The Securities and Exchange Commission today published a policy statement clarifying that decisions regarding the acceleration of a registration statement’s effectiveness will not be influenced by the presence of a provision mandating arbitration for investor claims arising under federal securities laws.
Chairman Paul S. Atkins emphasized the significance of this announcement, stating that the Commission, as an agency promoting disclosure and transparency, found its prior lack of a public position on this critical issue inconsistent with its core mission and mandate. This ambiguity, he declared, ends today. Chairman Atkins further clarified that while the adoption of mandatory arbitration provisions by companies is a subject of broad discussion, the Commission’s specific responsibility in this discourse is to provide certainty that such clauses do not conflict with federal securities laws, a role now fulfilled by this new policy.
The Commission's action addresses periodic inquiries from issuers concerning whether a mandatory arbitration provision for investor claims under federal securities laws would impact the acceleration of their registration statement's effectiveness. Today’s statement provides the Commission’s definitive view, reiterating that, consistent with the Supreme Court’s current interpretation and application of the Federal Arbitration Act, the existence of such a provision will not influence determinations whether to accelerate a registration statement’s effective date.
Consequently, when assessing whether to accelerate the effectiveness of a registration statement, the Commission staff will now concentrate on the overall adequacy of the registration statement’s disclosures, including specific details pertaining to the arbitration provision.