Revised Discovery Guide and Document Production Lists for Customer Arbitration Proceedings – Regulatory Notice 11-17

FINRA announced in Regulatory Notice 11-17 that a revised Discovery Guide and Document Production Lists for Customer Arbitration Proceedings was approved by the SEC and will be effective May 16, 2011 (and apply to customer cases filed on or after such date). The revised Discovery Guide changes not only the format, but also substantive changes that expand the scope and number of presumptively discoverable documents.


The original Discovery Guide was adopted in 1999, including document production lists for use in customer arbitration proceedings, and provides direction on which documents parties should exchange without arbitrator or staff intervention, and the Lists specifically identify the documents parties should exchange before the hearing, depending on the type of dispute.

Per the Notice, the Discovery guide is revised to expand and update the Lists. FINRA is replacing the current 14 Lists with just two Lists of presumptively discoverable documents: one for firms/associated persons to produce and one for customers to produce. The revisions include additional types of documents that users indicated are needed to develop a case and while each will be presumptively discoverable in every customer case, the revisions encourage arbitrators to tailor the Discovery Guide to the facts and circumstances to each case.

Discovery Guide Introduction

The introduction was revised to provide guidance to parties and arbitrators, including:

  • Flexibility – one-size may not fit all – arbitrators retain flexibility to order production not provided in the lists, to refuse to compel production of documents in the list and to alter the production schedule
  • Objections based on Cost/Burden
  • Requests for Additional Documents
  • Party and Non-Party Production
  • Consideration of Firm Business Models and Customer Claims
  • Electronic Discovery – electronic files are considered “documents”
  • Confidentiality
  • Privilege – protection for privileged documents
  • Affirmations for no responsive documents in possession
  • No Obligation to Create Documents
  • Admissibility – production does not create a presumption of admissibility at hearing

Expanded and Increased Production

Notable additions to documents presumed to be discoverable by claimant include:

  • Telephone logs related to the claimant’s transactions;
  • All advertising materials sent to customers of the firm that refer to the securities and/or account types at issue or that were used to solicit and provide services to the claimant;
  • All customer complaints filed against the associated persons assigned to the accounts at issue for the three years prior to the statement of claim;
  • Increased scope relating to associated person’s disciplinary history;
  • Documents related to trading or investment strategies utilized/recommended in the claimant’s account;
  • Associated person’s compensation for the transaction at issue;

Notable additions to documents presumed to be discoverable by the firm include:

  • Research report(s) claimants received from the firm;
  • All non-confidential settlements claimant(s) entered in civil actions involving securities matters and/or securities arbitration proceedings;
  • All documents the claimant received related to the investments at issue;
  • All materials received by claimant or obtained from any source relating to the transactions or products at issue;
  • All correspondence related to the accounts at issue (not just with the firm).

Notable deletions include:

  • Firms are no longer required to produce holding pages, or account statements/confirmations for the claimant’s accounts and transactions at issue.
  • Claimant’s are no longer required to produce prior complaints involving securities matters and the firm’s response, or documents showing actions claimant took to limit losses in the transaction at issue.

The revised Discovery Guide becomes effective and applicable to all customer cases filed on or after May 16, 2011. Broker-dealers should take steps to ensure that their procedures for responding to newly-filed customer cases are in compliance with the changes. As always, it is essential to be proactive to implement these changes. Contact Evans & Kob PC if you need experienced legal representation and advice regarding FINRA arbitration or updating your current procedures to accommodate these changes at

Link: Litigation and Arbitration

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