What Does FINRA Rule 9340 Cover in NAC Review Proceedings?
FINRA Rule 9340 is the subsection header for the fourth cluster of rules within the 9300 Review series — the seven rules, FINRA Rules 9341 through 9347, governing oral argument, the recommended decision, evidence, and the filing of papers in the appellate proceedings conducted by the Subcommittee or Extended Proceeding Committee appointed under FINRA Rule 9331 and by the National Adjudicatory Council.
Its title — Proceedings — announces the subject matter of the seven rules that follow: FINRA Rule 9341 governing oral argument, FINRA Rule 9342 governing failure to appear at oral argument, FINRA Rule 9343 governing disposition without oral argument, FINRA Rule 9344 governing failure to participate below and abandonment of appeal, FINRA Rule 9345 governing the recommended decision of the Subcommittee or Extended Proceeding Committee to the National Adjudicatory Council, FINRA Rule 9346 governing evidence in National Adjudicatory Council proceedings, and FINRA Rule 9347 governing the filing of papers in National Adjudicatory Council proceedings.
FINRA Rule 9340 itself has no independent operative text — it functions as the architectural marker delineating the core appellate proceedings phase within the 9300 series, grouping the rules that govern oral argument, abandonment of appeal, the Subcommittee's recommended decision, evidence, and the filing of briefs and other papers.
FINRA Rule 9340 sits within the 9300 Review of Disciplinary Proceeding by National Adjudicatory Council and FINRA Board; Application for SEC Review series as the structural header for the seven-rule appellate proceedings subsection. The rules within it were adopted as part of the new Code of Procedure by SR-NASD-97-28 effective August 7, 1997.
The Seven Rules Within FINRA Rule 9340's Subsection
FINRA Rule 9341 — Oral Argument — governs the oral argument process in NAC appellate proceedings. It establishes the parties' right to request oral argument, in writing, in their notice of appeal or cross-appeal or within 15 days after service of the National Adjudicatory Council's notice of review; the requirement that oral argument be granted if timely requested, subject to the limitations of FINRA Rules 9342 and 9344; the discretion of the Subcommittee or Extended Proceeding Committee, in the absence of a request, to order that a matter be set down for oral argument or to consider the matter on the basis of the record; the requirement that notice of the date, time, and location of oral argument be served at least 21 days before the hearing; and the provision that this notice may be served by electronic mail, a method added by the amendments of SR-FINRA-2022-009 effective August 22, 2022.
Oral argument under FINRA Rule 9341 is therefore granted when it is timely requested, subject to FINRA Rules 9342 and 9344, and is otherwise a matter of the discretion of the Subcommittee or Extended Proceeding Committee.
FINRA Rule 9342 — Failure to Appear at Oral Argument — governs the consequences for a party that requests oral argument but fails to appear after being duly notified. That party is deemed to have waived any opportunity for oral argument provided under the Rule 9300 Series. The Subcommittee or Extended Proceeding Committee permits argument to go forward as to the parties who appear and, in the exercise of its discretion, may consider the matter on the basis of the record without oral argument as to the parties who failed to appear.
FINRA Rule 9343 — Disposition Without Oral Argument — provides that if oral argument is not held, the matter is considered by the Subcommittee or Extended Proceeding Committee on the basis of the record, as defined in Rule 9267, supplemented by any written materials submitted to or issued by the Subcommittee, the Extended Proceeding Committee, or the National Adjudicatory Council in connection with the appeal, cross-appeal, or call for review.
FINRA Rule 9344 — Failure to Participate Below; Abandonment of Appeal — addresses two situations. First, if an appealing party did not participate in the disciplinary proceeding before a Hearing Officer, a Hearing Panel, or, if applicable, an Extended Hearing Panel, and fails to show good cause for the failure to participate, the matter is considered on the basis of the record and other documents; failure to participate includes failing to file an answer or otherwise respond to a complaint, or failing to appear at a scheduled hearing.
When good cause is shown, the National Adjudicatory Council or Review Subcommittee remands the disciplinary proceeding with instructions. Second, when an appealing party fails to advise the National Adjudicatory Council or the Review Subcommittee of the basis for seeking review, or otherwise fails to provide information or submit a written brief in response to a request, the appeal may be dismissed as abandoned, and the decision of the Hearing Officer, the Hearing Panel, or, if applicable, the Extended Hearing Panel becomes the final disciplinary action of FINRA. Upon a showing of good cause, the National Adjudicatory Council may withdraw any dismissal entered under the rule.
