Mediation

Mediation and Arbitration in the FINRA Framework

The FINRA rulebook contains a Code of Arbitration Procedure for Customer Disputes, a Code of Arbitration Procedure for Industry Disputes, and a Code of Mediation Procedure. Under Rule 14100, the Customer Code is the Code of Arbitration Procedure for Customer Disputes, and the Industry Code is the Code of Arbitration Procedure for Industry Disputes. The Customer Code is the 12000 Series of the FINRA rulebook, and the Industry Code is the 13000 Series.

Under Rule 12200, parties must arbitrate a dispute under the Customer Code if arbitration under the Customer Code is either required by a written agreement or requested by the customer, the dispute is between a customer and a member or associated person of a member, and the dispute arises in connection with the business activities of the member or the associated person, except disputes involving the insurance business activities of a member that is also an insurance company.

Under Rule 12201, parties may arbitrate a dispute under the Customer Code if the parties agree in writing to submit the dispute to arbitration under the Customer Code after the dispute arises, the dispute is between a customer and a member, associated person of a member, or other related party, and the dispute arises in connection with the business activities of a member or an associated person, except disputes involving the insurance business activities of a member that is also an insurance company.

Under Rule 13200(a), except as otherwise provided in the Industry Code, a dispute must be arbitrated under the Industry Code if the dispute arises out of the business activities of a member or an associated person and is between or among members, members and associated persons, or associated persons. Under Rule 13200(b), disputes arising out of the insurance business activities of a member that is also an insurance company are not required to be arbitrated under the Industry Code.

Arbitration under the Customer Code ends in an award. Under Rule 12904(a), all awards shall be in writing and signed by a majority of the arbitrators or as required by applicable law, and such awards may be entered as a judgment in any court of competent jurisdiction. Under Rule 12904(b), unless the applicable law directs otherwise, all awards rendered under the Customer Code are final and are not subject to review or appeal.

Mediation follows a different structure. It is voluntary, and the mediator has no authority to determine issues or make decisions. Mediation offers a flexible alternative to arbitration, and FINRA mediation can start either before a dispute enters arbitration or while the dispute is still going through the arbitration process.

The Code of Mediation Procedure

Under Rule 14101, the Code applies to any matter submitted to mediation at FINRA. Rule 14100 through Rule 14110 are titled, in order, Definitions; Applicability of Code; National Arbitration and Mediation Committee; Director of Mediation; Mediation under the Code; Effect of Mediation on Arbitration Proceedings; Representation of Parties; Mediator Selection; Limitation on Liability; Mediation Ground Rules; and Mediation Fees.

The sections that follow cover each of those rules, with the process steps that FINRA staff use to administer a mediation added where they apply.

Defined Terms in the Code

Under Rule 14100, unless otherwise defined in the Code, terms used in the Code and interpretive material, if defined in the FINRA By-Laws, shall have the meaning as defined in the FINRA By-Laws. The following terms are defined in the Code.

Under Rule 14100(e), the term matter means a dispute, claim, or controversy. Under Rule 14100(c), the term Code means the Code of Mediation Procedure. Under Rule 14100(b), the term Board means the Board of Directors of FINRA Regulation, Inc. Under Rule 14100(f), the term NAMC means the National Arbitration and Mediation Committee of the Board. Under Rule 14100(g), unless the Code specifies otherwise, the term FINRA includes FINRA, Inc., and FINRA Regulation, Inc.

Under Rule 14100(d), the term Director in the Rule 14000 Series refers to the Director of Mediation at FINRA Dispute Resolution Services. Unless the Code or any other FINRA rule provides otherwise, the term includes FINRA staff to whom the Director of Mediation has delegated authority.

Under Rule 14100(k), the term Submission Agreement means the FINRA Mediation Submission Agreement. The FINRA Mediation Submission Agreement is a document that parties must sign at the outset of a mediation in which they agree to submit to mediation under the Code.

Under Rule 14100(j), the term Party Portal means the web-based system that is accessible by arbitration and mediation parties and their representatives. The Party Portal allows invited participants to access a secure section of FINRA’s website to submit documents and view their arbitration and mediation case information and documents.

