FINRA proposed a rule to bar brokers and their firms from requiring customers to consent to the removal of a dispute from the Central Registration Depository as a condition of settling the disagreement.
In a release, FINRA said the proposal is intended to ensure that the CRD system continues to contain relevant information. The proposal was approved by FINRA's board of governors. It now will be submitted to the SEC, who must sign off on the rule change.
Candidly, this would be a disaster for the BDs and broker. Many arbitration claims have little or no merit and cause stains on the records of many good people. Expungements are the only way to even the playing field.
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