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12000. CODE OF ARBITRATION PROCEDURE FOR CUSTOMER DISPUTES
PART IV APPOINTMENT, DISQUALIFICATION, AND AUTHORITY OF ARBITRATORS
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12402. Cases with One Arbitrator
This version is valid from Feb 1 2011 through Apr 2 2017.
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(a) Composition of Panels
The arbitrator will be a public arbitrator selected from the public chairperson roster, unless the parties agree in writing otherwise.
(b) Generating Lists
(1) The Neutral List Selection System will generate a list of 10 public arbitrators from the FINRA chairperson roster.
(2) The Neutral List Selection System will exclude arbitrators from the lists based upon current conflicts of interest identified within the Neutral List Selection System.
(c) Sending Lists to Parties
(1) The Director will send the list generated by the Neutral List Selection System to all parties at the same time, within approximately 30 days after the last answer is due. The parties will also receive employment history for the past 10 years and other background information for each arbitrator listed.
(2) If a party requests additional information about an arbitrator, the Director will request the additional information from the arbitrator, and will send any response to all of the parties at the same time. When a party requests additional information, the Director may, but is not required to, toll the time for parties to return the ranked lists under Rule 12402(d)(3).
(d) Striking and Ranking Arbitrators
(1) Each separately represented party may strike up to four of the arbitrators from the list for any reason by crossing through the names of the arbitrators. At least six names must remain on the list.
(2) Each separately represented party shall rank all remaining arbitrators on the list in order of preference, with a "1" indicating the party's first choice, a "2" indicating the party's second choice, and so on.
(3) The ranked list must be returned to the Director no more than 20 days after the date upon which the Director sent the lists to the parties. If the Director does not receive a party's ranked list within that time, the Director will proceed as though the party did not want to strike any arbitrator or have any preferences among the listed arbitrators.
(4) Parties are not required to send a copy of their ranking list to the opposing parties.
(e) Combining Lists
The Director will prepare a combined ranked list of arbitrators based on the parties' numerical rankings, as follows:
• The Director will add the rankings of all claimants together, and the rankings of all respondents together, to produce a separate combined ranked list for the claimants and the respondents.
• The Director will then add the combined rankings of claimants and the respondents together, to produce a single combined ranking number for each arbitrator, excluding all arbitrators stricken by a party.
(f) Appointment of Arbitrators; Discretion to Appoint Arbitrators Not on List
(1) The Director will appoint the highest-ranked available arbitrator from the combined chairperson list.
(2) If the number of arbitrators available to serve from the combined list is not sufficient to fill an initial panel, the Director will appoint a chair-qualified arbitrator to complete the panel from names generated randomly by the Neutral List Selection System.
(3) The Director will provide the parties information about the arbitrator as provided in Rule 12402(c) and the parties will have the right to challenge the arbitrator as provided in Rule 12407.
(4) Appointment of the arbitrator occurs when the Director sends notice to the parties of the name of the arbitrator. Before making any decision as an arbitrator or attending a hearing session, the arbitrator must execute FINRA's arbitrator oath or affirmation.
(g) Replacement of Arbitrators
(1) If an arbitrator is removed, or becomes otherwise unable or unwilling to serve, the Director will appoint a replacement arbitrator in accordance with this rule.
(2) The Director will appoint as a replacement arbitrator the arbitrator who is the most highly ranked available arbitrator remaining on the combined list.
(3) If there are no available arbitrators on the combined list, the Director will appoint an arbitrator from the chairperson roster to complete the panel from names generated by the Neutral List Selection System. The Director will provide the parties information about the arbitrator as provided in Rule 12402(c) and the parties shall have the right to object to the arbitrator as provided in Rule 12407.
Adopted by SR-FINRA-2010-053 eff. Feb. 1, 2011.
Selected Notice: 11-05.