Under Rule 14100(a), the term Arbitrator and Mediator Portal means the web-based system that allows invited arbitrators and mediators to access a secure section of FINRA’s website to submit documents and information and view their arbitration and mediation case information and documents.

The National Arbitration and Mediation Committee

Under Rule 14102(a), the Board shall appoint a NAMC under Section II of the Plan of Allocation and Delegation of Functions by FINRA to FINRA Regulation, Inc. The NAMC shall consist of no fewer than ten and no more than twenty-five members. At least 50 percent of the NAMC shall be Non-Industry members. The Chairperson of the Board shall name the Chairperson of the NAMC.

Under Rule 14102(b), the NAMC has the authority to recommend rules, regulations, procedures and amendments relating to arbitration, mediation, and other dispute resolution matters to the Board. All matters recommended by the NAMC to the Board must have been approved by a quorum, which shall consist of a majority of the NAMC, including at least 50 percent of the Non-Industry committee members. If at least 50 percent of the Non-Industry committee members are either present at or have filed a waiver of attendance for a meeting after receiving an agenda prior to such meeting, the requirement that at least 50 percent of the Non-Industry committee members be present to constitute the quorum is waived. The NAMC has such other power and authority as is necessary to carry out the purposes of the Code.

Under Rule 14102(c), the NAMC may meet as frequently as necessary, but must meet at least once a year.

The Director of Mediation

Under Rule 14103, the Board shall appoint a Director of Mediation to administer mediations under the Code. The Director will consult with the NAMC on the administration of mediations, as necessary. The Director may delegate his or her duties when appropriate, unless the Code provides otherwise.

The Director holds specific powers elsewhere in the Code. The Director receives the executed Submission Agreements that submit a matter to mediation, has the sole authority to determine whether a matter is eligible to be submitted for mediation, supplies the list from which parties may select a mediator, assigns a mediator when the parties do not select one, receives the written notice when a party withdraws, receives the signed statement of an unpaid non-attorney representative, may waive administrative fees, and determines the anticipated mediator charges that each party deposits before the first session.

Mediation Is Voluntary

Under Rule 14104(a), mediation under the Code is voluntary, and requires the written agreement of all parties. No party may be compelled to participate in a mediation or to settle a matter by FINRA, or by any mediator appointed to mediate a matter pursuant to the Code.

The Mediation Ground Rules in Rule 14109(b) add that mediation is voluntary and any party may withdraw from mediation at any time prior to the execution of a written settlement agreement by giving written notice of withdrawal to the mediator, the other parties, and the Director.

FINRA’s process has the same feature at the start. The mediation will only occur if both parties agree to it.

Eligibility and Submission

Under Rule 14104(b), if all parties agree, any matter that is eligible for arbitration under the Customer Code or Industry Code, or any part of any such matter, or any dispute related to such matter, including procedural issues, may be submitted for mediation under the Code.

Under Rule 14104(c), a matter is submitted to mediation when the Director receives an executed Submission Agreement from each party. Under Rule 14104(d), the Director shall have the sole authority to determine if a matter is eligible to be submitted for mediation.

The Submission Agreement confirms that parties will mediate in accordance with FINRA Mediation Rules and agree to the terms of payment for applicable fees and the confidentiality of the mediation process. Under Rule 14110(c), the mediator’s charges are specified in the Submission Agreement.

Two Ways a Mediation Starts

Mediation can be initiated two ways with FINRA: either before a dispute enters an arbitration or while the dispute is still going through the arbitration process.

If a dispute is already in arbitration, one or both parties can contact their arbitration administrator about their desire to mediate. FINRA staff will contact the other side to see if they agree to mediate the dispute. If desired, FINRA staff will see if the other party is interested in mediation without revealing any interest by the opposing party. If the parties agree to mediate, the case will proceed with mediator selection. Often times, the parties submit their agreement to mediate within a postponement notice. The arbitration and mediation processes may proceed on a parallel track.

