Subject: File No. SR-FINRA-2014-026
From: Michael J. Quarequio, Esq.

July 23, 2014

I submit the following in connection with the proposed FINRA rule change concerning increased fees and, particularly, increased arbitrator honoraria. It seems that the proposed rule change as to the increase in compensation may have the potential for an unintended, inequitable result to existing arbitrators.

I have been a FINRA (previously NASD) arbitrator since July 2000 and have seen that, despite the stated policy of expedited hearings, many final hearings do not get set for twelve months, or more, after the initial scheduling conference.

Therefore, a current arbitrator who is already assigned to a pending case, for example, would be compensated at the current fee structure even though that case may not be scheduled until mid or late 2015. A newly hired arbitrator, however, brought in after the honoraria increase and assigned to a case after the increase, might similarly be part of a panel hearing a case in mid to late 2015, but receiving a greater rate of payment. Of course, the purpose of the increase is to attract qualified individuals to act as arbitrators, so the new arbitrator should receive the greater honorarium. However, if the increase is not applied to pending, yet unheard cases, the effect is that the more experienced arbitrator, who FINRA is also trying to retain under the proposal, will be compensated at a lower rate,for doing the same work,at the same time,as the newly appointed arbitrator. Although this imbalance would be temporary until existing cases work their way through the system, it does not appear fair to have, at least for some time, a "two-tier" pay structure which penalizes those who have been arbitrators longer. As such, it is suggested that the proposed rule change increasing the honoraria be extended to pending cases.

Further, under the examples given in the proposed rule change, it does not appear that making the honoraria partially "retroactive" to pending cases will greatly impact on the overall cost to FINRA or forum participants as the modest, proposed  forum fee and hearing fee increases would seemingly be sufficient to cover the minimal expense necessary to implement this suggestion.

Respectfully submitted,

Michael J. Quarequio, Esq.

Law Office of Michael J. Quarequio, P.A.

320 SE 11th Street

Fort Lauderdale, Florida 33316