FINRA requested comments on the efficacy of allowing compensated non-attorneys (non-attorney representatives, or "NARs") to represent parties in securities arbitration and mediation proceedings. As detailed in a Regulatory Notice, FINRA rules currently permit non-attorneys to represent clients in such proceedings, subject to certain restrictions.

The FINRA Dispute Resolution Task Force observed a range of misconduct undertaken by NARs in the dispute resolution forum, including (i) using the forum to employ inappropriate business practices, (ii) charging excessive, non-refundable retainer fees, (iii) practicing in locations where NARs are prohibited from representing clients, and (iv) pursuing frivolous claims to obtain settlements. FINRA acknowledged that NARs provide parties with certain benefits, as attorneys often are unlikely to represent clients in cases involving small claims, but observed that the lack of professional rules, guidelines and other restrictions make retaining NARs particularly risky for investors involved in disputes.

In response to these and other concerns, FINRA is requesting comments related to (i) dealings with NARs in the dispute resolution forum, (ii) alternatives for customers seeking representation, (iii) the potential restriction or complete prohibition of NAR activities, and (iv) possible steps for FINRA to take in order to better educate investors about NAR activities. Comments must be submitted by December 18, 2017.

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