FINRA seeks to speed arb for ill, elderly

In an effort to improve the efficiency of dispute resolution and investor protection, the U.S. Financial Industry Regulatory Authority Inc. (FINRA) is consulting on a rule to accelerate proceedings for investors that are sick, or elderly.

The industry self-regulatory organization proposed a rule that would reduce processing deadlines for arbitration cases involving investors that are older than 75, or who have serious illnesses that could compromise their ability to participate in proceedings.

“The proposal would address concerns that some parties may not be able to participate meaningfully in FINRA arbitration due to illness or age,” the SRO said in a notice outlining the proposal.

“For the parties who qualify, the proposal would shorten case deadlines and provide arbitrators with instruction on how quickly the arbitration should be completed. The proposal would thereby help improve the ability of these parties to meaningfully participate in FINRA arbitration,” it added.

Currently, FINRA has a voluntary program that aims to speed up proceedings for investors who are older, or ill. However, it has found that this approach hasn’t resulted in meaningfully shorter processing times.

“Cases that qualify for the current program close only slightly more quickly than cases that are not in the current program,” it noted.

The new proposal would reduce various procedural deadlines with the ultimate aim of resolving cases within 10 months or less.

Currently, the average case takes around 15 months to resolve, and cases under the voluntary program are resolved in an average 13.4 months, it reported.

“Relative to the current program, the proposal would benefit parties who are seriously ill or at least 75 by codifying shorter arbitration deadlines,” FINRA said in the proposal. “This would reduce the length of the arbitration and help these parties to meaningfully participate in the proceeding.”

This, in turn, may improve the efficiency of FINRA’s arbitration program, and bolster investor protection, it also suggested.

The deadline for providing feedback on the proposal is May 16.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.