Series 7 Exam Question 139: Answer and Explanation

Question: 139

Which of the following are TRUE about arbitration?

I. Members may take non-members to arbitration

II. Non-members may take members to arbitration

III. Members may take members to arbitration

IV. Decisions are final and binding

• A. I and II
• B. I and III
• C. II, III, and IV
• D. I, II, III, and IV

Correct Answer: C

Explanation:

C. Unless the customer signed an arbitration agreement (which you can't assume) when opening the account, the non-member decides whether a dispute goes to arbitration. So, non-members may take members to arbitration, and members may take members to arbitration, but members may not take non-members to arbitration. Unlike code of procedure, arbitration decisions are binding and non-appealable.