FINRA’s Proposed Rule Changes Conforming the Industry Code to “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” are Effective Immediately

Seyfarth Synopsis:  On May 13, 2022, FINRA filed a proposed rule change to conform the Industry Code to the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act.  FINRA filed the proposed rule change with immediate effectiveness requesting the SEC to waive the 30-day operative delay. The rule change is effective as of May 13, 2022 as reported in the Federal Register on May 24, 2022.

On May 13, 2022 FINRA proposed rule changes to conform the FINRA Industry Code to the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.”  According to the proposed rules, firms are required to disclose to an associated person that a party alleging a sexual assault or sexual harassment claim may elect, post dispute, not to arbitrate such a claim under the Code.  Several other sections of the Industry Code are being amended to conform the procedural rules imposed in statutory discrimination arbitrations to sexual assault and/or sexual harassment arbitrations. 

FINRA filed the proposed rule changes for immediate effectiveness.  The operative date will be the date of filing of the proposed rule changes - May 13, 2022, as provided in the Federal Register on May 24, 2022 (Vol. 87, No. 100, P. 31592).  2022-11062.pdf (finra.org).

The full proposed language for the new rules are available on the FINRA website: sr-finra-2022-012.pdf