Acceleration of Effectiveness of Registration Statements of Issuers with Certain Mandatory

Conformed to Federal Register version 
SECURITIES AND EXCHANGE COMMISSION 
17 CFR Parts 231 and 241 
[Release No. 33-11389; 34-103988] 
RIN 3235-AN55 
Acceleration of Effectiveness of Registration Statements of Issuers with Certain Mandatory 
Arbitration Provisions 
AGENCY: Securities and Exchange Commission. 
ACTION: Final rule; Policy s tatement. 
SUMMARY: The Securities and Exchange Commission (“Commission”) is issuing this 
statement to inform the public that the presence of a provision requiring arbitration of investor 
claims arising under the Federal securities laws w ill not impact decisions regarding whether to 
accelerate the effectiveness of a registration statement. Accordingly, when making such 
decisions, the staff will focus on the adequacy of the registration statement’s disclosures, 
including disclosure regarding the arbitration provision. 
DATES: Effective date: September 19, 2025. 
FOR FURTHER INFORMATION CONTACT: Questions about specific filings should be 
directed to staff members responsible for reviewing the documents the issuer files with the 
Commission. For general questions about this statement, contact John Fieldsend, Special 
Counsel, at (202) 551-3430, Division of Corporation Finance, or Anna Sandor, Senior Counsel, 
or Yoon Choo, Senior Counsel, at (202) 551-6787, Division of Investment Management, U.S. 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. 
SUPPLEMENTARY INFORMATION: 
 
Table of Contents 
 
I. Introduction           
II. Discussion            
 A. Acceleration of a Registration Statement’s Effectiveness    
 B. The Arbitration Act and Issuer-Investor Mandatory Arbitration Provisions   

 C. Effect of Supreme Court Case Law Developments Regarding the FAA on the  
Application of Section 8(a)’s “Public Interest/Investor  
Protection” Standard           
1. Nothing in the text of the anti-waiver provisions or any other provisions of 
the Federal securities statutes could be construed as a clearly expressed 
congressional intention that the Arbitration Act would not apply to Federal 
securities laws claims.         
  2.  Under Supreme Court precedent, the FAA is not displaced merely because  
bilateral arbitration may undermine the economic incentive of some  
persons to bring private Federal securities law claims.    
III.  Conclusion           
IV. Other Matters            
Statutory Authority   
 
I. Introduction 
This statement concerns requests to accelerate the effective date of registration statements 
filed under the Securities Act of 1933 (“Securities Act”)
1
 by issuers with a mandatory arbitration 
provision for investor claims arising under the Federal securities laws
2
 (“issuer-investor 
mandatory arbitration provision”).
3
 As discussed in further detail in section II.C. there have been 
a number of developments involving the U.S. Supreme Court’s (“Supreme Court” or “Court”) 
interpretation and application of the Federal Arbitration Act of 1925 (“FAA” or “Arbitration 
Act”)
4
 that inform such acceleration requests.  In addition, as discussed in further detail in 
Section II.B., potential uncertainty exists regarding the intersection of the FAA and state law. For 
example, Delaware recently amended its General Corporation Law in a way that may prohibit 
certificates of incorporation or bylaws from including an issuer-investor mandatory arbitration 
 
 
1
  15 U.S.C. 77a et seq. 
2
  As used in this statement, the phrase “Federal securities laws” includes the Federal securities statutes and any 
rules and regulations issued thereunder, whereas the phrase “Federal securities statutes” includes only the 
relevant statutes. 
3
  Issuer-investor mandatory arbitration provisions may be contained in an issuer’s articles or certificate of 
incorporation or bylaws. They may also be contained in indentures, limited partnership agreements, declarations 
of trust or trust agreements, American depositary receipts deposit agreements, or elsewhere. The use of the term 
“issuer-investor mandatory arbitration provision” is not meant to preclude (or foreclose) the possibility that 
issuers may seek to include other entities or persons related to, or connected with, the issuer within the scope of 
the arbitration provision. Relatedly, although we refer to issuer-investor mandatory arbitration provisions 
throughout as bilateral, it is possible that the issuer-investor mandatory arbitration provision may require 
investors to arbitrate certain claims involving parties other than the issuer. 
4
  9 U.S.C. 1 through 16. The Arbitration Act was enacted prior to the enactment of all of the Federal securities 
statutes. 

provision.
5
 Other states may adopt different approaches on this issue. Notwithstanding these 
developments and potential uncertainty, the Commission has not spoken publicly on this topic 
even though, during the registration process, issuers have on occasion sought to include such a 
provision in their Securities Act registration statements.
6
  
In order to provide issuers with greater certainty concerning the Commission’s approach 
to requests to accelerate the effective date of a registration statement disclosing an issuer-
investor mandatory arbitration provision, we are issuing this policy statement. For the reasons 
explained in this statement, we have determined that the presence of an issuer-investor 
mandatory arbitration provision
7
 will not impact decisions whether to accelerate the 
effectiveness of a registration statement under the Securities Act.
8
 Accordingly, when 
considering acceleration requests pursuant to Securities Act section 8(a)
9
 and Rule 461 
thereunder,
10
 the staff will focus on the adequacy of the registration statement’s disclosures, 
including disclosure regarding issuer-investor mandatory arbitration provisions.
11
  
