SEC Approves Revised Discovery Guide for FINRA Arbitrations

Via the ADR Prof Blog, we learned the U.S. Securities and Exchange Commission (SEC) approved a revised Discovery Guide applicable to FINRA securities arbitration customer cases on Friday. The proposed rule change was filed with the SEC on July 12, 2010 and published for comment in the Federal Register on August 3, 2010.

The Commission received 55 comment letters on the proposed rule change. On February 8, 2011, the Commission received from FINRA a Response to Comments and Partial Amendment No. 1 to the proposed rule change.

According to the SEC,

The Commission believes that the revisions to the Discovery Guide will help reduce the number and limit the scope of disputes involving document production and other matters, thereby improving the arbitration process for the benefit of the public investors, broker-dealer firms, and associated persons who use the process. The revisions to the Discovery Guide are the result of over six years of consultation by FINRA with its constituents. The Commission also expects that further improvement of the process should be possible through the Discovery Task Force’s consideration of discovery issues as they arise.

The SEC seeks to solicit comments on Amendment No. 1, “and to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis.”

Written comments should refer to File Number SR-FINRA-2010-035 and may be submitted:

1. At the SEC’s website: http://www.sec.gov/rules/sro.shtml;
2. Via email to: rule-comments@sec.gov; or
3. Via regular mail (in triplicate) to: Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090.

Although not yet published, comments are due within 21 days from the date the new rule appears in the Federal Register. The SEC will post all comments on its website. Meanwhile, the full text of the rule change is currently available here.

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