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Since no one ever agrees, let’s make the time period 5 days – NASD Staff
Under a proposal submitted to the SEC on March 3, NASD will allow only 5 days for parties to agree on the selection of a chairperson, as opposed to the 15-day period in Rule 10308(c)(5). The change is necessitated, the NASD states in its filing of SR-NASD-2004-039, in order to speed up the selection process and allow the Initial Prehearing Conference (IPHC) to be scheduled more expeditiously. 80% of the time, NASD argues, the 15-day period is wasted, because the parties cannot or do not make a mutual selection and the Director must make the appointment.
Under the proposed rule, NASD would only have to wait 5 days before making selection and, where the parties notify staff that they are negotiating to select a chairperson and need an extension of time, staff will grant additional time. (SAC Ed: We might quarrel with the stated premise for the change, in that the arbitrator selection process is already complete when the chair selection option kicks in, plus (at least in the Northeast Region) the IPHC is also scheduled at the time the arbitrator appointments are announced to the parties. Arguably, the staff could schedule the IPHC ten days sooner than they have in the past, but that is currently a matter within administrative discretion. This change may not produce the desired reduction in case turnaround time. Ultimately, though, it all matters little, as the option to select the chairperson will be taken out of the parties hands altogether under the new Customer Code (see Proposed Rule 12406). This filing does not mention the Proposed Code filing, but it would substitute a qualified chairpersons list for part of the Public Arbitrator list of nominees that parties now receive and allow the Director to select the Chair from the unstricken candidates. That NASD-DR has filed the proposal at this juncture may signify that a long wait is now anticipated before the SEC will act on the Proposed Customer Code.) (SAC Ref. No. 04-10-01)
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