II. Discussion 
 
 
5
  See 8 DEL. CODE ANN. Tit. 8, Section 115(c) (2025) (effective Aug. 1, 2025). Specifically, new paragraph (c) in 
section 115 permits the certificate of incorporation or bylaws to prescribe a forum or venue for certain claims 
that are not internal corporate claims but only if a stockholder may bring such claims in at least one court in the 
State of Delaware that has jurisdiction over such claims. This statement expresses no view on whether this or 
any other state law provision is consistent with the FAA.  
6
  See, e.g., Amendment to Registration Statement on Form S-1, The Carlyle Group L.P., File No. 333-176685 
(Jan. 10, 2012). 
7
  Conditions or restrictions that are part of the issuer-investor mandatory arbitration provision that may impact 
investors’ substantive rights under the Federal securities laws are outside the scope of this statement. 
8
  We would also apply this conclusion to decisions whether to: (i) accelerate the effectiveness of registration 
statements filed under the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. 78a et seq.; (ii) declare 
effective post-effective amendments to registration statements; and (iii) qualify an offering statement or a post-
qualification amendment under 17 CFR 230.251 et seq. (“Regulation A”). Moreover, our conclusion that the 
Federal securities statutes do not override the FAA in the context of issuer-investor mandatory arbitration 
provisions is not limited to this context. This same conclusion also applies, for example, if an Exchange Act 
reporting issuer were to amend its bylaws or corporate charter to adopt an issuer-investor mandatory arbitration 
provision. 
9
  15 U.S.C. 77h(a) (“section 8(a)”).  
10
 17 CFR 230.461 (“Rule 461”). 
11
     Section 4A of the Exchange Act gives the Commission the authority to delegate its functions to a division of the 
Commission. See 15 U.S.C. 78d-1(a). The Commission retains a discretionary right to review any division use 
 
 

A.   Acceleration of a Registration Statement’s Effectiveness 
Section 5 of the Securities Act requires that a registration statement must be in effect as 
to a security before an issuer may sell it.
12
 Section 8(a) provides that a Securities Act registration 
statement becomes effective automatically 20 calendar days after it is filed. Securities Act 
Rule 473(a)
13
 permits an issuer to include a “delaying amendment” on the front page of a 
registration statement that extends the effective date to: (1) 20 calendar days after the issuer 
complies with Rule 473(b);
14
 or (2) an indefinite period that will end when the Commission 
grants the issuer’s request to accelerate the effective date of the registration statement. The issuer 
may submit a request for acceleration under Rule 461 specifying when it wants the registration 
statement declared effective. The staff, acting pursuant to its delegated authority, will accelerate 
the effective date of a registration statement if it meets the criteria under section 8(a) and Rule 
461.
15
 
The section 8(a) criteria are primarily focused on ensuring complete and adequate 
disclosure of material information to the public. Additionally, the criteria require consideration 
of “the public interest and the protection of investors.”
16
 C ourts have considered the scope of the 
public interest and investor protection standard in the context of the Federal securities laws and 
determined that, when applying this standard, it is only permissible to consider those matters 
 
 
of delegated authority. See 15 U.S.C. 78d-1(b). The Director of the Division of Corporation Finance possesses 
delegated authority to accelerate effectiveness of a registration statement under the Securities Act and the 
Exchange Act, declare effective post-effective amendments to registration statements, and to qualify an offering 
statement and an amendment to an offering statement under Regulation A. See 17 CFR 200.30-1. The Director 
of the Division of Investment Management possesses similar delegated authority to accelerate effectiveness of a 
registration statement under the Securities Act and the Exchange Act and declare effective post-effective 
amendments to registration statements. See 17 CFR 200.30-5. Throughout this statement, any statements about 
the Division of Corporation Finance or the Division of Investment Management declining to accelerate 
effectiveness of a registration statement mean declining to use their delegated authority to accelerate 
effectiveness.  
12
     15 U.S.C. 77e(a). 
13
     17 CFR 230.473(a). 
14
     17 CFR 230.473(b). 
15
     Certain Securities Act registration statements become effective automatically upon filing with the Commission 
and do not require acceleration. See, e.g., 17 CFR 230.462. 
16
  See section 8(a) and Rule 461(b). 

over which the Commission has authority under the Federal securities laws.
17
  
B.   The Arbitration Act and Issuer-Investor Mandatory Arbitration Provisions 
 
During the registration process, issuers have on occasion asked whether the presence of 
an issuer-investor mandatory arbitration provision would impact acceleration of the effectiveness 
of their registration statement.
18
 An issuer-investor mandatory arbitration provision may 
implicate the Arbitration Act, which establishes a “liberal Federal policy favoring arbitration 
agreements.”
19
 Section 2 of the statute, which is the FAA’s principal substantive provision, 
provides in pertinent part that “[a] written provision in . . . a contract evidencing a transaction 
involving commerce to settle by arbitration a controversy thereafter arising out of such contract 
or transaction . . . shall be valid, irrevocable, and enforceable.”
20
  
