 NASDR's Arbitration Procedures
Although most business in the securities industry is completed without a problem, disputes
and controversies will occasionally arise. Such disputes and controversies can be resolved
by impartial arbitration at one of the organizations listed in the NASDR's Services
Directory. Arbitrations are conducted in accordance with the Uniform Code of Arbitration
(Uniform Code) as developed by the Securities Industry Conference on Arbitration and the
rules of the sponsoring organization where the claim is filed.
There are some differences among the rules of the sponsoring organizations, such as,
who may serve as public arbitrators, the availability of prior awards, and whether your
name will be made publicly available. Any questions regarding arbitration may be addressed
to the Directors of Arbitration or their staff at the sponsoring organizations. In
addition to initiating an arbitration, investors may file their complaints with the
appropriate regulatory authorities, such as the Securities
and Exchange Commission, state securities commissions, or one of the self-regulatory
organizations listed in the Services Directory, when they believe there has been fraud or
that other investors may be at risk. The regulatory agencies may then investigate the
complaint and, if warranted, censure, fine, or suspend a wrongdoer.
This information is designed to assist prospective parties and their attorneys by
explaining arbitration procedures and is not designed to give legal advice to any party or
to anyone who contemplates use of these procedures. The procedures were developed for
parties who represent themselves in an arbitration proceeding as well as those represented
by counsel. The information here explains the procedures set forth in the rules and
answers questions regarding them but is not an interpretation of, or a substitute for, the
rules. We recommend that prospective parties carefully read the rules.
What Is Arbitration?
Arbitration is a method of having a dispute between two or more parties resolved by
impartial persons who are knowledgeable in the areas in controversy. Those persons are
called arbitrators. Arbitration of broker/dealer disputes has long been used as an
alternative to the courts because it is a prompt and inexpensive means of resolving
complicated issues. There are certain laws governing the conduct of an arbitration
proceeding that must be considered by those planning to use arbitration to resolve the
dispute. Most importantly, perhaps, is the fact that an arbitration award is final and
binding, subject to review by a court only on a very limited basis. Parties should
recognize, too, that in choosing arbitration as a means of resolving a dispute, they
generally give up their right to pursue the matter through the courts.
What Disputes Are Eligible For Arbitration?
In considering whether to initiate arbitration, it is important to keep in mind that,
generally, a public customer has a right to require a broker/dealer to submit for
arbitration only disputes relating to or arising out of the business activities of the
broker/dealer.
When deciding where to file your claim, you should determine which self-regulatory
organization (SRO) supervises the markets where the transaction occurred or the securities
are listed. The Uniform Code provides that an SRO may, with the consent of the claimant,
refer a case to the appropriate forum where the transaction occurred or the securities are
listed.
An additional factor to be noted is that a controversy is not eligible for submission
to arbitration if six or more years have elapsed from the date of the event giving rise to
the dispute. The arbitrators also may dismiss a claim barred by shorter applicable state
or federal statutes of limitations. If there is a question about the statute of
limitations, you should consult an attorney.
Even after a customer has signed the agreement to arbitrate, the customer may request
either the sponsoring organization or the arbitrators to permit that customer to proceed
with his or her claim in court. The customer should be aware, however, that in most cases
the sponsoring organization and the arbitrators will retain jurisdiction and proceed with
the arbitration.
A newly adopted section of the Uniform Code states that a claim submitted as a class
action shall not be eligible for arbitration. The rule also sets forth the circumstances
where a claim encompassed by a putative or certified class action may or may not be
eligible to be filed in arbitration. For further guidance you should refer to the rule and
discuss its application to a particular case with the staff of the SRO where you intend to
file your claim.
Who Are The Arbitrators?
Arbitrators are impartial persons who are knowledgeable in the areas in controversy. Each
sponsoring organization maintains a roster of individuals whose professional
qualifications and experience qualify them for service as arbitrators. The arbitrators are
not employees of the sponsoring organization and they, not the sponsoring organization,
will decide your dispute. The arbitrators do, however, receive an honorarium from the
SROs.
The Director of Arbitration will appoint a panel, usually consisting of one or three
arbitrators. Unless a customer elects otherwise, the majority of the members of such
panels are individuals referred to as "public arbitrators" who are neither
associated with nor employed by a broker/dealer or securities industry organization.
