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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, December 12, 2012

SEC Approves FINRA Rule Change on Use of Subpoenas and Orders of Appearance in Arbitration

The SEC has approved a non-controversial FINRA rule change relating to the use of subpoenas and orders of appearance in arbitration proceedings.  Specifically, the rule change amends the Customer and Industry Codes of Arbitration Procedure (1) to provide that when FINRA member firms and/or
employees or associated persons of FINRA members who are parties to an arbitration (collectively, “Member Parties”) seek the appearance of witnesses by, or the production of documents from, FINRA members (and individuals associated with the member) who are not parties to the arbitration (collectively, “Non-Party Members”), FINRA arbitrators shall (unless circumstances dictate otherwise) issue orders for the appearance of witnesses or the production of documents, instead of issuing subpoenas; (2) to add procedures for any non-party (Non-Party Member or otherwise) receiving a subpoena to object to the subpoena; (3) to provide that if an arbitrator issues a subpoena to a Non-Party Member at the request of a Member Party, the Member Party making the request is (unless the panel directs otherwise) responsible for paying the reasonable costs of the appearance of witnesses by or the production of documents from the Non-Party Member; (4) to add procedures for any party to an arbitration to file a motion requesting arbitrators issue an order for the appearance of any employee or associated person of a FINRA member (collectively, “Associated Persons”) or the production of documents from such Associated Persons or members; (5) to add procedures for any party to an arbitration receiving a motion for an order and draft order to object to the order; (6) to add procedures for how the party to the arbitration that requested the order must serve the order (if issued); (7) to add procedures for any Non-Party Member receiving an order to object to the order; and (8) to add procedures for how parties to an arbitration must share documents received in response to an order issued to a Non-Party Member. ( Download 34-68404)

http://lawprofessors.typepad.com/securities/2012/12/sec-approves-finra-rule-change-on-use-of-subpoenas-and-orders-of-appearance-in-arbitration.html

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