Whether the FAA may apply to an issuer-investor mandatory arbitration provision turns 
in the first instance on whether there is a  valid and enforceable written agreement to arbitrate.
21
 
 
 
17
  See Business Roundtable v. SEC, 905 F.2d 406, 412 (D.C. Cir. 1990) (“Business Roundtable”) (holding that the 
Commission could not rely on the statutory mandate to “protect investors and the public interest” to take 
regulatory action that would “overturn or at least impinge severely on the tradition of state regulation of 
corporate law”) and id. at   413-14 (citation modified) (explaining that statutory language about the “public 
interest” “must be limited to ‘the purposes Congress had in mind when it enacted the legislation,’” and such 
language cannot be read to permit the Commission to regulate areas that Congress has not assigned to the 
agency (quoting NAACP v. FPC, 425 U.S. 662, 670 (1976) (“NAACP”)). See generally FCC v. Consumers’ 
Research, 145 S.Ct. 2482, 2503 (2025) (explaining that the Supreme Court has “long held that the words 
‘public interest’ in a regulatory statute do not encompass the general public welfare but rather take meaning 
from the purposes of the regulatory legislation” (citation modified)); NAACP, 425 U.S. at 670 (rejecting the 
argument that the Federal Power Commission’s broad “public interest” mandate authorized it to promulgate 
rules prohibiting its regulated entities from engaging in discriminatory employment practices generally). Similar 
limitations apply to the “protection of investors” language in section 8(a). See generally Davis v. Mich. Dept. of 
Treasury, 489 U.S. 803, 809 (1989) (explaining that “statutory language cannot be construed in a vacuum,” but 
rather “the words of a statute must be read in their context and with a view to their place in the overall statutory 
scheme”). 
18
     The timing of when an issuer requests acceleration is often tied to market conditions, and the inability to predict 
with certainty whether the staff would exercise its delegated authority or have the matter considered by the 
Commission poses challenges for issuers. 
19
  CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012) (“CompuCredit Corp.”) (quoting Moses H. Cone 
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). 
20
 9 U.S.C. 2. 
21
  Galloway v. Santander Consumer USA, Inc., 819 F.3d 79, 89 (4th Cir. 2016) (explaining that “application of the 
FAA requires demonstration of ... a written agreement that includes an arbitration provision which purports to 
cover the dispute” (citation modified)). Courts have not interpreted the FAA to require “written agreements” to 
be signed. See, e.g., Seawright v. Am. Gen. Fin. Servs., Inc., 507 F.3d 967, 978 & n.5 (6th Cir. 2007) 
 
 

Assuming it is written, whether an agreement to arbitrate is valid and enforceable is generally 
determined based on “the contract law of the state governing the agreement.”
22
 H owever, a state 
law that “target[s] the enforceability of [mandatory] arbitration agreements either by name or by 
more subtle methods, such as by ‘interfering with fundamental attributes of arbitration’” may be 
preempted by the Arbitration Act.
23
 The applicability of the FAA to a particular issuer-investor 
mandatory arbitration provision is a legal matter implicating the intersection of a Federal statute 
that Congress did not authorize the Commission to administer, and the unique laws of the state or 
 
