A welcome proposal for securities arbitrators

The National Association of Securities Dealers’ Web site reports that the NASD has asked the U.S. Securities & Exchange Commission to approve amendments to its rules that would compensate securities arbitrators for last-minute adjournments. The change would require a party requesting an adjournment within three days of a scheduled hearing to pay each arbitrator a fee of $100 if the request is granted. The fee also would apply when the NASD is notified of a settlement within three days of a hearing.

Although the dollar amount is small, the move is welcome. Arbitrators reserve hearing dates months in advance and are not able to reschedule their time on short notice. Cancellation fees are common in other areas of arbitration, where the usual practice is to pay the arbitrator’s full per diem for any cancellations within two weeks of the hearing.