The Expert's Examiner

April 9, 2019

FINRA on January 15 posted to its Website the third and final status report on the Authority’s review and implementation of the recommendations made by the FINRA Dispute Resolution Task Force (“DRTF”), which was established by FINRA's Board in 2014 to deliver recommendations to enhance the transparency, impartiality and efficiency of FINRA's Office of Dispute Resolution and the arbitration and mediation services it provides. The group’s 70-page Final Report was announced in a Press Release in late 2015. The first DRTF status report prepared by the staff issued September 2016 (SAA 2016-38 (Oct. 12)) and the second in February 2017 (SAA 2017-06 (Feb. 8)). The 15-page Final Status Report dated January 15, 2019 states that FINRA staff and its National Arbitration & Mediation Committee (“NAMC”) reviewed and considered each recommendation, often consulting with “various interested parties, including investor and industry counsel.” The headline? Over half of the DRTF’s 51 recommendations were adopted in full, a quarter took an alternative approach, and several more remain in progress. Only about five percent were rejected. The Report is presented in a chart showing groups of recommendations (related to arbitrators; explained decisions; expungement; small claims; mediation; motions to dismiss; case management-procedural issues; public availability of information; transparency; frivolous motions to vacate; professionalism; and funding law school clinics); details; and actions taken. In the "actions taken" column, the scorecard is: implemented - 28, alternative approach implemented – 13; in progress – 7; not implemented – 3 (one of the “in progress” items was also an “alternative approach” recommendation). Where relevant, the Report explains why staff or the NAMC did not implement or deviated from a Task Force Recommendation.

(ed: *Kudos to FINRA! As we’ve said before, this endeavor is one of the forum's major transparency achievements. **An impressive 28 of the recommendations relate to arbitrators. ***The Report is heavily footnoted and has links to key items ****As for our mild criticisms, we would have appreciated a more expansive introduction and conclusion; the Report for the most part is the chart and there’s no summary of the results. The release of the Final Status Report was also not very well publicized; we didn’t see a Press release or news on social media or even the “What’s new?” part of FINRA’s Webpage.) (SAC Ref. No. 2019-04-04)