If there is a dispute which is not yet in arbitration, one of the parties can directly request mediation. This is called a straight-in mediation request. Once the request is submitted, FINRA will send the request to the named party asking for a response and/or agreement to mediate the dispute. If there is an agreement to mediate, the case will proceed with mediator selection. If there is not an agreement, the requesting party can decide if it is appropriate to file an arbitration claim at that time.

Upon agreement, FINRA staff will begin by putting together a list of FINRA-approved mediators and scheduling the session. Both parties will also be introduced, usually in writing, to their Mediation Administrator, and find out how to contact staff.

Effect on a Pending Arbitration

Under Rule 14105(a), unless the parties agree otherwise, the submission of a matter for mediation will not stay or otherwise delay the arbitration of a matter pending at FINRA. If all parties agree to stay an arbitration in order to mediate the matter, the arbitration will be stayed, notwithstanding any provision to the contrary in the Code or any other rule.

Under Rule 14105(b), if mediation is conducted through FINRA, no postponement fees will be charged for staying the arbitration in order to mediate.

Representation of Parties

Under Rule 14106(a), parties may represent themselves in mediation held in a United States hearing location. A member of a partnership may represent the partnership, and a bona fide officer of a corporation, trust, or association may represent the corporation, trust, or association.

Under Rule 14106(b)(1), at any stage of a mediation proceeding held in a United States hearing location, any party may be represented by an attorney at law in good standing and admitted to practice before the Supreme Court of the United States or the highest court of any state of the United States, the District of Columbia, or any commonwealth, territory, or possession of the United States; by a student enrolled in a law school participating in a law school clinical program or its equivalent and practicing under the supervision of an attorney; or by a person, who is not an attorney, who has not received, and will not receive, compensation in any manner in connection with the representation, provided that prior to the representation, the person or the party files with the Director through the Party Portal a written statement, signed by the person and the party, attesting that the person has not received, and will not receive, compensation in connection with the representation.

Under Rule 14106(b)(2), no person may represent a party in any mediation proceeding held in a United States hearing location if the laws of a state of the United States, the District of Columbia, or commonwealth, territory, or possession of the United States with jurisdiction over the representation prohibit the representation; if the person is, at present, suspended or barred from the securities industry in any capacity; if the person is, at present, suspended from the practice of law or disbarred; or if the person is, at present, suspended from or denied the privilege of appearing or practicing before the Securities and Exchange Commission.

Under Rule 14106(c), a challenge to the qualifications of a representative made outside of the mediation proceeding shall not stay or otherwise delay the mediation proceeding in the absence of a court order.

Mediator Selection and Disclosure

Under Rule 14107(a), a mediator may be selected by the parties from a list supplied by the Director; with the Director’s approval upon receipt of the parties’ joint request, from a list or other source the parties choose; or by the Director if the parties do not select a mediator after submitting a matter to mediation.

After conferring with the parties, FINRA will send a list of proposed mediators from its roster. The mediators on the list may have subject-matter expertise or other experience that is consistent with the parties’ needs in the case. The parties may select their mediator from the initial list FINRA sends or may ask for additional lists. The parties may also agree to mediate with a FINRA-approved mediator by advising the mediation staff at any time during the process.

Under Rule 14107(b), for any mediator assigned or selected from a list provided by FINRA, the parties will be provided with information relating to the mediator’s employment, education, and professional background, as well as information on the mediator’s experience, training, and credentials as a mediator. FINRA will include a disclosure report for each mediator on the provided list. The disclosure report contains the mediator’s rate (hourly fee or flat fee), any travel or cancellation policies, educational and employment experience, type of cases mediated, the number of cases mediated and how many settled, all of which help the parties select the mediator who best meets their needs.

Under Rule 14107(c), any mediator selected or assigned to mediate a matter shall comply with the provisions of Customer Code Rule 12405 or Industry Code Rule 13408, unless, with respect to a non-FINRA mediator approved by the Director, the parties elect to waive such disclosure.

