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Law360 (October 14, 2020, 10:19 PM EDT) -- The Financial Industry Regulatory Authority said Wednesday that it has administratively postponed all in-person arbitration and mediation proceedings through the rest of the year in response to the evolving COVID-19 pandemic.
The regulator posted on its website that parties may stipulate to proceed by phone or Zoom videoconferencing, an option it has extended since March, and that matters ordered by a FINRA panel to take place virtually could proceed.
The post notes that "if all parties and arbitrators agree to proceed in-person based on their own assessment of public health conditions, the case may proceed provided that the in-person hearing participants comply with all applicable state and local orders related to the COVID-19 pandemic."
In late March, FINRA postponed in-person hearings through Oct. 30 and continued to hold its proceedings virtually, noting at the time that it would start looking into the viability of in-person meetings on a location-by-location basis, but that "only a handful" of its hearing locations throughout the country could provide conditions consistent with guidance from the Centers for Disease Control and Prevention.
FINRA, like its financial regulator peers, has taken a variety of steps to continue operations online since March, including asking the U.S. Securities and Exchange Commission, which oversees it, in May for the authority to serve documents by email and augment its operations in other ways to account for difficulties created by the COVID-19 crisis.
The agency sought to require applicants and respondents to also file documents by email, unless a different method was agreed to by both parties, and temporarily shelved the requirement for oral arguments in disciplinary proceedings to be held in person.
"The requested relief is a reasonable accommodation to protect the health and safety of all parties participating in these adjudicatory processes while avoiding unnecessary delays to these proceedings," FINRA said in May.
The transition was not without its hiccups and detractors. According to FINRA leadership in a conference panel from last month, requests for virtual hearings had only been filed in about 2% of open cases by the middle of August, with arbitrators having to order virtual hearings in 70% of cases. A total of 41 cases used at least one virtual hearing session by that time, with only seven of them ending in a final award.
--Editing by Michael Watanabe.
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