Alerts9.22.25
SEC Revisits Mandatory Arbitration Provision in Registration Statements, Streamlining Their Review, Amid Potential State Law Challenges
Highlights
- The U.S. Securities and Exchange Commission (SEC) confirmed that mandatory arbitration provisions in registration statements do not impact the effectiveness or acceleration of registration statements under federal securities laws.
- The SEC emphasized clear disclosure of the provisions, without weighing their policy merits.
- State laws, including recent Delaware amendments, may still restrict or complicate the use of mandatory arbitration clauses.
On September 17, 2025, the SEC issued a policy statement clarifying its position on the inclusion of mandatory arbitration provisions in registration statements, which require investors to resolve disputes with issuers in a private arbitration forum rather than through a court system, often waiving their rights to class actions. The policy statement confirms that the provisions do not impact the effectiveness or acceleration of registration statements under federal securities laws.
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