FINRA Proposed Rule Change to Amend FINRA Rule 12000 Series
Summary
SIFMA provided comments to the SEC on the proposed rule change to amend FINRA Rule 12000 Series. SIFMA initially commented on the Proposal in December 2017 in connection with FINRA’s publication of Regulatory Notice 17-33.3 The Proposal would expand a customer’s options if a firm or associated person becomes inactive before an arbitration claim is filed or during a pending arbitration. The Proposal would allow the customer to withdraw a claim, amend pleadings, postpone hearings, invoke expedited default proceedings, and receive a refund of filing fees.
SIFMA generally supports the Proposal as an appropriate expansion of claimant protections when dealing with firms and associated persons who are no longer in business either at the time the claim is filed or at the time of the award.
Excerpt
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Attn: Vanessa Countryman, Secretary
Re: File Number SR-FINRA-2019-027
FINRA Proposed Rule Change to Amend FINRA Rule 12000 Series to Expand Options Available to Customers if a Firm or Associated Person Is or Becomes Inactive (the “Proposal”)
Dear Ms. Countryman:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the Proposal.2 SIFMA initially commented on the Proposal in December 2017 in connection with FINRA’s publication of Regulatory Notice 17-33.3 The Proposal would expand a customer’s options if a firm or associated person becomes inactive before an arbitration claim is filed or during a pending arbitration. The Proposal would allow the customer to withdraw a claim, amend pleadings, postpone hearings, invoke expedited default proceedings, and receive a refund of filing fees. SIFMA generally supports the Proposal as an appropriate expansion of claimant protections when dealing with firms and associated persons who are no longer in business either at the time the claim is filed or at the time of the award.
SIFMA’s support is predicated on FINRA’s stated purpose of the Proposal – namely, to facilitate “dealing with those member firms or associated persons who are responsible for most unpaid awards – firms and associated persons who are no longer in business either at the time the claim is filed or at the time of the award.”4 We agree that the Proposal would probably help address the issue of unpaid arbitration awards.