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FINRA Opens Arbitration System to Registered Investment Advisors

David P. Meyer

FINRA Opens Arbitration System to Registered Investment Advisors, Attributes Expansion to Plethora of Attorney Requests

The Financial Industry Regulatory Authority, the largest dispute forum in the securities industry, will now hear arbitration cases involving registered investment advisors (RIAs), according to an announcement made last week at the annual meeting of the Public Investors Arbitration Bar Association in Austin, Texas.

Linda Fienberg, president of FINRA’s office of dispute resolution, told attendees that the self-regulatory organizationplans to formally announce the new FINRA policy soon.

Previously, FINRA only heard complaints between investors, brokerage firms, and individual brokers. Now, investment advisors will be able to use FINRA’s arbitration process as long as both parties agree to do so.

Though FINRA still wants to expand the powers of its oversight to include investment advisors, Fienberg said the new policy doesn’t stem from the organization’s quest for expansion.

“We're doing it because we had a lot of requests from attorneys,” she said, adding that several arbitration cases involving registered investment advisors are already working through FINRA’s arbitration system.

The actual date for the official announcement remains unknown.

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