FINRA proposed a rule to bar brokers and their firms from requiring customers to consent to the removal of a dispute from the Central Registration Depository as a condition of settling the disagreement.

In a release, FINRA said the proposal was intended to ensure that the CRD system continues to contain relevant information.  The proposal was approved by FINRA’s board of governors.  It was submitted to the SEC, who signed off on the rule change.  The Rule went into effect on July 30, 2014.

Candidly, this is going to be a disaster for the BDs and brokers.  Many arbitration claims have little or no merit and cause stains on the records of many good people.  Expungements are the only way to even the playing field.