The Financial Industry Regulatory Authority (FINRA) has acted on 35 of the 51 recommendations made by the FINRA Dispute Resolution Task Force in December 2015, according to a status report released last week.
“We are very pleased to report that we have already implemented many of the task force’s recommendations, and we are diligently responding to the remaining recommendations. Many of the recommendations we are putting in place are meaningful changes that will position the forum to better serve all parties involved. The [National Arbitration and Mediation Committee] and FINRA staff are doing an effective job of comprehensively reviewing and promptly taking action on the recommendations,” Robert Cook, FINRA’s president and CEO, said.
FINRA formed a 13-member task force in July 2014 to consider enhancements to its arbitration and mediation forum. The interim status report on progress was released in October 2016. The 16 remaining recommendations are currently pending further action.
Recommendations involving forum transparency, arbitrator recruitment and training, and case administration processes were implemented in 2016.
The report showed that FINRA received 945 arbitrator applications in 2016, exceeding its goal to recruit 750 new arbitrators. Progress in adding women and African-Americans to the roster was also seen. In 2016, 33 percent of the arbitrators added were women, up from 26 percent in 2015, and 14 percent were African-American, up from 4 percent in 2015.
On six of the recommendations, FINRA has already begun the rulemaking process. So far, the Securities and Exchange Commission has approved two proposals related to the number of public arbitrators on lists and motions to dismiss. Four other proposals, including a proposal to develop an intermediate form of adjudication for small claims, are in different phases of the rulemaking process.