 
(explaining that “arbitration agreements under the FAA need to be written, but not necessarily signed” 
(emphasis in original)); Caley v. Gulfstream Aero. Corp., 428 F.3d 1359, 1369 (11th Cir. 2005) (“Gulfstream 
Aero. Corp.”) (“We readily conclude that no signature is needed to satisfy the FAA’s written agreement 
requirement.”); Tinder v. Pinkerton Sec., 305 F.3d 728, 736 (7th Cir. 2002) (explaining that although “the FAA 
requires arbitration agreements to be written, it does not require them to be signed”); Valero Refining, Inc. v. 
M/T Lauberhorn, 813 F.2d 60, 64 (5th Cir. 1987) (“We note also that section three of the Act does not require 
that a charter party be signed in order to enforce an arbitration agreement contained within it.”); McAllister 
Bros., Inc. v. A&S Transp. Co., 621 F.2d 519, 524 (2d Cir. 1980) (explaining that “a party may be bound by an 
agreement to arbitrate even in the absence of a signature”); Medical Development Corp. v. Indus. Molding 
Corp., 479 F.2d 345, 348 (10th Cir. 1973) (“it [is] not necessary that there be a simple integrated writing or that 
a party sign the writing containing the arbitration clause.”). 
22
  Banks v. Mitsubishi Motors Credit of Am., Inc., 435 F.3d 538, 540 (5th Cir. 2005); see, e.g., Memmer v. United 
Wholesale Mortg., LLC, 135 F.4th 398, 404 (6th Cir. 2025) (“Whether the parties entered a valid agreement to 
arbitrate is a question of state contract law.”); Marshall v. Georgetown Mem’l Hosp., 112 F.4th 211, 218 (4th 
Cir. 2024) (“Whether an agreement to arbitrate was formed is a question of ordinary state contract law 
principles.” (quoting Rowland v. Sandy Morris Fin. & Estate Planning Servs., LLC, 993 F.3d 253, 258 (4th Cir. 
2021)) (citation modified)); Rodgers-Rouzier v. Am. Queen Steamboat Operating Co., LLC, 104 F.4th 978, 991 
(7th Cir. 2024) (“An arbitration agreement is just a type of contract, and the FAA does not itself provide a 
substantive law governing the formation or general interpretation of contracts, so ordinary state contract law 
always fills in crucial gaps in any arbitration agreement.”); Meyer v. Uber Techs., Inc., 868 F.3d 66, 74 (2d Cir. 
2017) (“State law principles of contract formation govern the arbitrability question.” (quoting Nicosia v. 
Amazon.com, Inc., 834 F.3d 220, 231 (2d Cir. 2016))); Donaldson Co., Inc. v. Burroughs Diesel, Inc., 581 F.3d 
726, 731 (8th Cir. 2009) (explaining that “state contract law governs the threshold question of whether an 
enforceable arbitration agreement exists between litigants”); Gulfstream Aerospace Corp., 428 F.3d at 1368 
(“[I]n determining whether a binding agreement arose between the parties, courts apply the contract law of the 
particular state that governs the formation of contracts.”). The FAA also contemplates that in some instances 
mandatory arbitration agreements may be governed by the laws of a foreign jurisdiction. See generally 9 U.S.C. 
202 (addressing arbitration agreements that may implicate foreign jurisdictions). 
23
  Epic Systems Corp. v. Lewis, 584 U.S. 497, 508 (2018) (“Epic Systems Corp.”) (citation modified); see also 
Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 478 
(1989) (“[T]he FAA pre-empts state laws which require a judicial forum for the resolution of claims which the 
contracting parties agreed to resolve by arbitration.”); see also, e.g., Southland Corp. v. Keating, 465 U.S. 1, 10-
16 (finding preempted a state statute which rendered agreements to arbitrate certain franchise claims 
unenforceable); Perry v. Thomas, 482 U.S. 483, 490 (1987) (finding preempted a state statute which rendered 
unenforceable private agreements to arbitrate certain wage collection claims). While the Supreme Court has 
determined that state laws that target arbitration are preempted, section 2 of the FAA does include a narrow 
“savings clause” that “permits arbitration agreements to be declared unenforceable ‘upon such grounds as exist 
at law or in equity for the revocation of any contract.’” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 
(2011) (“Concepcion”) (quoting section 2 of the FAA). The Supreme Court has held that that this savings clause 
allows “‘generally applicable contract defenses, such as fraud, duress, or unconscionability.’” Id. (quoting 
Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). 

other jurisdiction governing the provision.
24
 Accordingly, we do not consider it within the 
Commission’s purview to conclude whether any particular issuer-investor mandatory arbitration 
provision is enforceable for purposes of the FAA.
 
  
C.   Effect of Supreme Court Case L aw Developments Regarding the FAA on the   
Application of Section 8(a)’s “Public Interest/Investor Protection” Standard  
 
Assuming the FAA applies to a particular issuer-investor mandatory arbitration 
provision, there is a separate question whether the Federal securities statutes override the FAA. 
In the past, the Federal securities statutes were thought to potentially override the FAA because 
issuer-investor mandatory arbitration provisions could be viewed as inconsistent with the Federal 
securities statutes in at least two respects: (1) issuer-investor mandatory arbitration provisions 
could violate the anti-waiver provisions of the Federal securities statutes by foreclosing a judicial 
forum;
25
 and (2) such provisions could unduly impede the ability of investors to bring private 
actions to vindicate their rights under the Federal securities laws by foreclosing class action 
litigation in courts. 
 After considering the Supreme Court’s jurisprudence relating to the FAA and analyzing 
case-law developments involving the intersection of the FAA and other Federal statutes, we have 
concluded that, in the context of issuer-investor mandatory arbitration provisions, the Federal 
 
 
24
     To illustrate some of the potential complexities involved, consider Delaware corporate law. Corporate charters 
and bylaws would appear to constitute written agreements. See, e.g., Centaur Partners, IV v. Nat’l Intergroup, 
Inc., 582 A.2d 923, 928 (Del. 1990) (citing cases) (“Corporate charters and by-laws are contracts among the 
shareholders of a corporation and the general rules of contract interpretation are held to apply.”). Thus, an 
arbitration provision in a Delaware corporate charter or bylaw may constitute a written agreement to arbitrate 
for purposes of the FAA. But see Manesh & Joseph A. Grundfest, The Corporate Contract and Shareholder 
Arbitration, 98 NYU L. R
EV. 1106 (2023); Ann M. Lipton, Manufactured Consent: The Problem of Arbitration 
Clauses in Corporate Charters and Bylaws, 104 G
EO. L.J. 583 (2016). 8 DEL. CODE ANN. Tit. 8, Section 115(c) 
(2025). 
25
     15 U.S.C. 77n is the anti-waiver provision in the Securities Act (“section 14”). (“Any condition, stipulation, or 
provision binding any person acquiring any security to waive compliance with any provision of this title or of 
the rules and regulations of the Commission shall be void.”). 15 U.S.C. 78cc(a) is the anti-waiver provision in 
the Exchange Act (“section 29(a)”) (“Any condition, stipulation, or provision binding any person to waive 
compliance with any provision of this title or any rule or regulation thereunder, or any rule of a self-regulatory 
organization, shall be void.”). 15 U.S.C. 77aaaa (section 327 of the Trust Indenture Act of 1939 (“Trust 
Indenture Act”), 15 U.S.C. 77aaa et seq.); 15 U.S.C. 80a-46(a) (section 47(a) of the Investment Company Act 
of 1940 (“Investment Company Act”), 15 U.S.C. 80a-1 et seq.); and 15 U.S.C. 80b-15(a) (section 215(a) of the 
Investment Advisers Act of 1940 (“Investment Advisers Act”), 15 U.S.C. 80b-1 et seq.) contain similar anti-
waiver provisions. 