FINRA Rule 9345 — Subcommittee or Extended Proceeding Committee Recommended Decision to National Adjudicatory Council — requires a Subcommittee or, if applicable, an Extended Proceeding Committee to present a recommended decision in writing to the National Adjudicatory Council before the meeting of the National Adjudicatory Council at which the disciplinary proceeding will be considered. The recommended decision is not itself the decision on the appeal — the National Adjudicatory Council considers it, together with all matters presented in the appeal or review, in its formal consideration and decision under FINRA Rule 9349.
FINRA Rule 9346 — Evidence in National Adjudicatory Council Proceedings — limits the review to the record, as defined in Rule 9267, supplemented by briefs and other papers submitted to the Subcommittee or Extended Proceeding Committee and the National Adjudicatory Council, and by any oral argument permitted under the Code. A party may introduce additional evidence only with prior approval of the Subcommittee or Extended Proceeding Committee, or the National Adjudicatory Council, upon a showing that extraordinary circumstances exist.
FINRA Rule 9347 — Filing of Papers in National Adjudicatory Council Proceedings — governs the briefs filed in those proceedings. Briefs are due on dates established in a scheduling order by the Subcommittee or Extended Proceeding Committee, the National Adjudicatory Council, the Review Subcommittee, or Counsel to the National Adjudicatory Council: opening briefs are due not less than 21 days from the date of the scheduling order, answering briefs 21 days thereafter, and reply briefs not later than ten days after service of the answering brief. A brief other than a reply brief may not exceed 25 double-spaced pages, and a reply brief may not exceed 12 double-spaced pages.
The 9340 Subsection in the Appellate Lifecycle
The rules within FINRA Rule 9340's subsection govern the substantive appellate review phase — the period after the Subcommittee or Extended Proceeding Committee is appointed under FINRA Rule 9331 and before the full NAC's formal consideration and decision under FINRA Rule 9349. In this phase the parties may request oral argument, submit briefs on the schedule set under FINRA Rule 9347, and seek approval to introduce additional evidence under FINRA Rule 9346, and the Subcommittee or Extended Proceeding Committee presents its written recommended decision to the National Adjudicatory Council under FINRA Rule 9345.
The oral argument process — when requested and granted, or ordered — is the most visible aspect of this phase. The parties appear before the Subcommittee or Extended Proceeding Committee for oral argument, with notice of the date, time, and location served at least 21 days in advance. The written briefs under FINRA Rule 9347 — the opening brief, the answering brief, and any reply brief — supply the written advocacy in the proceeding, and the review is confined to the record, as defined in Rule 9267, supplemented by those briefs and other papers and by any oral argument permitted under the Code.
Connection to FINRA Rules 9331, 9341 Through 9347, and 9349
FINRA Rule 9340 connects to FINRA Rule 9331 — whose appointment of the Subcommittee or Extended Proceeding Committee creates the body before which the oral argument and recommended decision provisions of the 9340 subsection operate. It connects to FINRA Rules 9341 through 9347 as the substantive rules it organizes. And it connects to FINRA Rule 9349 — whose formal NAC consideration and decision process takes into account the written recommended decision presented under FINRA Rule 9345.
Examination Relevance and Key Takeaways
FINRA Rule 9340 is the organizational header of the core appellate proceedings subsection of the 9300 series — understanding its structural role is prerequisite to correctly navigating the relationship among FINRA Rules 9341 through 9347 as an integrated framework governing oral argument, evidence, briefing, and the Subcommittee's recommended decision.
The key points to retain are these: FINRA Rule 9340 is the subsection header for the seven-rule core appellate proceedings cluster within the 9300 series — it has no independent operative text but organizes FINRA Rules 9341 through 9347; FINRA Rule 9341 governs oral argument — granted if timely requested, subject to FINRA Rules 9342 and 9344, and otherwise within the discretion of the Subcommittee or Extended Proceeding Committee; FINRA Rule 9342 provides that a party who requests oral argument but fails to appear is deemed to have waived it; FINRA Rule 9343 provides that, if oral argument is not held, the matter is considered on the record and written materials; FINRA Rule 9344 addresses an appealing party's failure to participate below, with remand upon good cause, and dismissal of an appeal as abandoned; FINRA Rule 9345 requires the Subcommittee's written recommended decision to be presented to the full NAC before the meeting at which the proceeding is considered, for formal consideration and decision under FINRA Rule 9349; FINRA Rule 9346 limits review to the record as supplemented by briefs, other papers, and permitted oral argument, with additional evidence allowed only upon approval and a showing of extraordinary circumstances; FINRA Rule 9347 sets the briefing schedule and page limits; and the rules within the 9340 subsection were adopted as part of the new Code of Procedure by SR-NASD-97-28 effective August 7, 1997.
