Table of Contents
SERIES 24 | FINANCIAL REGULATION COURSES
FINRA Rule 9235 defines the authority of the Hearing Officer in FINRA disciplinary proceedings — the specific powers that the Hearing Officer exercises in their dual role as the administrative manager of the proceeding and the presiding officer of the Hearing Panel. The rule opens with a comprehensive general authority grant — the Hearing Officer shall have authority to do all things necessary and appropriate to discharge their duties — and then enumerates eight specific powers that represent the most operationally significant aspects of that general authority: conducting pre-hearing conferences, regulating the hearing's course, ordering oral argument, resolving procedural and evidentiary matters and non-dispositive motions, reopening hearings, creating and maintaining the official record, drafting the Panel's majority decision, and ruling on FINRA Rule 9285 motions for conditions or restrictions. A second paragraph addresses the temporary unavailability scenario in which the Chief Hearing Officer or Deputy Chief Hearing Officer may step in to exercise the Hearing Officer's authority without a formal replacement appointment. Together these provisions define the scope of the individual authority that the Hearing Officer brings to the collective adjudicative body — the authority that makes the Hearing Officer simultaneously the Panel's administrator and one of its three voting members.
FINRA Rule 9235 sits within the 9230 Appointment of Hearing Panel, Extended Hearing Panel subsection of the 9200 Disciplinary Proceedings section of the 9000 Code of Procedure series. It was adopted by SR-NASD-97-28 effective August 7, 1997, amended by SR-NASD-97-81 effective January 16, 1998, amended by SR-FINRA-2008-021 effective December 15, 2008, and most recently amended by SR-FINRA-2020-011 effective April 15, 2021 as announced in Regulatory Notice 21-09 — which added paragraph (a)(8) granting the Hearing Officer authority to rule on motions under FINRA Rule 9285 for conditions or restrictions on disciplined respondents during the pendency of appeals. Two selected notices are associated with the rule — 08-57 and 21-09.
The opening sentence of FINRA Rule 9235(a) — the Hearing Officer shall have authority to do all things necessary and appropriate to discharge their duties — is the foundational authority provision from which the eight enumerated powers flow. As the SEC's approval of SR-FINRA-2014-036 described the Hearing Officer's role: a Hearing Officer administers pre-hearing matters, including most motions, resolves procedural and evidentiary matters, oversees the settlement and discovery process, regulates the course of the proceeding, and drafts a decision representing the majority view of the Hearing Panel.
This general authority grant is the Hearing Officer's analog to FINRA Rule 9147's full procedural authority grant for all Adjudicators. Where FINRA Rule 9147 grants all Adjudicators full authority over procedural and administrative matters, FINRA Rule 9235 specifically defines the Hearing Officer's individual authority within the three-person Panel — the powers they exercise personally as the presiding officer rather than collectively with the Panelists. The in addition to the powers exercised by all members of the Hearing Panel formulation makes clear that the Hearing Officer's FINRA Rule 9235 powers supplement, rather than replace, the collective decision-making authority that the Hearing Officer shares with the Panelists.
The OHO topic index confirms the rule's operational breadth — FINRA Rule 9235 appears consistently in OHO orders addressing the full range of procedural and substantive management decisions that Hearing Officers make throughout disciplinary proceedings.
The authority to hold pre-hearing and other conferences and to require the attendance of at least one representative of each party who has authority to negotiate the resolution of issues in controversy is among the Hearing Officer's most practically significant powers. Pre-hearing conferences are the primary vehicle through which the Hearing Officer manages the transition from the pleadings stage to the hearing — establishing discovery schedules, resolving preliminary motions, setting the hearing agenda, addressing evidentiary disputes before they consume hearing time, and creating the framework within which the hearing will proceed.
The requiring-attendance-of-settlement-authority provision is particularly important. By mandating that at least one representative from each party with authority to negotiate resolution must attend pre-hearing conferences, FINRA Rule 9235(a)(1) ensures that pre-hearing conferences can function as genuine settlement or narrowing-of-issues sessions rather than merely procedural logistics meetings attended by junior staff without decision-making authority. A representative who cannot agree to anything without checking with supervisors cannot effectively narrow the issues in controversy at a pre-hearing conference — FINRA Rule 9235(a)(1) requires that someone with genuine authority be present.
FINRA Rule 9241 — Pre-Hearing Conferences — provides the detailed framework for how these conferences are conducted, but FINRA Rule 9235(a)(1) provides the Hearing Officer's authority to hold them and the attendance requirements that give them practical force.
The authority to regulate the course of the hearing is the Hearing Officer's core trial management power — encompassing every aspect of how the hearing session itself proceeds: managing the order of witness presentations and examination, setting time limits on argument and examination, making real-time rulings on evidentiary objections, maintaining order in the hearing room, managing exhibits, and addressing all other procedural matters that arise during the hearing itself. This authority is the operational expression of the Hearing Officer's role as the Panel's chair and presiding officer — they manage the hearing so that the Panel can efficiently and effectively receive and assess the evidence and argument that will form the basis of its decision.
