Table of Contents
SERIES 24 | FINANCIAL REGULATION COURSES
FINRA Rule 9221 governs the respondent's right to a hearing in FINRA disciplinary proceedings — the mechanism through which a respondent who disputes the charges against them exercises the fundamental procedural right to present their case before an independent Hearing Panel rather than having the matter decided on the papers alone.
The rule establishes four operational provisions: the respondent's ability to request a hearing, propose a hearing location, and request a Market Regulation Committee Panelist simultaneously with filing their answer; the mandatory grant of a hearing once properly requested; the waiver consequence when no hearing is requested with the answer; the Hearing Officer's independent authority to order a hearing absent any respondent request; the Panel's authority to manage proceedings when some but not all respondents request hearings; and the twenty-eight-day advance notice requirement for all hearing dates.
Together these provisions define the critical transition from the pleadings stage to the hearing stage — the moment when a disciplinary proceeding either advances to a full evidentiary hearing or proceeds to a decision on the documentary record.
FINRA Rule 9221 sits within the 9220 Request for Hearing; Extensions of Time, Postponements, Adjournments subsection of the 9200 Disciplinary Proceedings section of the 9000 Code of Procedure series. It was originally adopted effective April 15, 1987 in the predecessor NASD framework, amended by SR-NASD-97-28 effective August 7, 1997, amended by SR-NASD-97-81 effective January 16, 1998, and last amended by SR-FINRA-2008-021 effective December 15, 2008 as part of the consolidated FINRA rulebook transition announced in Regulatory Notice 08-57. One selected notice is associated with the rule — 08-57.
FINRA Rule 9221(a) establishes the respondent's hearing right and the three initiatives available at the time of answer filing.
The first initiative — the hearing request itself — is the pivotal act. With the filing of their answer, a respondent may request a hearing. The filing-of-the-answer timing is not incidental — it is the Code's deliberate choice of the moment at which the hearing right must be exercised. The answer is the respondent's first formal act within the disciplinary proceeding; by requiring the hearing request to accompany the answer, FINRA Rule 9221 ensures that the proceeding's structure — contested hearing or record-based decision — is known to all parties and the Adjudicator at the earliest possible stage, enabling efficient scheduling and resource allocation.
The consequence of a proper hearing request is categorical and unconditional: if a respondent requests a hearing, a hearing shall be granted. This mandatory grant — the word shall rather than may — reflects the fundamental due process principle that persons facing serious regulatory sanctions are entitled to a meaningful opportunity to be heard before an impartial decision-maker. FINRA cannot deny a hearing to a respondent who has properly requested one, regardless of whether FINRA believes the complaint's allegations are so clearly established that a hearing would be unnecessary. The hearing right is absolute.
The second initiative — proposing an appropriate hearing location — mirrors the Department of Enforcement's authority under FINRA Rule 9212(a)(2)(A) to propose a location at the time of complaint issuance. A respondent's location proposal, combined with Enforcement's complaint-time proposal, gives the assigned Hearing Officer the parties' preferences as inputs to the scheduling decision. OHO retains authority to set the hearing location through the Hearing Officer's FINRA Rule 9147 full procedural authority — the respondent's proposal is advisory rather than binding.
The third initiative — requesting a Market Regulation Committee Panelist — is available when the complaint alleges at least one cause of action involving a violation of a statute or rule described in FINRA Rule 9120(u). This respondent request mirrors Enforcement's authority under FINRA Rule 9212(a)(2)(B) to make the same request at complaint issuance. FINRA Rule 9231(a)(2) provides that when such a request is made, the Chief Hearing Officer may select a Panelist who currently serves on or previously served on FINRA's Market Regulation Committee within the four years preceding the complaint. The respondent's ability to make this request independently of Enforcement's complaint-time proposal ensures that respondents in complex market regulation cases can advocate for the benefit of specialized market expertise on the Hearing Panel without being dependent on whether Enforcement made the request itself.
