FINRA Requests Comments on Proposed Amendments Related to the Expungement of Customer Dispute Information.

Last month, FINRA issued Regulatory Notice 17-42 requesting comments and proposing amendments to the procedures relating to the expungement of customer dispute information from the Central Registration Depository (“CRD”) system and FINRA BrokerCheck system.  The proposed amendments include significant substantive changes that impact the timing and procedures for reviewing expungement requests, including:

  • Requiring the associated person to appear at the hearing in-person or by videoconference (not telephonically);
  • Requiring a three-person arbitration panel to make a unanimous finding that expungement is appropriate under Rule 2080(b)(1) and that the “customer dispute information has no investor protection or regulatory value.”
  • Creating limitations on requests for expungements, including a one-year limitation period after an underlying customer arbitration settles to file an expungement request.  With regard to customer complaints, a one-year limitation period from the date the member firm initially reported the customer complaint to CRD.
  • Establishing a roster of public chairpersons with additional qualifications and training to decide expungement requests (Expungement Arbitrator Roster).

To read the complete regulatory notice, click here: Regulatory Notice 17-42 |   FINRA’s comment period expires February 5th.  For more information about expungements, please contact our office for a complimentary consultation.