Which of the following statements describes the composition of FINRA arbitration panels for customer disputes?

The correct answer is C, Panels are permitted to be a combination of industry and public arbitrators. FINRA arbitration panels are designed to ensure fairness and neutrality in resolving disputes between customers and broker-dealers.

Step-by-step, FINRA classifies arbitrators into two main categories:

Public arbitrators, who have no significant ties to the securities industry

Industry arbitrators, who have experience working within the securities industry

For customer disputes, panels may include a mix of these arbitrators. In many cases, especially for larger claims, panels consist of two public arbitrators and one industry arbitrator, though customers may request an all-public panel.

Choice A is incorrect because arbitrators are not required to be attorneys. Choice B is incorrect because not all arbitrators come from the securities industry—public arbitrators are specifically included to provide impartiality. Choice D is incorrect because arbitrators are selected from a FINRA-provided roster, and while parties can rank and strike candidates, they do not jointly create the pool.

Thus, FINRA arbitration panels are intentionally structured as a combination of public and industry arbitrators, ensuring balanced perspectives, making Answer C correct.