The Director of Arbitration will inform the parties of the names and business
affiliations of the selected arbitrators, their employment histories for the last 10
years, as well as any conflict information disclosed pursuant to the Uniform Code. Some
parties are interested in previous awards issued by prospective arbitrators. Each
sponsoring organization has developed procedures to make available information on public
customer awards issued since May 1989.
Can I Be Represented By An Attorney?
Parties have an absolute right to be represented by an attorney and may do so at any stage
of the arbitration. Parties should be aware that, even if they do not elect to be
represented by counsel, the other party may have an attorney, and they can assume that
broker/dealers will be represented by an attorney.
Any party represented by counsel should notify the Director of Arbitration of the
counsel's name and address either in the Statement of Claim or the Statement of Answer or
by a separate written notice. After such notification, communications concerning the case
will be addressed to the counsel.
The sponsoring organizations cannot recommend or provide counsel in the arbitration nor
can employees of that organization provide legal advice. Parties who do not have counsel
and wish to be represented may want to contact the local bar association for a referral.
How Is Arbitration Begun?
To begin arbitration, the prospective claimant must do the following:
(1) Statement of Claim - File with the Director of Arbitration a typewritten or
printed document stating the claim. This document should set forth the details of the
dispute, including all relevant dates and names, in a clear, concise, and chronological
fashion and should conclude by indicating what relief (e.g., money damages in a specific
amount, performance of a particular agreement, interest, etc.) is requested. The claimant
should attach copies of documents and supporting materials as exhibits to the Statement of
Claim. The claimant should provide sufficient copies for each party, the arbitrators, and
the self-regulatory organization.
(2) Small-Claims Procedures - If the amount of the claim is $10,000 or less, the
claim will be processed under the Simplified Arbitration Procedures. In public customer
disputes, unless the public customer requests a hearing, the claim will be decided solely
on the basis of reading the parties' submissions. The arbitrator, however, also may
request a hearing or require a party to submit additional documentation. Parties may ask
to submit additional documents to an arbitrator who is deciding the case without a
hearing.
(3) Service of Pleadings - After the initial Statement of Claim is served by the
Director of Arbitration, it is each party's responsibility to provide every other party
directly with any further pleadings, motions, or correspondence. In addition, it is each
party's responsibility to simultaneously provide sufficient copies directly to the
sponsoring SRO for the arbitrators and its files. Service of the filings and
correspondence on the sponsoring SRO and the other parties should be made on the same date
and by the same means (i.e., via overnight mail, facsimile, etc.)
(4) Counsel - State whether the claimant will be represented by an attorney and,
if so, the attorney's name, address, and telephone number.
(5) Location - State where the claimant wants the case to be heard and the
reasons for that choice. The actual decision as to place of hearing is made by the
Director of Arbitration. Arbitrators can be empaneled in many of the major urban areas
throughout the country, but consideration generally will be given to a number of factors,
including the convenience of the parties, the availability of necessary records or
witnesses, and the availability of qualified arbitrators. Generally, in public customer
cases, the hearing location is close to where the customer resided when the dispute arose
regardless of a predispute agreement to the contrary.
(6) Complex Cases - In appropriate cases, parties may request special services
such as mediation, findings of facts and conclusions of law, expedited hearings, and the
appointment of arbitrators with special qualifications. Parties seeking special or
additional services should advise the sponsoring SRO at the earliest time possible.
Additional fees may be charged for these services. In many complex cases, the parties may
desire block scheduling of hearing dates. To the greatest extent possible, such cases will
be scheduled in three day blocks.
(7) Arbitrators - The proposed panel will be composed of a majority of persons
from outside the securities industry. If a public customer would like a panel consisting
of a majority of arbitrators from the securities industry, he or she should indicate that
preference in writing when filing the claim.
(8) Submission Agreement - Complete and return three signed and notarized copies
of the Submission Agreement provided by the sponsoring organization. By signing the
Submission Agreement, the claimant agrees to submit the dispute to arbitration and to
abide by the decision (the "award") of the arbitrators. The claimant also agrees
to be bound by the decision of the arbitrators with regard to any counterclaim (a claim
against the claimant) permitted under these procedures that may be brought by an opposing
party. Once a Submission Agreement has been signed, the procedures and timing set out in
the Uniform Code become operative and binding. Generally, parties may not withdraw the
Submission Agreement and Claim without the consent of either the other parties or the
arbitrators.
