Overview

• On September 17, the Commission adopted a policy stating that issuer–investor arbitration clauses do not conflict with federal securities laws.
• Staff will not withhold or delay acceleration of registration statements based on such provisions, provided disclosures are clear.
• Final amendments to Rule 431 eliminate automatic stays of challenged acceleration decisions, reducing post-effectiveness disruptions.
• The Commission’s analysis defers to the Federal Arbitration Act and recent Supreme Court precedent, and it does not endorse the merits of any clause.
• Commissioner Caroline Crenshaw dissented, citing risks to retail investors and noting that state laws, including Delaware’s forum requirements, could limit enforceability.