Finra Uniform Submission Agreement

NASD`s Code of Arbitration Procedure requires respondents in NASD arbitration proceedings to comply with a consistent response and agreement (U.S.) when responding to the request. NASD has learned that some members and associates, cited as respondents in arbitration proceedings, neglect or refuse to sign a U.S. signature in time. If the United States is not signed and filed, this can cause confusion, lead to ancillary litigation and undermine the opposability of arbitration awards. The purpose of this communication is to remind members and associates who are respondents that filing a Member State is mandatory in the absence of a particular judicial challenge and that non-compliance may result in sanctions or disciplinary action. NASD staff have learned that some members and associates, cited as respondents, are neglecting or refusing to sign the United States. While these members and associates may believe that the U.S. signature is not necessary, since they are in any event required to submit to arbitration under the code, the non-signature of the United States may create unnecessary confusion or even incidental litigation on the part of the opposing party and jeopardize the eventual award of arbitration. For example, Section 13 of the Federal Arbitration Act (FAA) requires that an application for confirmation of an arbitration award contain the parties` arbitration agreement. While an applicant can prove that a member who did not export to the United States was nevertheless required to mediate in accordance with the NASD rules, U.S. non-enforcement may unnecessarily impede a complainant`s ability to seek confirmation of an arbitration award pursuant to FAA Section 13. The court held that Legaspy could not be successful in his application for violation of FINRA`s filing agreement or arbitration settlement, because the Federal Arbitration Act requires the arbitrator to ask procedural questions and „the question of whether] FINRA can or should be heard remotely is a procedural matter that will end , and not this jurisdiction, must rule. Finally, the court found that, while it could verify the Court of Arbitration`s procedural decision in the arbitration environment, the FINRA arbitration code allowed the panel to order a virtual hearing.

Each party may amend its initial submissions to respond to new evidence, claims or information provided by the other party in response to the documents. According to FINRA, changes can be made before the election of an arbitration committee. Once a body is appointed, the party wishing to amend its bids must obtain the approval of the panel. In Legaspy, two Legaspy clients filed arbitration proceedings against him, in accordance with Financial Industry Regulatory Authority (FINRA) rules, to recover nearly US$3 million for brokerage account losses. In accordance with FINRA rules, the parties signed a single filing agreement which provided that „in the case of a hearing, a hearing will be held at a time and place that can be determined by the Director of FINRA“ and that „arbitration is conducted in accordance with the FINRA arbitration regulation.“ An evidence hearing was originally scheduled for August 2020. However, due to the COVID 19 pandemic, FINRA cancelled the hearing and the Court of Arbitration ordered that the hearing be done remotely via Zoom. Legaspy objected that a zoom hearing was not possible because of the complexity of the problems, the large number of witnesses and documentary exhibits, and the complainants` needs for a translator. After the court quashed Legaspy`s objections, Legaspy appealed to the Federal Court to have the virtual hearing conducted on the grounds that it violated the parties` uniform filing agreement and FINRA conciliation settlement and refused legaspy a formal ruling.