The authority to regulate the course of the hearing is exercised pursuant to the FINRA Rule 9145(a) non-application of formal evidence rules — the Hearing Officer manages the hearing within the Code's flexible evidentiary framework rather than the rigid requirements of the Federal Rules of Evidence. This combination of broad procedural management authority and flexible evidentiary standards enables Hearing Officers to keep complex disciplinary hearings moving efficiently without being bogged down in technical admissibility debates.
The authority to order parties to present oral arguments at any stage of the disciplinary proceeding complements the FINRA Rule 9146(e) provision permitting Adjudicators to allow oral argument on motions. FINRA Rule 9235(a)(3) extends this authority beyond motions to any stage of the proceeding — pre-hearing, during hearing, or post-hearing — and makes it an affirmative ordering power rather than merely a permission. A Hearing Officer can require oral argument on a pre-hearing motion that the parties have briefed on the papers if the Hearing Officer determines that oral presentation would clarify the legal or factual issues. A Hearing Officer can require oral closing argument at the conclusion of evidence presentation even if the parties had intended to rely solely on post-hearing briefs. The ordering authority ensures that the Panel receives information in whatever format best serves its understanding of the issues.
The authority to resolve any and all procedural and evidentiary matters, discovery requests, and other non-dispositive motions — subject to any limitations set forth elsewhere in the Code — is the most frequently exercised of the Hearing Officer's enumerated powers. This provision covers the full universe of pre-hearing motion practice: discovery disputes and motions to compel under FINRA Rule 9252, protective order motions under FINRA Rule 9146(k), motions for extensions of time under FINRA Rule 9222, evidentiary objections, witness qualification disputes, subpoena enforcement matters under FINRA Rule 8210, and every other non-dispositive matter that requires a ruling during the proceeding's administrative phase.
The subject to any limitations set forth elsewhere in the Code qualifier is operationally significant — it preserves the limitations established in FINRA Rule 9146(j) that distinguish the Hearing Officer's individual authority from the full Panel's collective authority. Dispositive motions — motions for summary disposition of a cause of action under FINRA Rule 9264 — require majority vote of the full Hearing Panel, not a unilateral Hearing Officer ruling. The Hearing Officer may not summarily dispose of charges on their own authority even under FINRA Rule 9235(a)(4)'s broad grant. All other non-dispositive matters fall within the individual Hearing Officer authority that FINRA Rule 9235(a)(4) establishes.
The authority to reopen any hearing upon notice to all parties prior to the issuance of the Panel's decision addresses the situation where new evidence, newly discovered facts, or changed circumstances arise after the hearing has concluded and before the Panel has issued its decision. A Hearing Officer who discovers that significant evidence was not presented at hearing, or that a witness's testimony was materially incomplete or inaccurate, can reopen the hearing to receive additional evidence — ensuring that the Panel's decision is based on the most complete and accurate record possible.
The prior to the issuance of the decision limitation means that the reopening authority is available throughout the post-hearing period — including during the Panel's deliberations, the drafting of the decision, and the period between drafting and issuance. Once the decision has been issued, the record is closed and any challenge to its factual basis must proceed through the appellate process rather than through a reopening order.
The authority to create and maintain the official record of the disciplinary proceeding is the Hearing Officer's archival function — the responsibility for ensuring that every document, transcript, exhibit, and order is properly docketed, preserved, and organized in the official case file that serves as the complete record of the proceeding. FINRA Rule 9265 — Record of Hearing — provides the detailed framework for what must be included in the record, but FINRA Rule 9235(a)(6) vests the custodial responsibility for that record in the Hearing Officer. The official record is the foundation of the appellate process — the NAC's review of a Hearing Panel decision under the Rule 9300 series is based entirely on the official record as created and maintained under FINRA Rule 9235(a)(6).
The authority to draft a decision that represents the views of the majority of the Hearing Panel is one of the most significant individual functions of the Hearing Officer — transforming the Panel's collective deliberative outcome into a written decision that explains the Panel's factual findings, legal analysis, and sanction determination. The Hearing Officer drafts; the Panel decides. The majority formulation confirms that the draft must reflect the Panel's collective majority view — the Hearing Officer cannot draft a decision that represents their own individual view if that view differs from the Panel majority's conclusion. When the Panel majority agrees on findings and sanctions, the Hearing Officer drafts a decision that accurately captures that agreement. When the Panel is divided, the Hearing Officer may write a majority opinion and one or more Panelists may write separately — a practice confirmed by the existence of dissenting opinions in published OHO decisions.
The authority to rule on motions under FINRA Rule 9285 for conditions or restrictions — added by SR-FINRA-2020-011 effective April 15, 2021 — is the most recently added Hearing Officer power and reflects FINRA's important 2021 investor protection initiative. FINRA Rule 9285 authorizes the imposition of conditions or restrictions on disciplined respondents during the pendency of an appeal or NAC discretionary review of a Hearing Panel decision — addressing the investor protection gap that existed when a respondent who had been found to have violated FINRA rules and imposed with sanctions could continue operating without restriction while appealing the decision.
