FINRA Cautions on Arbitration Clause

Apr 2021

Last week, FINRA issued Regulatory Notice 21-16 cautioning member firms against attempting to limit customer claims through language in mandatory pre-dispute arbitration agreements. Rule 2628 prescribes disclosure requirements for arbitration clauses and generally prohibits provisions that contradict other FINRA Rules.

The Notice specifically cautions against several provisions that improperly limit customer claims:

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