securities statutes do not override the Arbitration Act’s policy favoring enforcement of 
arbitration agreements. This conclusion follows from the fact that nothing in the text of the anti-
waiver provisions or any other provision of the Federal securities statutes demonstrates a clearly 
expressed congressional intention to except issuer-investor mandatory arbitration provisions 
from the Arbitration Act’s policy favoring arbitration. Because the Federal securities statutes do 
not override the Arbitration Act when it applies to the enforceability of an issuer-investor 
mandatory arbitration provision, the existence of such a provision is not within the ambit of 
appropriate considerations under section 8(a)’s public interest and investor protection standard 
and will not impact determinations whether to accelerate the effective date of a registration 
statement.
26
 
1.   Nothing in the text of the anti-waiver provisions or any other 
provisions of the Federal securities statutes could be construed as 
a clearly expressed congressional intention that the Arbitration 
Act would not apply to Federal securities laws claims. 
 
 Applying current and relevant Supreme Court precedent, there is no basis to conclude 
that either the anti-waiver provisions or any other provision of the Federal securities statutes 
displaces the primacy of the Arbitration Act in the context of issuer-investor mandatory 
arbitration provisions. 
For many decades, the anti-waiver provision set forth in section 14 was understood to 
prohibit issuer-investor mandatory arbitration provisions relating to Federal securities law 
claims. In a 1953 decision involving the enforceability of an arbitration agreement between a 
brokerage firm and its customers, the Supreme Court held that “the right to select the judicial 
forum is the kind of ‘provision’ that cannot be waived under [section] 14 of the Securities 
Act.”
27
 In reaching this conclusion, the Court agreed with the firm’s customer (who purchased 
 
 
26
 See supra note 17 (citing Business Roundtable). 
27
 Wilko v. Swan, 346 U.S. 427, 434-35 (1953) (“Wilko”) (overruled by Rodriguez de Quijas v. 
Shearson/American Express, Inc., 490 U.S. 477 (1989) (“Rodriguez”)). 

the securities at issue in the dispute) that “the purpose of Congress [in enacting the anti-waiver 
provision] was to assure that sellers could not maneuver buyers into a position that might weaken 
their ability to recover under the Securities Act.”
28
 The Court expressed the view that, “[w]hile a 
buyer and seller of securities, under some circumstances, may deal at arm’s length on equal 
terms, it is clear that the Securities Act was drafted with an eye to the disadvantages under which 
buyers labor. Issuers of and dealers in securities have better opportunities to investigate and 
appraise the prospective earnings and business plans affecting securities than buyers. It is 
therefore reasonable for Congress to put buyers of securities covered by that [Securities] Act on 
a different basis from other purchasers” who are otherwise subject to the terms of the FAA.
29
  
But in a pair of decisions in the late 1980s, the Supreme Court took a different course.
30
 
The first of these was a 1987 decision in which the Court considered whether the anti-waiver 
provision in section 29(a) precludes enforcement of an arbitration agreement between a broker-
dealer and its customer. Even though the text of the Exchange Act’s anti-waiver provision is 
substantively identical to the Securities Act’s provision, the Court held that it does not prohibit 
the enforcement of arbitration agreements.
31
 T he Court explained that by its terms the provision 
declares void only an agreement that waives “compliance with any provision of” the Exchange 
Act, which the Court read to prohibit only waiver of the act’s substantive obligations.
32
 Based on 
that understanding, the Court concluded that the anti-waiver provision does not render 
 
 
28
 Id. at 432. 
29
 Id. at 435. 
30
 See Rodriguez, 490 U.S. at 485-86 and Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 228-38 
(1987) (“McMahon”). 
31
  McMahon, 482 U.S. at 228-29. The case involved a fraud claim under section 10(b) of the Exchange Act that a 
customer had brought against a broker-dealer. 15 U.S.C. 78j(b). The arbitration proceeding was administered by 
a self-regulatory organization (“SRO”). See 15 U.S.C. 78c(a)(26) (Exchange Act section 3(a)(26)). The 
Commission filed an amicus curiae brief with the Supreme Court arguing that the anti-waiver provisions of the 
Federal securities statutes did not preclude enforcement of the arbitration agreement between the brokerage firm 
and its customer because of the Commission’s regulatory oversight over SRO arbitration procedures under 
section 19 of the Exchange Act (“section 19”). 15 U.S.C. 78s. The amicus brief urged the Supreme Court to 
adopt the position that a separate analysis would be required in situations where the Commission lacked 
statutory oversight authority. 
32
  McMahon, 482 U.S. at 228-29. 

