FINRA Proposes Changes to Definitions of Non-Public and Public Arbitrators

The proposal expands the “non-public” arbitrator definition by: (1) requiring individuals who worked in the financial services industry for any duration to always be classified as non-public arbitrators; (2) adding new categories of financial industry personnel who qualify as non-public arbitrators; and (3) requiring professionals (e.g., attorneys and accountants) devoting a significant part of their business to representing or providing services to parties in disputes concerning investments or employment relationships to be classified non-public.  With respect to the “public” arbitrator definition, the proposal (1) adds criteria disqualifying persons from being classified or reclassified as a public arbitrators, and (2) extends “cooling off” periods for certain professionals – such as those in item 3 above – from being reclassified as public arbitrators.  The proposed changes are pending before the SEC.