FINRA's new rules respond to concerns raised by investors about the neutrality of these personnel, according to the agency. Additionally, excluded hedge fund and mutual fund personnel must disassociate from their employers for at least two years before qualifying to serve as public arbitrators.
Other excluded persons include investment advisors, attorneys who work in the securities industry, and directors and officers of firms in the securities industry.
According to its website, FINRA maintains a roster of more than 6,000 arbitrators. FINRA has two classifications of arbitrators: public and non-public. Public arbitrators are select individuals who are not required to have knowledge of the securities industry while non-public arbitrators have a more extensive securities industry background.
For claims of
"We couldn't disagree more with this approach," according to
"Why would FINRA want to exclude professionals that actually know something about the securities industry? Is this plaintiff's argument about perceived neutrality actually supported by any empirical evidence?"
"FINRA intends to conduct a comprehensive review under the auspices of the
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