The waiver consequence in FINRA Rule 9221(a) — that a respondent who fails to request a hearing with the filing of their answer waives the right to a hearing — is one of the most practically consequential provisions in the entire 9200 series. The waiver is automatic — it does not require any affirmative action by the respondent to waive, only inaction. A respondent who files a substantive answer addressing every allegation in the complaint but neglects to include a hearing request has inadvertently waived their right to present live testimony, cross-examine witnesses, and introduce exhibits at a hearing.
The good cause exception preserves an escape from inadvertent waiver: a Hearing Officer, Hearing Panel, or Extended Hearing Panel may grant a later-filed motion requesting a hearing for good cause shown. Good cause in this context typically requires a showing that the failure to request a hearing with the answer was genuinely inadvertent rather than strategic, that no prejudice would result to other parties from granting the late hearing request, and that a hearing is necessary to protect the respondent's due process interests in light of the specific charges and evidence. The good cause exception is discretionary — the Adjudicator may grant the late request, not shall — and its availability does not eliminate the practical importance of including a hearing request with every answer as a matter of standard practice.
For practitioners advising respondents in FINRA disciplinary proceedings, the waiver rule creates a near-absolute rule: every answer should include a hearing request unless the respondent has made a fully informed, deliberate decision to waive the hearing right and proceed on the documentary record. Inadvertent waiver through failure to include a hearing request is one of the most avoidable and consequential procedural errors in FINRA disciplinary practice.
FINRA Rule 9221(b) grants the Hearing Officer independent authority to order a complaint set down for hearing even in the absence of a respondent's hearing request. This authority reflects the Hearing Officer's role as the guardian of the fairness and integrity of the disciplinary proceeding — the Hearing Officer may conclude that a hearing is necessary to properly adjudicate the matter even when the respondent has not requested one or has waived the right.
The circumstances that might lead a Hearing Officer to exercise this independent authority include cases where the charges are serious and a record-based decision would not provide adequate process for a full assessment of the evidence, cases where the record as submitted contains unresolved factual disputes that cannot be adjudicated without live testimony, or cases where the public interest in the full airing of significant enforcement allegations warrants a hearing that the respondent's waiver would otherwise prevent. The Hearing Officer's independent authority ensures that the hearing right is not entirely in the respondent's control — FINRA's interest in the fair and complete adjudication of disciplinary charges may independently warrant a hearing even when the respondent has not requested one.
FINRA Rule 9221(c) addresses the procedural complexity that arises in multi-respondent proceedings when not all respondents make the same hearing election. Two scenarios require specific treatment.
The first scenario — all respondents waive a hearing — gives the Hearing Panel or Extended Hearing Panel the option to either order a hearing despite the universal waiver, or consider the matter on the record as defined in FINRA Rule 9267. The panel-level authority to order a hearing even when all respondents have waived reflects the same public interest consideration that underlies the Hearing Officer's FINRA Rule 9221(b) independent authority — the Panel may conclude that a hearing is necessary to properly adjudicate the matter regardless of the parties' preferences.
The second scenario — fewer than all respondents waive a hearing — creates a practical challenge: how should the proceeding accommodate the mixed hearing elections of co-respondents whose cases are legally and factually intertwined? FINRA Rule 9221(c) provides two options. The first is to order a hearing as to all respondents — essentially overriding the waiving respondents' election in favor of a unified proceeding that avoids the complexity of bifurcated proceedings. The second is to conduct a hearing only as to those respondents who requested one and consider the matter on the record as to those who waived — preserving each respondent's individual election at the cost of a more complex bifurcated adjudication. The choice between these options is discretionary, exercisable by the Hearing Officer, Hearing Panel, or Extended Hearing Panel based on the specific circumstances of the multi-respondent case.
FINRA Rule 9221(d) requires the Hearing Officer to issue a formal notice of hearing stating the date, time, and place of the hearing and whether it will be held before a Hearing Panel or an Extended Hearing Panel, served on all parties at least twenty-eight days before the hearing. This mandatory advance notice period — measured under FINRA Rule 9138's computation of time rules — ensures that all parties have adequate time to complete pre-hearing preparation, arrange witness availability, finalize exhibits, and prepare opening statements and examination outlines before the hearing begins.
