Securities and Financial Services

FINRA Office of Dispute Resolution Party Portal Now Required

FINRA Office of Dispute Resolution Party Portal Now Required

Amendments to the Financial Industry Regulatory Authority, Inc.’s ("FINRA’s") Customer and Industry Codes of Arbitration Procedure require that all parties (except for pro se customers) to FINRA arbitrations must use the FINRA Office of Dispute Resolution’s Party Portal ("Party Portal"). The Party Portal must be used to file initial statements of claim and to file and serve, answers, and most other pleadings and documents on FINRA and on all parties to the arbitration. As set forth in FINRA Regulatory Notice 17-03, "[t]the amendments are effective for all cases filed on or after April 3, 2017." Notice 17-03 (emphasis added).

FINRA has amended the Customer Code of Arbitration Procedure (the 12000 series of FINRA Rules) and the Industry Code of Arbitration Procedure (the 13000 series of FINRA Rules) to "require all parties, except pro se customers, to use the Party Portal to submit documents and view their arbitration case information." Notice 17-03 at 2. Pro se customers may agree to use the Party Portal but are not required to do so. Id. See also FINRA Rule 12300(a)(2). "When a party submits pleadings or documents through the Party Portal, the party has accomplished both filing on the director and, in most instances, service on all other parties and the arbitrators." Notice 17-03 at 2.

Parties must use the Party Portal to file all pleadings and documents with FINRA, including even those pleadings and documents that are served directly on pro se customers (or others) outside of the Portal. With limited exceptions, all documents and pleadings must be served through the Portal. The limited exceptions to mandatory service via the Portal include: (a) documents served on pro se customers who do not agree to use the Party Portal: (b) documents produced in response to discovery request or the Discovery Guide; (c) answers containing third-party claims; (d) amended pleadings adding a party to the case; (e) motions to amend the pleadings to add a new party; (f) non-party subpoenas; (g) arbitrator orders to non-parties to appear or for the production of documents; and (h) statements of claim seeking permanent injunctive relief. Id. at 4. In general, a party filing a document through the Party Portal must redact "an individual’s Social Security Number, tax payer identification number or financial account number to include only the last four digits of any of these numbers." FINRA Rule 12300(d)(1)(A); FINRA Rule 13300(d)(1)(A).

When a case is initiated through the Party Portal, claimants will be required to pay filing fees electronically via the Portal. See Notice 17-03 at 5. Once the statement of claim is filed, non-customer respondents will be served with a Claim Notification Letter, which will provide information on how to use the Party Portal to acquire a copy of the statement of claim and information about the arbitration. Id. at 3. FINRA will still initially serve customer respondents with statements of claim, and the customer’s pro se or represented status will determine whether or not usage of the Party Portal is required. Id. Once the initial pleadings are filed, the arbitrator selection process, which includes striking and ranking arbitrators, must also be completed through the Party Portal. Id. at 5.

The Party Portal must be used to file and serve discovery-related correspondence. Id. However, as noted previously, documents produced in discovery are not to be filed or served through the Party Portal, see Rule 12300(a)(3); Rule 13300(a)(2), but written discovery responses (such as written responses and objections to requests for production or information) must be served through the Portal, see Notice 17-03 at 3. Because correspondence to FINRA is considered to part of the case record, it too must be filed through the Party Portal. See id. at 4.

FINRA has amended its rules in both the Customer and Industry Codes to reflect these changes and to reflect the now-mandatory nature of the Party Portal. Amendments can be found in FINRA’s Rules on Definitions, Filing and Serving Documents, Service on Associated Persons, Filing and Serving an Initial Statement of Claim, Answering the Statement of Claim, Answering Counterclaims, Answering Cross Claims, Answering Third Party Claims, Amending Pleadings, and Arbitrator Rankings. The Rules concerning discovery and subpoenas have also been amended. These amended rules are available on FINRA’s website, as well as a Party Portal User Guide. FINRA Regulatory Notice 17-03 is also available on the website, and Attachment A to that Notice shows all of the amendments to the FINRA Rules related to the Party Portal.