Registered investment advisers are now eligible to participate in FINRA’s arbitration system, according to Linda Fienberg, president of FINRA’s office of dispute resolution. Arbitration was previously only available to broker-dealers and securities firms.
FINRA has yet to make an official announcement, hence many of the details about the program are yet to be publicized. Nonetheless, Fienberg indicated that several cases involving advisers are already moving through the system.
Fienberg was also quick to shoot down any speculation that the program’s expansion was intended to boost FINRA’s credentials as the new SRO for advisers. “We’re doing it because we had a lot of requests from attorneys,” she said.
Other arbitration venues and litigation are both generally more expensive than FINRA arbitration, Ms. Fienberg said. She further noted that both parties have to agree to submit the dispute to FINRA’s arbitration system.
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