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93-63 SEC Approves Changes To Make All Arbitration Awards Publicly Available: Effective October 1, 1993

SUGGESTED ROUTING

Senior Management
Legal & Compliance

Executive Summary

On August 12, 1993, the Securities and Exchange Commission (SEC) approved an amendment to Part III, Section 41(f) of the Code of Arbitration Procedure (Code) making all NASD arbitration awards publicly available. The amendment is effective October 1, 1993. The text of the amendment follows this Notice.

Background

On August 12, 1993, the SEC approved an amendment to Section 41(f) of Part III of the Code making all arbitration awards, their contents, and the names of the arbitrators publicly available. Subsection 41(f), adopted May 10, 1989, made customer arbitration awards publicly available, but with the names of the arbitrators deleted. Industry arbitration awards, including awards involving employment disputes have not previously been available to the public. Parties to an arbitration may, however, obtain copies of awards previously rendered by the arbitrators selected to decide their case.

The amendment to Section 41(f) announced here deletes reference to awards involving public customers, thereby making all awards publicly available; deletes the requirement of removing arbitrators' names from such awards; and deletes the provision for obtaining awards by the arbitrators chosen to hear a particular case involving a public customer, since all awards will now be available. Customer awards issued after May 10, 1989, will include the names of the arbitrators, while industry awards issued after October 1, 1993, including employment cases, will include arbitrators' names.

The amendment was prompted because the current system has become burdensome to both the parties and the Arbitration Department staff. Further, the amendment will make the Code consistent with all other securities industry self-regulatory organizations, some of which make customer awards publicly available without deletion of arbitrators' names, and others that make all awards, including awards in employment cases, available.

Upon implementation of the rule, the NASD will provide parties to an NASD arbitration with a list of all publicly available NASD awards rendered by each arbitrator selected for the case. Listings will include the case name and number, as well as whether the arbitrator concurred or dissented in the decision. The NASD's office in Rockville, Maryland will handle requests and will distribute awards by mail or, in certain instances, by facsimile.

Finally, a party to an arbitration that makes a request will receive, at no cost, either the last five awards rendered by each arbitrator or all the awards rendered by the arbitrator in the last 12 months, whichever is the greater number. Any additional awards will be provided at a cost of $5 per award up to a maximum of $70 per case. Persons not a party to an arbitration will be charged $5 per award, with no ceiling on total charges.

Questions concerning this Notice may be directed to the NASD Arbitration Department at (212) 480-4881.

Text of Amendment to Part III, Section 41 of the Code of Arbitration Procedure

(Note: Deletions are in brackets.)

Part III — Uniform Code of Arbitration

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Awards Sec. 41.

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(f) All awards [involving public customers] and their contents[, excluding the names of the arbitrators,] shall be made publicly available. [A party to an arbitration involving a public customer may request that the Director of Arbitration provide copies of all awards rendered by the arbitrator(s) chosen to decide its case. A party wishing to obtain such information must notify the Director of Arbitration within three (3) business days of receipt of notification of the identity of the person(s) named to the panel.]

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