They are three. The first consists in sending a written letter (typed or by computer printer) to the arbitrage organism, in which you describe the nature of complaints. (Many of the organisms of the stock exchange sector, such as the NYSE, AMEX and other regional markets, have a director of arbitrage to whom you can send the letter of complaint).

The second step is to deposit in the arbitrage organism a check or payment order for the sum prescribed in section 2 of the uniform code. The norms objective is to avoid trivial complaints; the final destiny of the deposit will be decided by the arbiter or by the arbitrage commission.

The third step is the signing and devolution of the submission agreement to the arbitrage organism in it, you declare you submission to the jurisdiction of the arbitrage authority and to accept the final dispositions. The arbitrage procedures are rather simple and usually takes place (according to what is established in the code of arbitration procedure) in the nearest locality to the address of that who complaints.

The arbitrage organism designates an arbiter (usually a person that does not have connections with any of the stock exchange agencies nor with any financial institution) to see the matter. The arbiter (or the commission of arbitrage, depending on the sum) examines the complaints presented by the individual investor and determines if the mater can be resolved to the satisfaction of all the parties involved without the need of an oral hearing. The claimer has the right to ask for an oral hearing, although in most of the cases the only intervention of an impartial arbiter is enough to work out any matter without arriving to that point

If the claimer does ask for an oral hearing, or if the arbiter feels that the matter cannot be resolved by basing the claim in the letter and the documents presented, a date is fixed for an oral hearing.

This oral hearing is similar to those done in ordinary courts of justice, but a lot more informal, and the claimer has more liberty to make his allegations than what would be permitted in a judicial hearing. The hearing begins with the oath act from part of the arbiter and the witnesses and then, he invites the parts to begin their preliminary 3 declarations. After that, the person who is making the complaint exposes its arguments backing them up with the pertinent documents and the declaration of witnesses, as it is prescribed. The opposite part also has the opportunity to defend itself by presenting his point of view on the case. The arbitrage actions end with the countercharges and final conclusions. The arbiter studies all the matter and issues his judgment, which is notified by mail to the parts.

The arbiter has faculties to order the stock exchange agency to refund the money back to the individual investor, and also his decision is unappeasable, as it is registered in the submission agreement.

This arbitrage system has been functioning well until new and most of the times, has favored the small investor, overall when the stock exchange agency implied is registered in the pertinent organisms and was also, a member of the Securities Industry Association.

However, if the stock exchange agency is one of those without a fixed address and can disappear at any moment, it is practically useless to use these procedures to recover the money, because of this from all points of view it is convenient to research the honesty and solvency of an agency before compromising in business with it.