(9) Filing Fees and Deposits - Include a check or money order made payable to
the sponsoring organization for the appropriate non-refundable filing fee and hearing
session deposit. Where multiple hearing sessions are scheduled or conducted the
arbitrators are authorized to require additional hearing session deposits by one or more
parties. Additional deposits also may be required to be made for prehearing conferences
with an arbitrator and for the postponement of a scheduled hearing date after the
arbitrators have been selected. The arbitrators will determine in the final award if these
deposits will be returned or assessed to another party. See the arbitration rules of the
sponsoring SRO for the definition of a hearing session, as well as the appropriate fee and
deposit.
(10) Disclosure of Arbitration Award - At some sponsoring organizations, public
customers must state in writing whether they either permit or decline to permit the
inclusion of their names in the public version of the award.
(11) Incomplete Filing of a Claim - A filing may be returned if it does not
comport with the rules.
The Statement of Claim, with exhibits, Submission Agreement, and non-refundable filing fee
and hearing session deposit should be submitted to the Director of Arbitration of the
sponsoring organization at the address listed at the end of this pamphlet. All pleadings,
correspondence, and exhibits after the claim is served must be sent to all parties
directly with sufficient additional copies sent to the Director of Arbitration for the
arbitrators and for the Arbitration Department.
What Happens After The Claim Is Filed?
Once the Statement of Claim has been received, the Director of Arbitration will send it to
the opposing party (the "respondent"). Any member (e.g., brokerage houses) of an
organization listed in the Services Directory may be a party in an arbitration proceeding.
Similarly, an employee and/or representative of any such member also may be named as a
party.
Following the receipt of the claim, the respondent has 20 calendar days in the case of
a small-claim arbitration and 20 business days in all other arbitrations to provide an
answer, unless an extension of time has been granted by the Director of Arbitration. It is
within the discretion of the Director of Arbitration to grant such extensions even over
the objection of a party. However, the Director of Arbitration will consider the objection
when determining the length of the extension.
The respondent may assert a related counterclaim as part of its answer, or may file a
claim against a third party; that is, a claim against another person who may bear
responsibility for any of the alleged damages. Generally, a claim is considered to be
related if it pertains to the customer's account at the broker/dealer. In support of its
defense or counterclaim, the respondent should attach copies of documents and supporting
materials to its answer.
The respondent also should send to each party an executed Submission Agreement and a
copy of the respondent's answer and any counterclaim. The respondent's executed Submission
Agreement and answer shall also be filed with the Director of Arbitration, with additional
copies for the arbitrator(s) along with any deposit required under the Schedule of Fees.
On receipt of an answer containing a counterclaim, the claimant has 10 calendar days in
the case of a small-claim arbitration and 10 business days in all other arbitrations to
file a reply to any counterclaim. The claimant also should send to each party a copy of
the reply to a counterclaim. The reply also shall be filed with the Director of
Arbitration with additional copies for the arbitrators.
Service on a party may be effected by mail or other means of delivery. Filing with the
Director of Arbitration should be made on the same date and by the same means as service
on a party.
Appointment Of Arbitrators
Lists of arbitrators will be generated using the new Neutral List
Selection System (NLSS) software developed by NASD Regulation. Using the
new NLSS, arbitrator lists are generated neutrally and qualified and
available arbitrators "rotated" through the system. Parties
receive the lists of arbitrators that have been developed neutrally and
rank the listed arbitrators according to the party’s preference. This
process gives the parties a significant voice in the composition of
their panel.
For investor disputes with a three-person arbitration panel, each
side in the dispute is provided two lists of arbitrators—one public
and one industry—based on geographical location of the hearing.
Experience or expertise may also be considered if requested by the
parties. For smaller cases heard by a single arbitrator, the process
is the same except the parties are given a list of public arbitrators
only. The parties then rank, in order of preference, the two groups of
potential panelists. Each side may strike, without providing any
reason or justification, any arbitrator from either list. Similar
procedures are used for intra-industry disputes, where the parties may
receive both lists or only the industry list, depending on the type of
claim.
Once the parties have completed numerically ranking the arbitrators
provided by NLSS, the NASD Dispute Resolution staff again utilizes the
NLSS to consolidate and align the parties’ preferences. Arbitrators
are appointed according to the consolidated rankings.
The nationwide system will be in place for both investor and
intra-industry cases the second week of November.
The National Association of Securities Dealers is the largest
securities-industry self-regulatory organization in the United States.
Through its subsidiaries, NASD Regulation, Inc., and The Nasdaq Stock
Market, Inc., the NASD develops rules and regulations; provides a
dispute resolution forum; conducts regulatory reviews of members’
activities; and designs, operates, and regulates securities markets
all for the benefit and protection of investors.
