Arbitrator Selection System Moves Forward

Posted on October 3rd, 2023 at 1:11 PM
FINRA's Overhaul of Arbitrator Selection System Moves Forward

From the desk of Jim Eccleston at Eccleston Law 

FINRA has received approval to revamp its procedures for removing arbitrators from the three-member panels responsible for arbitration matters involving claims between and among financial advisors, their firms, and customers.

The changes, among other things, formalize FINRA's existing practice of allowing arbitrators to be replaced before an arbitration hearing commences. They also mandate that the director of dispute resolution services must document the reasons for accepting or rejecting a request to remove a specific panel member.

Under the new rule, arbitrators can be removed due to various conflicts of interest, such as prior dealings with a party involved in a particular case. The rule further requires the director of dispute resolution services to meticulously review the arbitrators' names on the shortlist for a given case to identify and address these conflicts.


Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

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