unenforceable agreements that waive section 27 of the Exchange Act,
33
 which confers Federal 
courts with exclusive subject matter jurisdiction over violations of that A ct, because this 
jurisdictional provision does not impose any statutory duties.
34
 
Two years later, in another dispute involving a brokerage firm and its customer, the Court 
reconsidered whether the anti-waiver provision in section 14 precludes the enforcement of 
mandatory arbitration arrangements. Based on the text of the anti-waiver provision, the Court 
held that section 14 applies only to the substantive provisions of the Securities Act, not to its 
jurisdictional or procedural provisions.
35
 Further, the Court explained that its prior holding in 
1953 reflected a judicial hostility to arbitration that it has since abandoned:  
Once the outmoded presumption of disfavoring arbitration proceedings is set to 
one side, it becomes clear that the right to select the judicial forum and the wider 
choice of courts are not such essential features of the Securities Act that [section] 
14 is properly construed to bar any waiver of these provisions. Nor are they so 
critical that they cannot be waived under the rationale that the Securities Act was 
intended to place buyers of securities on an equal footing with sellers.
36
 
 
The Court also explained that “[t]o the extent that [its prior decision] rested on suspicion of 
arbitration as a method of weakening the protections afforded in the substantive law to would-be 
complainants, it has fallen far out of step with our current strong endorsement of the Federal 
statutes favoring this method of resolving disputes.”
37
 The Court concluded that “resort to the 
arbitration process does not inherently undermine any of the substantive rights afforded to 
petitioners under the Securities Act.”
38
 
Although these two Supreme Court decisions applying the anti-waiver provisions did not 
involve the precise issue of issuer-investor mandatory arbitration provisions, we discern no 
 
 
33
     15 U.S.C. 78aa. 
34
 McMahon, 482 U.S. at 228. 
35
  Rodriguez, 490 U.S. at 482. 
36
  Id. at 481. 
37
  Id. 
38
  Id. 485-86. 

reason to believe that any different result should follow.
39
 Accordingly, we believe that the 
inability to proceed in a judicial forum as a result of an issuer-investor mandatory arbitration 
provision would not violate the anti-waiver provisions of the Federal securities statutes. 
 Moreover, in subsequent decisions, the Supreme Court has noted that, in any Federal 
statute enacted after the Arbitration Act, which would include each of the Federal securities 
statutes, there must be a “clearly expressed congressional intention” to override the act.
40
 As the 
Court has explained, “the intention must be ‘clear and manifest,’”
41
 and while the Court has not 
gone so far as to require unambiguous statutory language overriding the Arbitration Act, the 
Court has explained that when Congress does not displace the FAA using unambiguous statutory 
language, there is a “strong presumption” that the FAA applies exclusively to any issues 
regarding the enforceability of the arbitration agreement, and the other Federal statute that gives 
 
 
39
     In rejecting Wilko’s negative assumptions regarding arbitration, the McMahon and Rodriguez decisions relied 
on the enhanced oversight of the SROs’ arbitration processes (through greater authority over SRO rules) that the 
Commission obtained as a result of certain amendments to section 19 in 1975. See McMahon, 482 U.S. at 233-
34 (“Since the 1975 amendments to [section] 19 of the Exchange Act ... the Commission has had expansive 
power to ensure the adequacy of the arbitration procedures employed by the SROs. No proposed rule change 
may take effect unless the SEC finds that the proposed rule is consistent with the requirements of the Exchange 
Act, 15 U.S.C. [section] 78s(b)(2); and the Commission has the power, on its own initiative, to ‘abrogate, add 
to, and delete from’ any SRO rule if it finds such changes necessary or appropriate to further the objectives of 
the Act, 15 U.S.C. [section] 78s(c).”) and id. at 233 (stating that “[e]ven if Wilko’s assumptions regarding 
arbitration were valid at the time Wilko was decided, most certainly they do not hold true today for arbitration 
procedures subject to the SEC’s oversight authority”). See also Rodriguez, 490 U.S. at 483 (referencing the 
Commission’s “authority to oversee and to regulate [SRO-administered] arbitration procedures” in support of 
its rejection of Wilko’s aversion to arbitration as an appropriate forum to entertain claims arising under the 
Securities Act). We recognize that the broker-dealer arbitration arrangements at issue in McMahon and 
Rodriguez were administered by SROs, which would not be the case with issuer-investor mandatory arbitration 
provisions. Nonetheless, we do not understand either McMahon or Rodriguez to require that the Commission 
have supervisory authority over the particular arbitration process employed in order for an issuer-investor 
mandatory arbitration provision to be permissible under the Federal securities statutes. First, both decisions 
were grounded on the separate rationale that Federal policy strongly favors enforcement of arbitration 
agreements and that arbitration itself is a suitable means of resolving the kinds of commercial disputes arising 
under the Federal securities laws. Second, any such understanding would be inconsistent with subsequent 
Supreme Court decisions that, as discussed infra, establish a strong presumption that the Arbitration Act’s 
policy favoring arbitration should control absent a clear and manifest statutory indication otherwise. Lastly, in 
the three decades since McMahon and Rodriguez were decided, no subsequent decision has referred to 
government oversight as a factor to consider in determining whether to enforce an arbitration agreement. 
40
  Epic Systems Corp., 584 U.S. at 510 (quoting Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 
528, 533 (1995)). 
41
  Id. at 510 (citations and internal quotation marks omitted); see also id. (admonishing that a party arguing that 
another Federal statute displaces the FAA’s mandate bears a “heavy burden”). 