Under Rule 14107(d), no mediator may serve as an arbitrator of any matter pending in FINRA arbitration in which he served as a mediator, and the mediator may not represent any party or participant to the mediation in any subsequent FINRA arbitration relating to the subject matter of the mediation.

Rule 13408 also reaches mediation. Under Rule 13408(a)(4), a potential arbitrator must disclose to the Director any existing or past service as a mediator for any of the parties in the case for which the arbitrator has been selected.

Mediation Ground Rules

Under Rule 14109(a), the Ground Rules govern the mediation of a matter. The parties to a mediation may agree to amend any or all of the Ground Rules at any time. The Ground Rules are intended to be standards of conduct for the parties and the mediator.

Under Rule 14109(c), the mediator shall act as a neutral, impartial, facilitator of the mediation process and shall not have any authority to determine issues, make decisions or otherwise resolve the matter.

Under Rule 14109(d), following the selection of a mediator, the mediator, all parties and their representatives will meet in person or by conference call for all mediation sessions, as determined by the mediator or by mutual agreement of the parties. The mediator shall facilitate, through joint sessions, caucuses and/or other means, discussions between the parties, with the goal of assisting the parties in reaching their own resolution of the matter. The mediator shall determine the procedure for the conduct of the mediation. The parties and their representatives agree to cooperate with the mediator in ensuring that the mediation is conducted expeditiously, to make all reasonable efforts to be available for mediation sessions, and to be represented at all scheduled mediation sessions either in person or through a person with authority to settle the matter.

Under Rule 14109(e), the mediator may meet with and communicate separately with each party or the party’s representative. The mediator shall notify all other parties of any such separate meetings or other communications.

Under Rule 14109(f), the parties agree to attempt, in good faith, to negotiate a settlement of the matter submitted to mediation. Notwithstanding that a matter is being mediated, the parties may engage in direct settlement discussions and negotiations separate from the mediation process.

Under Rule 14109(h), the parties may agree to use the Party Portal to submit all documents and other communications to each other, to retrieve all documents and other communications, and view mediation case information.

The Mediation Session

The mediation may be held in person, telephonically or by video conference. FINRA staff is available to help schedule the mediation date and coordinate the location and format with the parties and mediator. The parties also may schedule the mediation directly with the mediator and provide the necessary information to FINRA staff.

As of October 2026, most mediations take about three months to complete. Mediations usually take one day, and the date and format are agreed upon by all participants. The mediation is conducted in English. If a party wishes to have interpretation services during the mediation session, generally, the requesting party will be responsible for arranging the service and any related costs. A party experiencing financial difficulties can submit a request for a waiver of interpretation services fees to their mediation case administrator no later than thirty days before the first day of the mediation. If the waiver is granted, FINRA will be responsible for arranging interpretation services and the cost of the interpreter.

Unlike in arbitration, mediators can speak directly to and privately with the parties. Prior to the mediation session, the mediator may choose to speak with the parties individually to become knowledgeable about the details about the case. The mediator also may request a summary or history of the dispute, arbitration pleadings (if available) or other documents that help tell the story of the dispute.

The purpose of the mediation session is for the parties to work toward a possible settlement. The mediator’s role is to guide the parties toward their own resolution. Through joint sessions and separate caucuses with the parties, the mediator helps both sides define the issues clearly, understand each other’s positions and move closer to resolution. The mediator has no authority to decide the settlement or even compel the parties to settle.

At the mediation, the mediator may begin with a joint session, to set the ground rules and an agenda, including introductions and if agreed upon parties will present opening statements. The opening statements will provide the parties an opportunity to explain the client’s position and interest. Generally, after the opening statement, the mediator will move the parties into individual caucuses, which are private meetings with one party at a time. The mediator will ask questions, speak at length about the issues at hand, and carry messages, such as offers, counter offers, demands or proposals between the parties to help facilitate a resolution. The mediator will speak with the parties candidly about settlement expectations and will help the parties see the strengths and weaknesses of the case.

Confidentiality

Under Rule 14109(g), mediation is intended to be private and confidential.