Can I Challenge An Arbitrator?
A party has an absolute right to request that one arbitrator on the panel be replaced
without giving a reason for the request. This is called a peremptory challenge. This right
may be exercised by filing a written notice of a challenge with the Director of
Arbitration within the time period set in the rules. A party should supplement his or her
written notice with a telephone call to the sponsoring organization. The Director of
Arbitration may grant additional peremptory challenges if the interests of justice would
be served. In addition, each party is entitled to an unlimited number of challenges for
cause.
What Are Challenges For Cause?
Pursuant to the Code, an arbitrator is required to disclose any direct or indirect
financial or personal interest in the outcome of the arbitration as well as any existing
or past financial, business, professional, family, or social relationships that are likely
to affect impartiality. Persons requested to serve as arbitrators should disclose any such
relationships that they have with any party or its counsel, or with any individual whom
they have been told or have reason to believe will be a witness. They should also disclose
any such relationship involving members of their families or their current employers,
partners, or business associates. Pursuant to the Code, arbitrators are requested to make
reasonable efforts to identify these relationships. In addition, parties should advise the
Director of Arbitration if they are aware of any similar relationships involving a party,
counsel, or a potential witness that are likely to affect the impartiality of any
arbitrator(s).
A challenge for cause to a particular arbitrator will be granted where it is reasonable
to infer an absence of impartiality, the presence of bias, or, the existence of some
interest on the part of the arbitrator in the outcome of the arbitration as it affects one
of the parties. The interest or bias should be direct, definite, and capable of reasonable
demonstration, rather than remote, or speculative.
The following, though not exhaustive, are examples of circumstances where a challenge
for cause would be granted.
Opinion and Bias
- Arbitrator has a firm opinion or belief as to the subject of an action for which she/he
is an arbitrator.
- Arbitrator has a personal bias toward a party.
Business or Personal Relationships
- Arbitrator is or was related by blood or marriage to any party, its attorneys, or
witnesses.
- Arbitrator is or was guardian or ward, conservator or conservatee, master or servant,
employer or clerk, principal or agent, or debtor or creditor of either a party or an
officer of a corporation which is a party. Arbitrator is the parent, spouse, or child of
one who is related as above described.
- Arbitrator is a member of any party's family, a business partner of any party, a surety
or guarantor of the obligations of any party, or is currently a bondholder or shareholder
of any corporate party.
Previous or Current Involvement
- Arbitrator is adverse to a party, its attorneys, or witnesses, or has complained against
or been accused by any of them in another action, instituted or resolved during the past
five years.
- Arbitrator or any member, shareholder, or associate of her or his law firm has been in
the relation of attorney or client with, or adverse to, any party within three years of
the filing of the arbitration claim.
Financial Interest
- Arbitrator knows that she/he has, individually or as a fiduciary, or her/his spouse or
minor child residing in her/his household has a financial interest in the subject matter
in controversy or in a party to the arbitration proceeding, or any other interest that
could be substantially affected by the outcome of the arbitration proceedings.
Each arbitrator must swear or affirm to render a fair and just award based on the
documents and evidence presented by the parties. Also, no party should attempt to
communicate directly with any of the arbitrators. Such communication may render the
decision of the arbitrator invalid. Any communication for the arbitrators must be
addressed through the Director of Arbitration.
How Do I Prepare For A Hearing?
Parties must make every effort to prepare the case in advance of the hearing so that it
may be resolved promptly and justly. Preparation includes arranging for witnesses and
documentary evidence to be available for presentation to the arbitrators at the hearing.
The parties shall, at least 10 calendar days prior to the first scheduled hearing date,
serve on each other copies of documents (including graphs, charts, and recordings) they
intend to present at the hearing and identify witnesses they intend to present at the
hearing. Failure to comply with this requirement may result in the arbitrators excluding
any document not exchanged or witnesses not identified. Arbitrators will consider such
action at the request of a party. If all parties agree, they may submit exhibits in
addition to those in the Statement of Claim to the Director of Arbitration for forwarding
to the arbitrators prior to the hearing.
Each party is to bring sufficient copies of any documents it intends to introduce as
evidence at the hearings for each arbitrator and for the files of the SRO.
The parties should cooperate in the voluntary exchange of documents and information to
expedite the arbitration. Any request for documents or other information should be
specific, relate to the matter in controversy, and afford the party to whom the request is
made a reasonable period of time to respond without interfering with the time set for the
hearing. Document production and information exchange is to be accomplished within the
time set forth in the Uniform Code.
