On May 30, the Securities Exchange Commission approved amendments to the Financial Industry Regulatory Authority’s customer and industry arbitration rules to expand the time period for non-parties to respond to arbitration subpoenas and orders of appearance of witnesses or production of documents.
FINRA’s Codes of Arbitration Procedure for Customer and Industry Disputes (Codes) allow parties who seek discovery from a non-party to request that the panel issue an order of appearance of witnesses or production of documents if the non-party is subject to FINRA’s jurisdiction. Arbitrators are also authorized to issue a subpoena if the non-party is not subject to FINRA’s jurisdiction. If the panel decides to issue the order or subpoena, FINRA will transmit the signed order or subpoena to the moving party to serve on the non-party. If a non-party receiving an order or a subpoena objects to the scope or propriety of the order or subpoena, they may file written objections through the director of the Office of Dispute Resolution within 10 calendar days of receiving the order or subpoena.
The amendments extend the response time for non-parties to object to an order or subpoena from 10 calendar days of service to 15 calendar days of receipt of the order or subpoena. In addition, first-class mail is excluded as an option to serve documents on the non-party and as an option for the non-party to file the objection to the scope or propriety of the order or subpoena. Lastly, the amendments codify the current practice that the director send, at the same time, objections and responses to the panel after the reply date has elapsed, unless otherwise directed by the panel.
The amendments are effective for cases filed on or after July 1. FINRA’s regulatory notice is available here.