As Regulatory Notice 21-09 explained, FINRA Rule 9285 was designed to address investor protection concerns during the appeal period by giving Hearing Officers authority to impose conditions and restrictions — such as supervision requirements, activity limitations, or other measures — that protect customers during the potentially lengthy appellate review period without imposing the full underlying sanctions before they become final. FINRA Rule 9235(a)(8) vests this FINRA Rule 9285 authority individually in the Hearing Officer — the conditions and restrictions motion is filed with and decided by the Hearing Officer, not by the full Panel collectively — and the Review Subcommittee of the NAC handles appeals of those conditions and restrictions orders under FINRA Rule 9285's appellate framework.
FINRA Rule 9235(b) addresses the operational gap that arises when the assigned Hearing Officer is temporarily unavailable or unable for any reason to discharge their duties in a particular proceeding under conditions not requiring the formal appointment of a replacement Hearing Officer. When this occurs, the Chief Hearing Officer or Deputy Chief Hearing Officer may in their discretion exercise the necessary authority in the same manner as if they had been appointed Hearing Officer in the particular proceeding.
The not requiring the appointment of a replacement qualifier distinguishes this provision from FINRA Rule 9233(a)'s replacement appointment scenarios — if the Hearing Officer's absence is temporary and does not trigger the recusal or incapacity circumstances that require a formal replacement, the Chief Hearing Officer or Deputy Chief Hearing Officer can step in to handle any urgent matters that arise during the temporary absence without the formality and administrative burden of a full replacement appointment. This practical backstop ensures that no matter is left without a decision-maker solely because the assigned Hearing Officer is temporarily inaccessible — a scheduling conflict, a brief illness, or a momentary unavailability that does not rise to the level of incapacity requiring replacement can be bridged by Chief Hearing Officer or Deputy Chief Hearing Officer exercise of FINRA Rule 9235's authority.
FINRA Rule 9235 defines the Hearing Officer's individual authority, but the rule's in addition to the powers exercised by all members of the Hearing Panel formulation makes clear that the Hearing Officer is simultaneously an individual administrator and a collective Panel member. The individual powers of FINRA Rule 9235 — managing pre-hearing conferences, ruling on motions, creating the record, drafting the decision — belong to the Hearing Officer personally. The collective powers of the Panel — deciding violations, determining sanctions, ruling on summary disposition motions under FINRA Rule 9264 — belong to the Panel as a whole through majority vote. The Hearing Officer's dual role is not a conflict but a design feature — the individual administrative authority provides the efficient proceeding management that the Code's expeditious resolution mandate requires, while the collective decision authority provides the multi-perspective deliberation that fair adjudication requires.
FINRA Rule 9235 operates as the specific articulation of the Hearing Officer's individual authority within the broader FINRA Rule 9147 full procedural authority grant. FINRA Rule 9146(j)'s allocation of summary disposition authority to the full Panel rather than the Hearing Officer is one of the Code-specified limitations that FINRA Rule 9235(a)(4) explicitly preserves. FINRA Rule 9265's record of hearing provisions work in tandem with FINRA Rule 9235(a)(6)'s record creation and maintenance authority. FINRA Rule 9285's conditions and restrictions framework is directly enabled by FINRA Rule 9235(a)(8)'s authority grant — the two rules work together to implement the 2021 investor protection initiative for the appeal period.
FINRA Rule 9235 is tested on the Series 24 General Securities Principal examination as the Hearing Officer authority rule — the rule that defines what individual powers the Hearing Officer possesses within the disciplinary proceeding and how those powers relate to the Panel's collective authority.
The key points to retain are these: FINRA Rule 9235 grants the Hearing Officer authority to do all things necessary and appropriate to discharge their duties, with eight specifically enumerated powers in addition to the collective powers shared with all Panel members; the eight enumerated powers are holding pre-hearing conferences with authority to require attendance of representatives with settlement authority, regulating the course of the hearing, ordering oral argument at any stage, resolving all procedural and evidentiary matters and non-dispositive motions subject to Code limitations, reopening hearings prior to decision issuance, creating and maintaining the official record, drafting the Panel majority decision, and ruling on FINRA Rule 9285 motions for conditions or restrictions; the conditions and restrictions authority under FINRA Rule 9285 was added by SR-FINRA-2020-011 effective April 15, 2021 as announced in Regulatory Notice 21-09 — authorizing Hearing Officers to impose investor protection measures on disciplined respondents during the pendency of appeals; FINRA Rule 9235(a)(4)'s authority over non-dispositive motions is subject to the limitation that summary disposition motions require full Panel majority vote under FINRA Rule 9146(j); FINRA Rule 9235(b) provides that the Chief Hearing Officer or Deputy Chief Hearing Officer may exercise Hearing Officer authority when the assigned Hearing Officer is temporarily unavailable under conditions not requiring a formal replacement appointment; the Hearing Officer's FINRA Rule 9235 individual authority supplements rather than replaces the collective Panel authority — the two together define the complete scope of the Hearing Officer's role as both individual administrator and Panel member; and the rule was last amended by SR-FINRA-2020-011 effective April 15, 2021 completing the 9230 Appointment of Hearing Panel subsection.