Two exceptions to the twenty-eight day notice requirement exist. The first — extraordinary circumstances — permits the Hearing Officer to issue shorter notice in its discretion when the circumstances of the specific case genuinely warrant expedited scheduling. Extraordinary circumstances in this context are genuinely rare — they would need to involve some compelling urgency that makes the normal twenty-eight day preparation period impracticable, not merely administrative convenience or a desire for a faster proceeding. The second — party waiver — permits the parties collectively to waive the notice period, enabling a mutually agreed accelerated schedule when all parties are prepared to proceed more quickly than the twenty-eight day standard would otherwise allow.
The notice must specify whether the hearing will be before a Hearing Panel or an Extended Hearing Panel — information that is operationally important for all parties because an Extended Hearing Panel has additional members whose identities and qualifications must be assessed for potential conflicts under FINRA Rule 9234 and whose presence affects the dynamics and logistics of a complex multi-day proceeding.
The hearing request under FINRA Rule 9221 is the single most consequential act a respondent takes after filing their answer. It determines whether the disciplinary proceeding advances to an evidentiary hearing — with all the preparation, discovery, witness examination, and documentary evidence presentation that entails — or proceeds to a decision based solely on the written record. This bifurcation of the proceeding into hearing and non-hearing tracks is the Code's recognition that not every disciplinary matter requires a full evidentiary hearing. Some respondents who have executed AWCs have already resolved their matters without reaching FINRA Rule 9221 at all. Others who dispute the charges but face clearly documented violations may choose a record-based defense over a contested hearing. Still others who contest both the factual allegations and the legal theories will exercise the hearing right to present their full case before the Panel.
The practical significance of the hearing right extends beyond the proceeding itself. A respondent who exercises the hearing right and loses has a complete appellate record — the full transcript, exhibits, witness testimony, and Hearing Panel decision — that can be challenged before the NAC under FINRA Rule 9311 and ultimately before the SEC and federal courts. A respondent who waives the hearing right proceeds on the documentary record and may have a more limited appellate posture given the absence of live testimony. The decision to request or waive a hearing is therefore not merely a procedural choice but a strategic decision with significant consequences for the respondent's ultimate appellate options.
FINRA Rule 9221 operates at the intersection of FINRA Rule 9215's answer obligation and FINRA Rule 9222's scheduling flexibility framework. The hearing request must be made with the answer under FINRA Rule 9215 — the two rules are operationally inseparable from the respondent's perspective, since failure to include the hearing request in the answer triggers the waiver under FINRA Rule 9221(a). Once a hearing has been requested and the Hearing Officer issues the FINRA Rule 9221(d) notice, FINRA Rule 9222's extension, postponement, and adjournment framework becomes operative for all scheduling modifications that occur between the notice and the hearing's completion.
FINRA Rule 9221 is tested on the Series 24 General Securities Principal examination as the foundational hearing right rule of the disciplinary proceeding — the rule that determines whether a proceeding advances to a contested hearing or proceeds on the record, and that establishes the key procedural requirements for exercising, waiving, and preserving the hearing right.
The key points to retain are these: FINRA Rule 9221 permits respondents to simultaneously request a hearing, propose a hearing location, and request a Market Regulation Committee Panelist with the filing of their answer; if a respondent requests a hearing it shall be granted — the grant is mandatory and unconditional; a respondent who fails to request a hearing with their answer waives the right unless the Adjudicator grants a later motion for good cause shown — this waiver is automatic and one of the most consequential procedural consequences in the entire Code; the Hearing Officer may independently order a complaint set down for hearing even absent any respondent request; when fewer than all respondents request a hearing the Adjudicator may either order a hearing as to all respondents or bifurcate the proceeding conducting a hearing only for those who requested one while deciding the others on the record; the Hearing Officer must issue a notice of hearing stating date, time, place, and Panel type served on all parties at least twenty-eight days before the hearing unless extraordinary circumstances warrant shorter notice or the parties waive the period; and the rule was adopted originally effective April 15, 1987 and last amended December 15, 2008 through SR-FINRA-2008-021.
