A more thorough explanation:

When resolving securities disputes, an arbitration panel can consist of one or three arbitrators. The number of arbitrators depends on the amount in controversy. If the claim is $50,000 or less, the panel will have one arbitrator. If the claim is more than $50,000 but not more than $100,000, the panel will have one arbitrator unless the parties agree to three arbitrators in writing. If the claim is more than $100,000, unspecified, or non-monetary, the panel will have three arbitrators unless the parties agree to one arbitrator in writing.

• If a dispute involves a claim of $30,000, the panel will have one arbitrator.
• If a dispute involves a claim of $75,000, the panel will have one arbitrator unless the parties agree to three arbitrators in writing.
• If a dispute involves a claim of $150,000, the panel will have three arbitrators unless the parties agree to one arbitrator in writing.

These examples illustrate how the amount in controversy determines the number of arbitrators on the panel.

FINRA has over 6,000 arbitrators who are classified as either public or non-public. Public arbitrators do not need to have securities industry knowledge, while non-public arbitrators typically have a background in securities. FINRA requires arbitrators to have at least five years of business or professional experience and at least two years of college-level education. Arbitrators come from diverse professions, including lawyers, doctors, accountants, securities professionals, and members of other industries. They are independent contractors and are not employees of FINRA. Arbitrators receive an honorarium from FINRA in recognition of their service and are not paid by the parties directly.

If a securities dispute involves complex financial products, the parties may want to select arbitrators with a background in securities to ensure they have the necessary expertise to understand and resolve the dispute.

After the respondent's answer is due, FINRA's Neutral List Selection System (NLSS) generates one or three lists of potential arbitrators depending on the panel size. FINRA distributes the list(s) and the arbitrators' background information to the parties for review. Each separately represented party may strike arbitrators it does not want within the limits set by the FINRA rules and rank the remaining choices. After the parties return their ranked lists, FINRA appoints the arbitrators for the panel.

If a securities dispute involves three arbitrators, FINRA will randomly generate one list with ten non-public arbitrators and two lists, each with ten public arbitrators, one of which lists is Chair-qualified. The parties can strike arbitrators they do not want and rank the remaining choices. FINRA will then appoint the arbitrators for the panel based on the parties' ranked lists.

Before the first hearing session, an arbitrator may be removed for conflict of interest. The parties have the opportunity to challenge the arbitrators appointed to the panel if they determine the arbitrator to be unsuitable due to special circumstances that might preclude the arbitrator from making an impartial and objective decision. Arbitrators have a continuing duty to disclose any circumstances that might preclude them from rendering an objective decision on the arbitration.

If an arbitrator has a financial interest in the outcome of the arbitration, they must disclose this information to the parties. If they fail to do so, they may be removed from the panel.