Under Rule 14109(g)(1), the parties and the mediator agree not to disclose, transmit, introduce, or otherwise use opinions, suggestions, proposals, offers, or admissions obtained or disclosed during the mediation by any party or the mediator as evidence in any action at law, or other proceeding, including a lawsuit or arbitration, unless authorized in writing by all other parties to the mediation or compelled by law, except that the fact that a mediation has occurred shall not be considered confidential.

Under Rule 14109(g)(2), the parties agree and acknowledge that the provisions of this paragraph shall not operate to shield from disclosure to FINRA or any other regulatory authority, documentary or other information that FINRA or other regulatory authority would be entitled to obtain or examine in the exercise of its regulatory responsibilities.

Under Rule 14109(g)(3), the mediator will not transmit or otherwise disclose confidential information provided by one party to any other party unless authorized to do so by the party providing the confidential information.

Settlement and Impasse

As of October 2026, the majority of FINRA mediations conclude with a settlement between the parties. While mediation is non-binding, once parties sign a settlement agreement, the agreement is final and enforceable.

A settlement occurs if the parties resolve their dispute. When the parties reach an agreement, they are responsible for recording the settlement in writing. The mediator may help the parties determine who is documenting the terms of the settlement, even if it is handwritten, and have the parties execute the agreement. This agreement may be finalized formally at a later date.

At the conclusion of the mediation, the mediator will provide FINRA’s Mediation Administrator a mediator payment form, which will reflect the case status, and the allocation of mediation fees. If there is a pending arbitration case, the claimant is responsible for advising the arbitration Case Administrator.

An impasse occurs if the parties do not settle their dispute. Since mediation is non-binding, there are times when the parties decide not to settle, or they resolve only part of the case in mediation by narrowing some of the issues. In those instances, claimants maintain their right to file an arbitration claim or proceed with an existing arbitration case.

Settlement Agreements and Rule 2081

Under Rule 2081, no member or associated person shall condition or seek to condition settlement of a dispute with a customer on, or to otherwise compensate the customer for, the customer’s agreement to consent to, or not to oppose, the member’s or associated person’s request to expunge such customer dispute information from the Central Registration Depository (CRD) system.

For purposes of Rule 2081, settlement of a dispute refers to any resolution or disposition of a customer dispute, including but not limited to, settlement agreements, voluntary dismissals, stipulated dismissals, and withdrawals of claims, as well as all oral and written agreements entered into or discussed during the course of settlement negotiations and any agreements entered into separate from such negotiations.

Any provision in the parties’ agreement to resolve a customer dispute that the customer consents to or does not oppose a request for expungement relief is a violation of Rule 2081, including where the member or associated person does not pay money or provide other consideration to the customer. Rule 2081 applies to any oral or written agreement with a customer and is not limited to agreements entered into during settlement negotiations. An agreement, reached at any time, to release a customer from claims in exchange for the customer’s agreement to consent to, or not to oppose, an expungement request violates Rule 2081. The rule also applies if the customer is the party making the offer to consent to, or not to oppose, expungement in exchange for a customer release.

Mediation Fees

Under Rule 14110(a), each party to a matter submitted directly to a mediation administered under the Code must pay an administrative fee to FINRA in the amounts indicated in the schedule, unless the Director specifically waives the fee. As of October 2026, the schedule for cases filed directly in mediation is as follows.

For an amount in controversy from one cent to twenty-five thousand dollars, the Customer and Associated Person Fee is fifty dollars and the Member Fee is one hundred fifty dollars. For an amount in controversy from twenty-five thousand dollars and one cent to one hundred thousand dollars, the Customer and Associated Person Fee is one hundred fifty dollars and the Member Fee is three hundred dollars. For an amount in controversy over one hundred thousand dollars, the Customer and Associated Person Fee is three hundred dollars and the Member Fee is five hundred dollars.