rise to the underlying substantive claims has no relevance to any arbitration issues.
42
 
 In applying this standard, we can discern nothing in the Federal securities statutes that 
demonstrates a clear and manifest congressional intention to displace the FAA in the context of 
issuer-investor mandatory arbitration agreements. The absence of any clearly expressed 
congressional intent is particularly striking given that in 2010 Congress expressly granted the 
Commission rulemaking authority to limit, condition, or prohibit arbitration agreements between 
broker-dealers and their customers and comparable authority over arbitration agreements 
between, among others, investment advisers and their clients.
43
  
2.   Under Supreme Court precedent, the FAA is not displaced merely 
because bilateral arbitration may undermine the economic 
incentive of some persons to bring private Federal securities law 
claims.  
  
When considering section 8(a) and Rule 461’s public interest and investor protection 
standard for accelerating the effectiveness of registration statements, a concern has been that 
issuer-investor mandatory arbitration provisions, which are presumed to be bilateral in nature,
44
 
could unduly impede the ability of investors to bring private actions to enforce the Federal 
 
 
42
  Id. at 510-11 (citation modified) (citing United States v. Fausto, 484 U.S. 439, 452, 453 (1988)). See, e.g., id. at 
517 (explaining that the Court has “stressed that the absence of any specific statutory discussion of arbitration” 
must be considered by courts to be “an important and telling clue that Congress has not displaced the 
Arbitration Act”) and CompuCredit Corp., 565 U.S. at 104 (explaining that, in contrast to clear statutory 
provisions that deal expressly with arbitration, it is “unlikely” that “Congress would have sought to achieve the 
same result in the [statute at issue] through a combination of the nonwaiver provision” and certain other 
statutory provisions that never expressly reference arbitration). 
43
  See 15 U.S.C. 78o(o) (“section 15(o)”) (“Authority to Restrict Mandatory Pre-dispute Arbitration .—The 
Commission, by rule, may prohibit, or impose conditions or limitations on the use of, agreements that require 
customers or clients of any broker, dealer, or municipal securities dealer to arbitrate any future dispute between 
them arising under the Federal securities laws, the rules and regulations thereunder, or the rules of a self-
regulatory organization if it finds that such prohibition, imposition of conditions, or limitations are in the public 
interest and for the protection of investors.”) and 15 U.S.C. 80b-5(f) (“section 205(f))”) (“Authority to Restrict 
Mandatory Pre-dispute Arbitration.—The Commission, by rule, may prohibit, or impose conditions or 
limitations on the use of, agreements that require customers or clients of any investment adviser to arbitrate any 
future dispute between them arising under the Federal securities laws, the rules and regulations thereunder, or 
the rules of a self-regulatory organization if it finds that such prohibition, imposition of conditions, or 
limitations are in the public interest and for the protection of investors.’’). See also Dodd-Frank Wall Street 
Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, 124 Stat. 1376, section 921 (amending the 
Exchange Act to add section 15(o) and amending the Investment Advisers Act to add section 205(f)). 
44
  See, e.g., Lamps Plus, Inc. v. Varela, 587 U.S. 176 (2019). 

securities laws by foreclosing class-wide proceedings.
45
  
 But in 2013, the Supreme Court rejected a nearly identical argument involving private 
claims under the Federal antitrust statutes. I  n American Express Co. v. Italian Colors 
Restaurant,
46
 the Court held that the Arbitration Act requires the enforcement of a mandatory 
arbitration agreement for bilateral arbitration even though the plaintiff’s cost of individually 
arbitrating the antitrust claims would exceed the potential recovery. In the Court’s view, 
enforcement of the arbitration requirement would not “contravene the policies of the antitrust 
laws” because those laws “do not guarantee an affordable procedural path to the vindication of 
every claim.”
47
 
In support of this conclusion, the Court observed that nothing in the Federal antitrust 
statutes affords a right to bring a class action and, in fact, those statutes were enacted years 
before class actions were even authorized in Federal courts.
48
 No person seeking to vindicate a 
 
