Overview

• On Sept. 17, 2025, the SEC stated that issuer–investor mandatory arbitration provisions will not affect decisions to accelerate the effectiveness of registration statements.
• The policy leans on recent Supreme Court readings of the Federal Arbitration Act, with the SEC finding no clear securities-law displacement even where provisions include class-action waivers.
• The Commission and staff will not determine whether specific arbitration terms are enforceable and will instead focus on whether the registration statement clearly discloses the provisions’ material terms.
• Uncertainty persists under state law, with Delaware’s new Section 115(c) potentially limiting charter or bylaw arbitration mandates, an issue on which the SEC took no position.
• Open questions include how the policy interacts with FINRA’s bar on arbitrating class actions, as criticism grows from investor advocates and in Commissioner Caroline Crenshaw’s dissent.