FINRA Reminds Members Of Requirements For Client Account Arbitration Agreements

FINRA reminded member firms that FINRA Rule 2268 ("Requirements when Using Predispute Arbitration Agreements for Customer Accounts") establishes minimum disclosure and other requirements as to mandatory arbitration provisions in customer agreements.

Specifically, FINRA reminded firms that customer agreements cannot:

• be used to restrict the location of an arbitration hearing (see FINRA Rule 12213, "Hearing Locations");
• be used to change the statute of limitations, as FINRA Rule 12206 ("Time Limits") provides a six-year time limit for arbitration claims to be submitted;
• limit a customer's right to pursue a class action in court, as set forth in FINRA Rule 12204 ("Class Action Claims");