Initially, cases came into mediation from arbitration. The NASD Mediation Rules were approved by the Securities and Exchange Commission on August 1, 1995. Mediation, a form of dispute resolution, offers investors an alternative to arbitration. Unlike arbitration, mediation is a non- binding process that must be agreed upon by both parties. Resolution is reached when there is agreement between both parties.
Mediation typically begins with a joint session in which each party makes an opening statement.
Once the parties finish their joint session, the mediator usually breaks them into separate, private meetings, called caucus sessions. Strict confidentiality is ensured as parties share their issues and interests and explore common ground. The mediator then helps facilitate a settlement amenable to both parties. If a settlement is not reached, the claim can then be taken to arbitration.