January 29, 2013
I support the proposed change to FINRA's Rules, with the reservation expressed here.
The proposal to exclude from the public pool arbitrators who have past or present affilations with mutual fund companies and hedge funds is in the public interest. Employees of financial services companies of any kind should not be "public" arbitrators. The experiences and affilations of such individuals have the potential to taint their impartiality and create the appearance of bias.
But the look-back periods in the proposed Rule are too short. The issues of potential taint and/or the appearance of bias does not wear off so quickly or so simply as by the passage of a few years. There is no reason why FINRA cannot provide the public with arbitrators who have never been affiliated with the financial services industry.
Thank you for this opportunity to comment.