On the written request of a party or an arbitrator or at the discretion of the Director
of Arbitration, a prehearing conference will be scheduled. The Director of Arbitration
will set the time and place of a prehearing conference and appoint either a staff person
or an arbitrator to preside. The prehearing conference may be held by telephone, by
written submission, or in person. Under the rules, there are time tables for parties
either to produce requested information or to object to the production requests. If a
prehearing conference without an arbitrator does not resolve the outstanding issues, those
information-request disputes or issues will be referred to a single arbitrator prior to
the first hearing. Where possible, each party should submit to the SRO in advance of the
prehearing conference a concise outline of the outstanding issues to be resolved by the
single arbitrator. The single arbitrator has the authority to issue subpoenas, direct
appearances of witnesses and production of documents, set deadlines for compliance, and
issue other rulings that would expedite the arbitration proceedings or enable a party to
prepare its case.
To the extent possible, testimony and documentary evidence should be exchanged
voluntarily by the parties without the use of subpoenas. If a subpoena is necessary, the
arbitrators and any counsel of record have such power of subpoena as may be provided by
the law of the state where the hearing will be held or by the Federal Arbitration Act. All
parties must be given a copy of the subpoena on its issuance. If a party has an attorney,
the attorney should answer all questions concerning subpoenas. Parties without attorneys
may request that the Director of Arbitration ask the arbitrators to issue a subpoena. The
request should be in writing, should set forth why the subpoena is necessary and what
efforts the requesting party made to obtain the appearance of witnesses and the production
of documents without the use of the subpoena, and should include a copy of the subpoena
which the arbitrators are requested to issue. If the arbitrators issue a subpoena, the
requesting party has the obligation of serving the subpoena on the opposing party and
bearing the costs involved as provided by law of the state where the hearing will be held
or by federal law. The requesting party may need to employ the services of a professional
process server to actually serve the subpoena.
The procedures for the issuance and service of subpoenas vary. Parties may, therefore,
wish to consult with an attorney to insure that legal requirements in the applicable
jurisdiction are satisfied.
In addition to the subpoena process, in some instances the arbitrators have the power
to direct the appearance of persons employed in the securities industry and the production
of records in the possession or control of such persons. If the parties request the
arbitrators to use this power, they may be required to bear all reasonable expenses in
connection with such appearance or production. All such requests should be made in advance
of the hearing.
One final thought should be kept in mind when preparing for a hearing. The arbitrators
are experienced and knowledgeable individuals. They appreciate a clear presentation of the
case, free from repetition and irrelevancies.
How Are The Hearings Conducted?
The Director of Arbitration schedules the date of the hearing. The parties will be
notified in writing of the date and location of the initial hearing at least eight
business days in advance. A verbatim record is kept of the proceedings. A party that
elects to have the record transcribed shall bear the cost of such transcript unless the
arbitrators direct otherwise.
At the hearing, the parties must present their respective cases by testimony and
documentary evidence to the arbitrators. Claimants should document carefully the issues
involved and their proof of damages, and explain to the arbitrators how much in money
damages is being claimed and how they arrived at that figure. All hearings will be
conducted by the arbitrators in the manner they determine will most expeditiously permit
full presentation of the evidence and arguments of the parties.
Generally, the following procedures will be observed:
- The arbitrators and the witnesses will be sworn.
- Each party will be given an opportunity to make a brief opening statement, that is, a
brief outline of the issues involved and what facts that party intends to prove. A party
may waive the opening statement.
- The claimant will present facts to the arbitrators including relevant documents and
testimony to establish and prove his or her claim.
- The respondent will present his or her case in the same manner as the claimant.
Witnesses and parties who testify will be sworn and are subject to cross examination by
the opposing side and questioning by the arbitrators. The opposing party may object to any
evidence prior to its receipt by the arbitrators. Parties should bring sufficient copies
of documents for each of the arbitrators, other parties, and the representative of the
sponsoring organization. It is inappropriate to "testify" when questioning a
witness, and a party may object if another party does that. A party may offer an affidavit
in lieu of the live testimony of a witness. This may or may not be allowed by the
arbitrators. Parties should be prepared to explain why a witness cannot come to the
hearing and to explain whether the other party had an opportunity to examine the witness.
A party should be prepared to bring the witness if the affidavit is not allowed.
- Any counterclaim or other matter may be presented in the same way.