Under Rule 14110(b), when a matter is initially filed in arbitration and subsequently submitted to mediation under the Code, each party must pay an administrative fee to FINRA in the amounts indicated in the schedule, unless the Director specifically waives the fee. As of October 2026, for an amount in controversy from one cent to twenty-five thousand dollars, the Customer and Associated Person Fee is zero dollars and the Member Fee is zero dollars. For an amount in controversy from twenty-five thousand dollars and one cent to one hundred thousand dollars, the Customer and Associated Person Fee is one hundred dollars and the Member Fee is one hundred fifty dollars. For an amount in controversy over one hundred thousand dollars, the Customer and Associated Person Fee is two hundred fifty dollars and the Member Fee is five hundred dollars.

Under Rule 14110(c), the parties to a mediation administered under the Code must pay all of the mediator’s charges, including the mediator’s travel and other expenses. The charges shall be specified in the Submission Agreement and shall be apportioned equally among the parties unless they agree otherwise. Each party shall deposit with FINRA its proportional share of the anticipated mediator charges and expenses, as determined by the Director, prior to the first mediation session.

As of October 2026, FINRA offers a free or low-cost virtual mediation program specifically designed for claims involving one hundred thousand dollars or less. Parties can mediate their dispute at these rates: no cost for claims of twenty-five thousand dollars or less; fifty dollars an hour, split between parties, for claims of twenty-five thousand dollars and one cent to fifty thousand dollars; or one hundred dollars an hour, split between parties, for claims of fifty thousand dollars and one cent to one hundred thousand dollars. In this claim range, parties will receive a short list of three mediators to select from. When parties mediate through this program, FINRA waives any mediation filing fees.

To initiate a mediation through this program, a party fills out FINRA’s online Request for Mediation form and specifies a relief request of one hundred thousand dollars or less to be automatically enrolled. Cases involving expungement of a customer complaint do not qualify for mediation. Parties may request a financial hardship waiver of filing and interpretation fees.

Limitation on Liability

Under Rule 14108, FINRA, its employees, and any mediator named to mediate a matter under the Code shall not be liable for any act or omission in connection with a mediation administered under the Code.

Mediation in FINRA Disciplinary Proceedings

FINRA’s disciplinary process has its own route to mediation. The parties in FINRA’s disciplinary process may request mediation through the Office of Hearing Officers (OHO). Mediation is a non-binding alternative dispute resolution process. The parties and their attorneys shall attend mediation sessions as directed by the mediator. If no settlement is reached, the case will proceed to hearing as scheduled.

Exam Relevance

Candidates should check the current outline for their examination.

The Series 7 content outline lists Function 4, Section 4.3, Informs the appropriate supervisor and assists in the resolution of discrepancies, disputes, errors and complaints. Its knowledge bullets include Methods of formal resolution, with arbitration, mediation, and litigation named in parentheses. The FINRA Rules listed beneath it include the 12000 Series, Code of Arbitration Procedure for Customer Disputes; the 13000 Series, Code of Arbitration Procedure for Industry Disputes; and the 14000 Series, Code of Mediation Procedure.

The Series 24 content outline lists Function 2, Section 2.5, which covers taking disciplinary or corrective actions relating to the conduct of associated persons, addressing regulatory actions regarding violations or potential violations of securities industry laws, rules and regulations, and addressing customer and industry disputes. Its knowledge bullets include Proper handling and resolution of customer and industry disputes. The FINRA Rules listed beneath it include the 14000 Series, Code of Mediation Procedure; Rule 14104, Mediation Under the Code; Rule 14105, Effect of Mediation on Arbitration Proceedings; and Rule 14109, Mediation Ground Rules.

The Series 26 content outline lists Function 3, Oversees Compliance and Business Processes of the Broker-Dealer and its Offices, with Topic 3.5, Proper handling, resolution and required regulatory reporting of customer complaints. The FINRA Arbitration Procedures listed under it include the 12000 Series, the 13000 Series, and the 14000 Series, Code of Mediation Procedure.

Common Misunderstandings

A mediator decides the dispute. The mediator shall act as a neutral, impartial, facilitator of the mediation process and shall not have any authority to determine issues, make decisions or otherwise resolve the matter.

Mediation is binding in the same way as arbitration. Mediation is non-binding. Once the parties sign a settlement agreement, the agreement is final and enforceable. An arbitration award rendered under the Customer Code is final and is not subject to review or appeal unless the applicable law directs otherwise.

