Finra opens arb system to RIAs

Move by regulator not related to SRO push; 'requests from attorneys'

Oct 25, 2012 @ 1:24 pm

By Bruce Kelly

The Financial Industry Regulatory Authority Inc. has opened up its arbitration system to registered investment advisers.

Until now, Finra arbitration has been used in investor or industry complaints involving securities firms and broker-dealers. RIAs now can use the system, according to Linda Feinberg, president of Finra's office of dispute resolution.

Ms. Feinberg disclosed the change Thursday in Austin, Texas, at the annual meeting of the Public Investors Arbitration Bar Association.

She said that Finra will formally announce the program soon and that a few arbitration cases involving investment advisers are already in the authority's system.

The move to include RIAs in Finra arbitration is in no way related to Finra's effort to become the self-regulatory organization overseeing investment advisers, according to Ms. Feinberg.

“We're doing it because we had a lot of requests from attorneys,” she said.

Other options, such as arbitration outside of an SRO and taking a claim to court, are more expensive than Finra arbitration, she said, adding that both parties had to agree to use Finra's arbitration system for a claim to go forward.

Through Sept. 30, Finra, which operates the largest dispute resolution forum in the securities industry, had closed 3,747 arbitration cases this year, down 17% from 4,489 through September 2011. Over the same nine months, 3,394 cases were opened, down 8% from 3,705 through the first nine months of 2011.


What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video


The #MeToo movement and the financial advice industry

Attendees at the Women to Watch luncheon commend the #MeToo movement for raising awareness about the issue of sexual harassment and bringing women together.

Latest news & opinion

Finra looks to streamline broker-dealer exams

CEO Robert Cook says three examination teams may be consolidated.

The 401(k) robo-revolution is here

Could human advisers be displaced as digital-advice firms use technology to deliver services to plan sponsors and participants?

SEC forging ahead on fiduciary rule despite DOL rule decision in 5th Circuit

Chairman Jay Clayton says 'the sooner the better' when asked when an SEC fiduciary rule will be ready.

What the next market downturn means for small RIAs

Firms that have enjoyed AUM growth because of the runup in stocks may find it hard to adjust to declining revenues if the market suffers a major correction.

DOL fiduciary rule likely to live on despite appeals court loss

Future developments will hinge on whether the Labor Department continues the fight to remake the regulation its own way.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print