FINRA Implements New Rules April 3, 2017

Effective April 3, 2017, the Financial Industry Regulatory Authority (“FINRA”) will be implementing several new rule changes to both the customer and industry codes (“Rules”).  While the rule changes focus on the use of FINRA’s web based DR-Portal (“Portal”), there are a few additional broader changes that practitioners should be aware.

As of the effective date, all represented parties must file and serve documents in both customer and industry cases through the Portal, except discovery responses and productions and documents that concern third-parties (e.g. subpoenas, third-party claims).  Additionally, the Director will no longer serve Statement of Claims on non-customer respondents.  Instead, FINRA will send a Claim Notification Letter to the respondents, who will then need to retrieve the Statement of Claim from the Portal.

In addition to the Portal-specific rules, the following broader changes have been adopted:

  • All document responses and objections (pursuant to Rules 12507 and 13507) and responses to the FINRA document production lists (pursuant to Rule 12506) now must be served on FINRA, in addition to the opposing party.
  • FINRA has adjusted its rules (12100 and 13100) regarding service and receipt of documents on non-business days, such that documents received on Saturday, Sunday or any FINRA holiday are not considered received until the next business day. This will change the calculation of certain deadlines.  For example, under the existing rules if an Opposition to a motion were received on a Saturday, the Reply would be due the following Thursday (5 days).  Under the revised rules, the date of receipt would be marked as Monday and therefore the Reply would be due one week later on the following Monday.
  • FINRA has now also made service of documents by e-mail an acceptable form of service. Previously, e-mail was listed as a possible alternative form of service that could be acceptable with panel approval.

FINRA hopes the new rules expedite claims and simplify the arbitration process.  Click here to view the new FINRA Rules for April 2017 in their entirety.