FINRA Rule 9332

FINRA Rule 9332 is distinctive in its appellate context for three structural features that distinguish it from FINRA Rules 9233 and 9234: it covers four categories of appellate body participants rather than two; it specifically includes Counsel to the NAC within the impartiality framework; it addresses multi-member and multi-panelist disqualification through a specific paragraph governing challenges to multiple NAC members, multiple Review Subcommittee members, and multiple Subcommittee panelists; and it requires that replacement Review Subcommittee members have the same Industry or Non-Industry classification as the member being replaced — reflecting the NAC's governance structure in which industry and public representation must be maintained.

FINRA Rule 9332 sits within the 9330 Appointment of Subcommittee or Extended Proceeding Committee; Disqualification and Recusal subsection of the 9300 Review of Disciplinary Proceeding series. 

It was adopted 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. One selected notice is associated with the rule — 08-57.

FINRA Rule 9332(a): Self-Recusal and Involuntary Departure

FINRA Rule 9332(a) establishes the continuous self-assessment obligation and the self-recusal mechanism for all four categories of appellate body participants — NAC members, Review Subcommittee members, Subcommittee and Extended Proceeding Committee panelists, and Counsel to the NAC. The at any time formulation confirms the obligation's continuous nature throughout the appellate proceeding — from assignment through the NAC's final decision.

The three triggering conditions mirror FINRA Rule 9160's universal standard: conflict of interest, bias, or circumstances where fairness might reasonably be questioned. Any single condition independently triggers the mandatory notification obligation. When a triggering condition is identified, the affected member, panelist, or Counsel shall notify the NAC Chair or Vice Chair — mandatory notification with no discretion to assess independently whether the disclosed circumstances rise to a level requiring withdrawal. The NAC Chair or Vice Chair then issues and serves on the parties a notice that the person has withdrawn.

FINRA Rule 9332(a) addresses three distinct departure scenarios and their replacement consequences.

When a Subcommittee or Extended Proceeding Committee Panelist withdraws, is incapacitated, or is otherwise unable to continue service after a hearing has been convened, the NAC Chair or Vice Chair shall appoint a replacement Panelist drawn from the same eligible pool as FINRA Rule 9331's initial appointment criteria. 

The after a hearing has been convened qualifier means that this replacement provision applies specifically when the appellate oral argument has already begun — departure before a hearing is convened does not trigger this specific provision, though replacement would still be required if the Subcommittee falls below its minimum composition.

When a Review Subcommittee member withdraws, is incapacitated, or is otherwise unable to continue service after assignment, the NAC Chair or Vice Chair shall appoint a replacement member of the NAC — with the critical classification requirement that the replacement must have the same Industry or Non-Industry classification as the departing member. 

This classification-matching requirement reflects the NAC's governance architecture established in the FINRA Regulation By-Laws, under which the Review Subcommittee's composition must maintain the appropriate balance between industry and public/non-industry representation. Replacing an industry member with a non-industry member — or vice versa — would alter the composition balance without authorization.

When a Counsel to the NAC withdraws, is incapacitated, or is otherwise unable to continue service after assignment, the General Counsel of FINRA shall assign a replacement Counsel to the NAC. This replacement authority vested in the General Counsel rather than the NAC Chair or Vice Chair reflects the institutional character of the Counsel role — Counsel are OGC staff whose assignments are managed by the OGC leadership structure rather than the NAC's governance structure.

FINRA Rule 9332(b): Party Motion to Disqualify

FINRA Rule 9332(b) establishes the party-initiated disqualification pathway for all four categories of appellate body participants. Any party may move for the disqualification of a member of the NAC, the Review Subcommittee, a Subcommittee or Extended Proceeding Committee panelist, or Counsel to the NAC.

The motion standard — reasonable good faith belief — mirrors the FINRA Rules 9233(b) and 9234(b) standards applicable at the OHO level. The motion must be accompanied by an affidavit setting forth in detail the facts alleged to constitute grounds for disqualification and the dates on which the party learned of those facts.

The fifteen-day filing deadline — measured from the later of two triggering events — applies the same temporal limitation as the OHO-level disqualification rules. For appellate body composition, the triggering events are: when the party learned of the facts believed to constitute the disqualification; or when the party was notified of the composition of the Subcommittee or Extended Proceeding Committee, or the assignment of Counsel to the NAC. 

The later-of structure ensures that the party has a full fifteen days from the moment both the identity of the potentially conflicted person and the potentially disqualifying facts are known. Failure to file within fifteen days results in waiver of the disqualification motion.

The explicit reference to notification of Counsel's assignment as a triggering event in FINRA Rule 9332(b)(2) — alongside notification of Subcommittee composition — confirms that Counsel to the NAC's impartiality is treated as important enough to warrant the same fifteen-day challenge window as Subcommittee panelists. This confirms that FINRA Rule 9332's inclusion of Counsel in the impartiality framework is not merely nominal — parties have a genuine and timely opportunity to challenge Counsel's assignment when they have a reasonable good faith basis for believing Counsel has a conflict, bias, or circumstances raising questions about their fairness.

FINRA Rule 9332(c): Disposition of Single-Person Challenges

FINRA Rule 9332(c) establishes the decision authority for disqualification motions challenging a single NAC member, Review Subcommittee member, Subcommittee or Extended Proceeding Committee panelist, or Counsel to the NAC. All such motions shall be decided by the NAC Chair or Vice Chair — not by the challenged person themselves and not by the Subcommittee whose member is challenged.

The NAC Chair or Vice Chair's decision authority applies uniformly across all four categories of appellate body participants. This uniformity contrasts with FINRA Rule 9234's OHO-level framework, where single-panelist challenges are decided by the Hearing Officer rather than the Chief Hearing Officer, and only full-panel challenges elevate the decision to the Chief Hearing Officer. 

