On September 10, 2025, the SEC announced that an open meeting will be held on September 17, 2025 and the agenda items include:
- Whether to issue a policy statement addressing the presence of a provision requiring arbitration of investor claims arising under the federal securities laws and its impact on decisions whether to accelerate the effectiveness of a registration statement.
- Whether to amend the SEC's Rules of Practice relating to procedures governing Commission review of staff actions made pursuant to delegated authority in connection with the determination of the effectiveness of a registration statement or the qualification of a Regulation A offering.
There has been a long-standing debate over whether public companies should be permitted to require arbitration of securities law claims as part of their organization documents, and the Commission has followed a policy of not accelerating the effective of registration statement for companies with mandatory arbitration provisions, citing Securities Act Section 8(a), which allows the Commission to refuse to accelerate the effective date of a company's registration statement upon considering, among other things, the facility with which the rights of the issuer's securities holders can be understood, the public interest, and the protection of investors. In this regard, mandatory arbitration provisions have been viewed as inconsistent with the "anti-waiver" provisions of the federal securities laws, notably Securities Act Section 14 and Exchange Act Section 29(a), which state that any condition that would bind a person to waive compliance with those laws is void. In two instances over the course of the past forty years, the Staff of the Division of Corporation Finance has refused to declare Securities Act registration statements effective when the subject company has included mandatory arbitration provisions in their organizational documents. The possibility of revisiting the SEC's policy regarding mandatory arbitration provisions was discussed during the first Trump Administration, but no changes were made to the policy at that time.
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