- Parties may present rebuttal evidence if appropriate.
- Closing statements may be presented and consist generally of final arguments by the
parties and brief summations of the testimony and other evidence introduced at the
hearing. A party should refer only to evidence already in the record and not use the
closing statement as an opportunity to present new evidence. A party may waive a closing
statement.
- The parties are to leave together at the end of the hearing.
- The arbitrators may proceed with a case even if a party does not appear and/or answer.
How Are The Parties Notified Of Decisions?
When the arbitrators have reached their decision and have signed an award, copies will be
mailed to the parties. The award shall be in writing and signed by a majority of the
arbitrators. The award may be entered by the prevailing party as a judgment in any court
of competent jurisdiction.
Arbitrators shall endeavor to render an award within 30 business days from the date the
record is closed. The Director of Arbitration shall endeavor to serve a copy of the award:
(i) by registered or certified mail upon all parties, or their counsel; or (ii) by
personally serving the award upon the parties; or (iii) by filing or delivering the award
as authorized by law.
The award will contain the names of the parties, the names of counsel, if any, the
dates the claim was filed and the award was rendered, the number and dates of the hearing
sessions, the location of the hearings, a summary of the issues including the type(s) of
any security or product in controversy, the damages and other relief requested, the
damages and other relief awarded, a statement of any other issues resolved, the names of
the arbitrators, and the signatures of the arbitrators concurring in the award. In
addition, all awards must be paid within 30 days of receipt unless a motion to vacate has
been filed in court. Awards will also bear interest if they are not paid within thirty
days of receipt, if the award is the subject of a motion to vacate that is denied or as
specified by the arbitrators.
The awards will be made publicly available. Arbitrators are not required to write
opinions or provide reasons for the award. A party, however, may request an opinion. This
request should be made no later than the hearing date. Some sponsoring organizations
delete from the public version of awards information that identifies either the
arbitrators or the parties. The decision of the arbitrators is final; that is, the
decision is subject to review by a court only on a very limited basis.
Important: It should be kept in mind that the arbitrators' decision will be based
solely and exclusively on the documents and related material provided by the parties to a
dispute. In the case of a hearing, the decision will be based on both the documents and
testimony presented at the hearing. It is therefore important that a party's case be
carefully and thoroughly prepared. As noted, this may be done either with or without the
assistance of counsel. Such preparation will ensure that all relevant facts and evidence
will be presented by the parties and, thus, considered by the arbitrators. Arbitrators are
not allowed to reconsider a decision because new evidence has been found after the award
was rendered.
In addition, it is the responsibility of the parties to submit briefs for any novel
theories of recovery and/or requests for special damages. In some cases, arbitrators may
require even parties without lawyers to support their claims by reference to the relevant
law.
Conclusion
Remember that you should carefully read the arbitration rules of the sponsoring
organization you have selected. This pamphlet is not a substitute for those rules. If you
have any questions regarding arbitration procedures or want a copy of those rules, contact
the Director of Arbitration of the sponsoring organization.
Glossary Of Terms
Answer - A respondent's written reply to a claim.
Arbitration/Counsel or Arbitration Administrator - The person at the sponsoring
organization who handles administrative matters in arbitration proceedings.
Arbitrator - A person chosen to decide disputes between parties.
Award - The written determination of the arbitrator(s).
Claim - A demand for money or other relief.
Claimant - A person making a claim.
Counsel - An attorney who advises and represents a party in an arbitration.
Counterclaim - A claim against the claimant.
Cross-Claim - A claim by a respondent against a co-respondent previously named by the
claimant.
Filing - Delivery to the Director of Arbitration of the statement of claim or other
pleadings, to be kept on file as a matter of record and reference.
Panel - The arbitrator(s) who decide(s) a dispute.
Party - A person or broker/dealer making or responding to a claim in an arbitration
proceeding.
Pleadings - The claim, answer, counterclaim, and/or third-party claim and/or
cross-claim filed in an arbitration.
Respondent - The person against whom a claim is made.
Service - Delivery of the statement of claim or other pleadings to those parties named
in the arbitration.
Third-Party Claim - A claim by the respondent against a party not already named in the
proceeding.
Last updated December 1994.
This information has been prepared by the Securities Industry Conference on Arbitration
(SICA), a group composed of representatives of various self-regulatory organizations, the
Securities Industry Association, and public members. SICA established a uniform system for
the resolution of disputes involving investors and broker/dealers, which has been adopted
by each of the self-regulatory organizations.
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