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Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

Is this FINRA’s First Play for RIA Oversight? Opening FINRA Arbitration to RIAs

Posted in Arbitration, Intra-Industry Arbitrations, Investment Adviser Regulation, Public Customer Arbitrations

FINRA is now permitting RIAs to participate in its arbitration process.  The details will be forthcoming.

Traditionally, FINRA arbitrations were for broker-dealers to resolve their disputes.  This is a significant opening for FINRA.  Nonetheless, FINRA claims it is ready for RIA cases if the parties agree.  Further, there are differences in standards under federal law for both.  One wonders if this would create confusion among arbitrators.  Interestingly, the SEC may have to provide approval for such a widening of arbitration.

In any event, this debate will be held alongside the on-going debate as to if there will be a SRO for RIAs.  It should make for a very interesting year.