At the appellate level, the decision authority is consistently vested in the NAC Chair or Vice Chair regardless of which category of participant is challenged — reflecting both the NAC's institutional structure and the absence of a separate Hearing Officer equivalent in the appellate context.

The Chair or Vice Chair shall promptly determine whether disqualification is required and issue a written ruling on the motion — the same prompt investigation and written ruling standard as FINRA Rule 9233(c) at the OHO level.

The replacement consequences following a disqualification ruling under FINRA Rule 9332(c) follow the same classification-matching and category-specific logic as FINRA Rule 9332(a)'s departure replacement provisions. A disqualified Review Subcommittee member is replaced by another NAC member of the same Industry or Non-Industry classification. A disqualified Subcommittee or Extended Proceeding Committee Panelist is replaced by the NAC Chair or Vice Chair. A disqualified Counsel is replaced by the General Counsel's assignment of a replacement Counsel.

FINRA Rule 9332(d): Disposition of Multiple-Person Challenges

FINRA Rule 9332(d) governs the more complex scenario of motions challenging multiple appellate body members simultaneously, organized across three sub-provisions reflecting the three different bodies that may face multi-member challenges.

FINRA Rule 9332(d)(1) addresses challenges to multiple NAC members. When a party moves to disqualify more than one NAC member, the Chair or Vice Chair shall determine whether disqualification is required and issue a written ruling. If multiple NAC members are disqualified, the remaining members of the NAC shall consider the appeal — no specific replacement obligation applies, as the NAC's large membership means that sufficient remaining members can constitute a functioning body even after multiple disqualifications.

FINRA Rule 9332(d)(2) addresses challenges to multiple Review Subcommittee members. The Chair or Vice Chair decides and orders replacement members of the NAC with the same Industry or Non-Industry classification as the disqualified members — maintaining the composition balance principle that applies to all Review Subcommittee replacements.

FINRA Rule 9332(d)(3) addresses challenges to multiple Subcommittee or Extended Proceeding Committee panelists. The Chair or Vice Chair decides and appoints replacement panelists when multiple disqualifications are ordered — with no specific classification requirement applicable to these proceeding-specific appellate panels.

The Inclusion of Counsel to the NAC: A Distinctive Feature

The most distinctive feature of FINRA Rule 9332 compared to the OHO-level impartiality rules is its inclusion of Counsel to the NAC as a subject of the disqualification and recusal framework. Neither FINRA Rule 9233 nor FINRA Rule 9234 includes any staff advisory person within their impartiality frameworks — they address only Hearing Officers and Panelists respectively. FINRA Rule 9332's inclusion of Counsel to the NAC reflects a considered judgment that Counsel's advisory role in NAC appellate proceedings is sufficiently integrated with the adjudicative function to warrant the same impartiality protections.

This inclusion serves both the structural integrity of the appellate process and the parties' due process interests. A Counsel to the NAC who has a conflict of interest in a specific appeal — perhaps because they previously advised on the Enforcement side of the case, or because they have a personal relationship with a party — could inappropriately influence the Subcommittee's analysis even without formally adjudicating. The FINRA Rule 9332 framework addresses this risk by requiring Counsel to self-recuse when such circumstances exist and by giving parties the right to challenge Counsel's assignment.

Connection to FINRA Rules 9160, 9233, 9234, 9313, and 9331

FINRA Rule 9332 is the appellate implementation of FINRA Rule 9160(b) and (c), which direct that disqualification of NAC members, Review Subcommittee members, and Subcommittee and Extended Proceeding Committee panelists shall be governed by FINRA Rule 9332. It connects to FINRA Rules 9233 and 9234 as its OHO-level counterparts implementing the same universal impartiality standard in the first-level adjudicative context. It connects to FINRA Rule 9313 — whose Counsel to the NAC role is specifically subject to FINRA Rule 9332's impartiality requirements. And it connects to FINRA Rule 9331 — whose Subcommittee and Extended Proceeding Committee appointments create the bodies whose members are subject to FINRA Rule 9332's disqualification framework.

Examination Relevance and Key Takeaways

FINRA Rule 9332 is tested on the Series 24 General Securities Principal examination as the appellate impartiality rule — the NAC-level counterpart to FINRA Rules 9233 and 9234's OHO-level impartiality frameworks.

The key points to retain are these: FINRA Rule 9332 applies the FINRA Rule 9160 impartiality standard to four categories of appellate body participants — NAC members, Review Subcommittee members, Subcommittee and Extended Proceeding Committee panelists, and Counsel to the NAC; the self-recusal obligation applies at any time throughout the appellate proceeding to all four categories — the affected person must notify the NAC Chair or Vice Chair who issues and serves a withdrawal notice on all parties; when a Subcommittee Panelist departs after a hearing has been convened the Chair or Vice Chair appoints a replacement Panelist; when a Review Subcommittee member departs the replacement must have the same Industry or Non-Industry classification as the departing member — maintaining the NAC's governance composition balance; when Counsel departs the General Counsel assigns a replacement Counsel; party disqualification motions must be based on reasonable good faith belief supported by a detailed affidavit and filed within fifteen days of the later of when the party learned of the disqualifying facts or when the party was notified of the Subcommittee's composition or Counsel's assignment; all single-person and multi-person disqualification motions are decided by the NAC Chair or Vice Chair who must promptly investigate and issue a written ruling; the classification-matching requirement for Review Subcommittee replacements applies to both voluntary withdrawals and involuntary disqualifications; the inclusion of Counsel to the NAC within FINRA Rule 9332's impartiality framework is the most distinctive feature distinguishing this appellate rule from the OHO-level impartiality rules; and the rule was adopted in 1997 and last amended December 15, 2008 through SR-FINRA-2008-021.