Submitting a dispute to mediation pauses a pending arbitration. Unless the parties agree otherwise, the submission of a matter for mediation will not stay or otherwise delay the arbitration of a matter pending at FINRA. If all parties agree to stay an arbitration in order to mediate the matter, the arbitration will be stayed.

A party can be required to mediate. Mediation under the Code is voluntary, and no party may be compelled to participate in a mediation or to settle a matter by FINRA, or by any mediator.

A party must stay in a mediation once it begins. Any party may withdraw from mediation at any time prior to the execution of a written settlement agreement by giving written notice of withdrawal to the mediator, the other parties, and the Director.

Everything connected to a mediation is confidential. The confidentiality provisions do not shield from disclosure to FINRA or any other regulatory authority documentary or other information that the regulatory authority would be entitled to obtain or examine in the exercise of its regulatory responsibilities, and the fact that a mediation has occurred shall not be considered confidential.

A mediator can go on to arbitrate the same dispute. No mediator may serve as an arbitrator of any matter pending in FINRA arbitration in which he served as a mediator, and the mediator may not represent any party or participant to the mediation in any subsequent FINRA arbitration relating to the subject matter of the mediation.

Mediation must come before arbitration. Mediation under the Code is voluntary and requires the written agreement of all parties, and if the other party does not agree to mediate, the requesting party can decide if it is appropriate to file an arbitration claim at that time.

Mediation is available only before an arbitration claim is filed. Mediation can be initiated at any time before or even during the arbitration process.

A settlement may include the customer’s agreement not to oppose expungement. Under Rule 2081, no member or associated person shall condition or seek to condition settlement of a dispute with a customer on the customer’s agreement to consent to, or not to oppose, the request to expunge customer dispute information from the Central Registration Depository system.

Key Points to Retain

Mediation is a voluntary, non-binding process in which a neutral mediator helps the parties work toward their own settlement, and the mediator has no authority to determine issues, make decisions, or otherwise resolve the matter.

The Code of Mediation Procedure is the Rule 14000 Series. Under Rule 14101, the Code applies to any matter submitted to mediation at FINRA.

Under Rule 14104(a), mediation under the Code is voluntary, and requires the written agreement of all parties. A matter is submitted to mediation when the Director receives an executed Submission Agreement from each party, and the Director has the sole authority to determine whether a matter is eligible.

Under Rule 14105(a), unless the parties agree otherwise, the submission of a matter for mediation will not stay or otherwise delay a pending arbitration. If mediation is conducted through FINRA, no postponement fees will be charged for staying the arbitration in order to mediate.

A mediator may be selected by the parties from a list supplied by the Director, with the Director’s approval from a list or other source the parties choose, or by the Director if the parties do not select one. No mediator may later serve as an arbitrator of the matter or represent a party in a related FINRA arbitration.

Any party may withdraw from mediation at any time prior to the execution of a written settlement agreement.

The mediator may meet with and communicate separately with each party and must notify all other parties of any such separate meetings or communications.

Mediation is intended to be private and confidential, but the fact that a mediation has occurred is not confidential, and the confidentiality provisions do not shield information from FINRA or any other regulatory authority entitled to obtain or examine it.

Once the parties sign a settlement agreement, the agreement is final and enforceable. If the parties reach an impasse, claimants maintain their right to file an arbitration claim or proceed with an existing arbitration case.

Rule 2081 bars a member or associated person from conditioning settlement of a customer dispute on the customer’s agreement to consent to, or not to oppose, a request to expunge customer dispute information from the CRD system.

Under Rule 14110(c), the parties pay the mediator’s charges, apportioned equally unless they agree otherwise, and each party deposits its proportional share prior to the first mediation session.

Under Rule 14108, FINRA, its employees, and any mediator named to mediate a matter under the Code shall not be liable for any act or omission in connection with a mediation administered under the Code.

The Series 7, Series 24, and Series 26 content outlines list the 14000 Series, Code of Mediation Procedure.