Investor Rights for the 21st Century The NASD Code provides that members and associated persons must arbitrate their disputes with customers at the demand of the customer.
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What does a standard arbitration agreement look like?
While there is no one universally accepted arbitration agreement, most look something like the following:
I agree that all controversies that may arise between us concerning any order or transaction, or the continuation, performance or breach of this or any other agreement between us, shall be determined by arbitration before a panel of arbitrators selected by the National Association of Securities Dealers or the New York Stock Exchange, Inc., as I may designate, pursuant to the rules of the organization in existence at the time of the submission to arbitration. I understand that a judgment upon the arbitration award may be entered in any court of competent jurisdiction.
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Are more arbitrators needed?
Absolutely. The requirements to become an arbitrator are minimal. A potential arbitrator will be required to participate in a very basic arbitrator skills training program before being assigned to a case. Applicants are required to attend a four-hour training course and pass a simple, objective test that examines the knowledge of what was just taught in the training session. There is also a $100 fee that covers the cost of the training materials, the onsite instruction, and test administration.
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Are there any other requirements?
Yes. The NASD requires that individuals have at least five years of business, professional, investing, or other related experience. A potential arbitrator needs to fill out the NASD arbitrator application (which can be found at www.nasdadr.com) and submit
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