FINRA Proposes Amending Procedures Relating to Motions to Dismiss in Arbitration

FINRA proposed amending FINRA Rule 12504 of the Code of Arbitration Procedure for Customer Disputes and FINRA Rule 13504 of the Code of Arbitration Procedure for Industry Disputes to provide that arbitrators may act upon a motion to dismiss a party or claim prior to the conclusion of a party's case in chief, if the arbitrators determine: (i) that the non-moving party previously brought a claim regarding the same dispute against the same party, and (ii) the dispute was fully and finally adjudicated on the merits and memorialized in an order, judgment, award or decision.

FINRA argues that adding the additional ground for arbitrators to act on motions to dismiss is appropriate because parties should not be subject to the legal fees associated with arbitrating claims that have been fully adjudicated in a prior proceeding.

Comments on the proposal must be submitted within 21 days after its publication in the Federal Register.