Regulatory & Compliance | 08.13.26

FINRA Proposes Tweaks to Arbitrator-Selection Rule

by: Miriam Rozen

The Financial Industry Regulatory Authority (FINRA) has proposed changes to its arbitrator-selection rules for cases where the initial selection process fails to produce enough available panelists. Instead of requiring parties to accept randomly selected substitutes, the proposal would allow both sides to choose arbitrators from an entirely new list, giving them greater input over panel composition. FINRA said the existing “extended list appointment” process has been unpopular because parties have limited ability to challenge replacement arbitrators. The proposal would also formalize a $300 honorarium for every four hours of work by substitute arbitrators reviewing case records and hearing materials.

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