FINRA proposed amendments to the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes (together, the "Codes") to modify the process for expunging customer dispute information.
Among other things, the amendments would:
- impose obligations on expungement requests that are (i) filed amidst an investment-related, customer-initiated arbitration ("customer arbitration") "by an associated person, or by a party to the customer arbitration on-behalf-of an association person" or (ii) filed by an associated person who is separate from the customer arbitration ("straight-in request"); and
- establish a list of arbitrators with "enhanced training and experience" from which three people can be chosen at random to participate in a panel that decides straight-in requests.
The amendments will go into effect no later than 120 days after the publication of a regulatory notice announcing the SEC's approval of the proposal.
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