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September 17, 2009
Amendments to NFA Code of Arbitration and Member Arbitration Rules
After careful consideration, the Board unanimously endorsed NFA adopting the following changes.
Explanation of the Rule Changes
Summary proceedings have proven to be an effective method of resolving disputes for claims under $50,000. Summary proceedings are resolved more quickly and are less costly to both the parties and to NFA. As a result, NFA has amended the Code to ensure that more cases are processed as summary proceedings. Specifically, all cases filed on or after October 1, with claim amounts that are less than or equal to $50,000 will be processed as summary proceedings. Parties will be able to request an oral hearing for claims between $25,000.01 and $50,000. However, this request must be accompanied by a $675 fee, which approximates the costs associated with processing the case as an oral hearing.
NFA has also amended the Rules' provision for requesting an oral hearing to parallel the changes to the Code. As of October 1, an oral hearing may be requested under the Rules for cases that exceed $25,000 (rather than the current $15,000).
Three Arbitrator Panels
Appointing one arbitrator instead of three simplifies the arbitration process and reduces costs. In addition, NFA generally processes one arbitrator claims more quickly than three arbitrator claims.
Therefore, NFA has increased the threshold for three arbitrator panels under the Code so it is consistent with the Rules. As of October 1, all new claims between $50,000.01 and $100,000 will be heard by one arbitrator unless all parties in the proceeding submit a written request to NFA for three arbitrators.
If you have any questions regarding this Notice or the changes to the arbitration rules, please contact NFA's Arbitration Department at (800) 621.3570.