FINRA Announces Temporary Withdrawal of Proposed SEC Rule Filing

Several months have passed since the Financial Industry Regulatory Authority (FINRA) filed a number of proposed rule changes regarding the expungement request process with the Securities and Exchange Commission (SEC). In late May, FINRA announced that it had formally withdrawn from SEC consideration its proposed change to the arbitration process. For now, FINRA is taking additional time to assess whether the request for a specialized arbitration panel is necessary or even appropriate. Here’s what you need to know about this update.

Modifying the FINRA Expungement Process

According to a recently released statement, “FINRA is committed to limiting the expungement process so that it operates as intended—as an extraordinary remedy, only appropriate in limited circumstances when the CRD information is clearly inaccurate.” Initially, FINRA proposed establishing a specialized arbitration panel to decide proceedings involving brokers looking to expunge customer dispute information. Additionally, the rule filing would create several new safeguards for tracking and disclosing dispute information in the CRD system.

Why FINRA Withdrew the Proposed Change

Although FINRA has not provided a comprehensive account of its decision to temporarily withdraw this request from SEC consideration, it indicated that it arrived at this conclusion after consulting at length with SEC staff. For now, FINRA maintains that it intends to “further consider whether modifications to the filing are appropriate.” While FINRA makes this determination, it will continue to support a redesign of the current expungement process and to adopt a more “holistic view of the issues around expungement throughout the financial services industry.”

How an Experienced Securities Law Attorney Can Help

Even though FINRA claims that their dispute resolution process prioritizes fairness, unfair or even baseless claims can negatively impact your reputation and your future within the financial industry. If you’ve been the victim of a baseless disclosure, get in touch with a trusted securities law attorney to learn more about the expungement process. Together, you can work to prevent this harmful information from tainting your future.


If you want to learn more about the FINRA expungement process, call Judex Law LLC today at (303) 523-4022 to get started with an experienced and trusted securities law attorney.

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