Securities Firm Challenges FINRA Rules Providing for Exclusive Jurisdiction Over Customer Arbitrations

Thrivent Financial, a fraternal benefit society that offers insurance products to its members, is seeking to force the U.S. Securities and Exchange Commission to review three specific rules that give FINRA exclusive jurisdiction over arbitration proceedings between member firms and their customers.  The challenged rules – FINRA Rules 2268(d), 12200 and 12204(d) – prohibit parties from entering into or enforcing agreements that provide for arbitration outside FINRA’s own arbitration forum.  Thrivent claims that the SEC abused its discretion under the federal Administrative Procedures Act and exceeded its authority by denying Thrivent’s previously filed rulemaking petition and failing to address “plainly illegal” rules promulgated under its authority.  The case, which is pending in the United States Court of Appeals for the District of Columbia Circuit, stems from Thrivent’s desire to allow disputes with its members concerning the insurance products it offers to be resolved through its “Member Dispute Resolution Program.”

On July 16, 2025, Thrivent filed its Opening Brief with the D.C. Court of Appeals.  In its Brief, Thrivent requests that the Court declare unlawful the FINRA rules in question, as unlawful limitations on private arbitration rights.  In sum, according to Thrivent, “Supreme Court precedent requires enforcement of private agreements to resolve disputes individually through arbitration – and forbids regulators from limiting arbitration rights without express congressional authorization.”  Therefore, Thrivent argues, the challenged FINRA rules unlawfully limit the its arbitration rights and those of other FINRA members.