 
45
     For completeness, we note that there were two different legal theories (both based on dicta in Supreme Court 
decisions from the 1980s) through which this policy concern could have provided a legal basis for concluding 
that issuer-investor arbitration agreements were prohibited under the Federal securities statutes. The first 
involved a potential application of the anti-waiver provisions that the Supreme Court did not consider in 
McMahon and Rodriguez—i.e., whether undermining or effectively eliminating the economic incentive to 
pursue a Federal securities law violation would violate the anti-waiver provisions by in effect “weakening” 
investors’ ability to vindicate their rights to recover under the securities laws. See McMahon, 482 U.S. at 230-
31 (suggesting in dicta that the anti-waiver provision of the Exchange Act might preclude the enforcement of an 
arbitration requirement if it “weakened” the ability of those protected by the securities laws to “vindicate” their 
ability to recover). The other legal theory concerned the potential invocation of the “effective vindication” 
exception, which is a judge-made exception to the FAA’s policy favoring arbitration agreements. See Mitsubishi 
Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 n. 19 (1985). This exception—which the 
Supreme Court has discussed only in dicta—would “prevent prospective waiver of a party’s right to pursue 
statutory remedies,” id., and could potentially have been used to argue that bilateral arbitration effectively 
denies injured investors a meaningful opportunity to seek a remedy by effectively eliminating their economic 
incentive to do so. As discussed above, however, the Supreme Court has now effectively foreclosed any 
argument that an arbitration agreement should not be enforced if, by precluding class-action relief, it would 
eliminate the economic incentive for many victims to seek relief for their private securities law claims.  
46
     570 U.S. 228 (2013) (“Italian Colors”). 
47
 Id. at 233. When the decision speaks about an “affordable procedural path,” it appears to mean a procedural 
path that is worth pursuing financially given the potential monetary recovery. See id. at 231 (“In resisting the 
motion, respondents submitted a declaration from an economist who estimated that the cost of an expert 
analysis necessary to prove the antitrust claims would be ‘at least several hundred thousand dollars, and might 
exceed $1 million,’ while the maximum recovery for an individual plaintiff would be $12,850, or $38,549 when 
trebled.”); id. at 236 (“But the fact that it is not worth the expense involved in proving a statutory remedy does 
not constitute the elimination of the right to pursue that remedy.”) (emphasis excluded). 
48
 Id. at 234. The Sherman Act, 15 U.S.C. 1-7, was enacted in 1890. The Clayton Act, 15 U.S.C. 12-27, and the 
Federal Trade Commission Act, 15 U.S.C. 41-58, were enacted in 1914. 

claim under the Federal antitrust statutes in a bilateral arbitration proceeding that forecloses 
class-action or collective proceedings would, in the Court’s view, be any worse off than a person 
proceeding under those statutes when they were enacted because at that time there was no 
allowance for class or collective procedures.
49
 Based on that historical perspective, the Court 
ultimately found no difficulty with enforcing the agreement for bilateral arbitration and 
concluded that the FAA controls.
50
 As the Court explained, because nothing in the Federal 
antitrust statutes affords a right to vindicate one’s private claims through class or collective 
actions, the “contrary congressional command” required by the Court’s decisions to displace the 
Arbitration Act’s policy favoring arbitration was lacking.
51
 
Similar to the Court’s findings with the Federal antitrust statutes, no provision in the 
Federal securities statutes “guarantee[s] an affordable procedural path to the vindication of every 
claim.”
52
 Further, like the Federal antitrust statutes, the Federal securities statutes do not 
expressly include a right to proceed through class actions or collective actions. Finally, because 
the Securities Act and the Exchange Act (like the antitrust statutes at issue in Italian Colors) 
were enacted before class-action proceedings were permitted, it stands to reason that “the 
individual suit” based on claims under those acts that was considered adequate and consistent at 
the time those statutes were enacted remains so notwithstanding the advent of class-action 
litigation.
53
 Accordingly, the potential for an issuer-investor mandatory arbitration provision to 
 
 
49
 Italian Colors 570 U.S. 228, at 236. (“The class-action waiver merely limits arbitration to the two contracting 
parties. It no more eliminates those parties’ right to pursue their statutory remedy than did federal law before its 
adoption of the class action for legal relief in 1938.”) (internal citations omitted). See also id. at 236-37 
(explaining that “the individual suit that was considered adequate to assure ‘effective vindication’ of a federal 
right before adoption of class-action procedures did not suddenly become ‘ineffective vindication’ upon their 
adoption”). 
50
  Id. at 234 (explaining that because the parties agreed to bilateral arbitration, “it would be remarkable for a court 
to erase that expectation”). 
51
  Id. at   232-33. 
52
  Id. at 233. 
53
  See id. at 236-37. This argument does not apply to claims under the Trust Indenture Act, Investment Company 
Act, or the Investment Advisers Act because those statutes were enacted after the Federal rules of civil 
 
 

diminish, or even eliminate, the economic incentive for some investors to bring private claims 
under the Federal securities laws is not a sufficient basis to conclude that the Federal securities 
statutes displace the Arbitration Act’s mandate.
54
 
III. Conclusion 
For the reasons discussed above, the Commission has determined that the presence of an 
issuer-investor mandatory arbitration provision will not impact decisions regarding whether to 
accelerate the effectiveness of a registration statement. While the discussion above focuses on 
the Court’s application of the FAA, we acknowledge there may be instances in which the FAA 
does not apply, such as where there is no valid and enforceable written agreement for purposes 
of the FAA. Given that neither the Commission nor the staff is well-positioned to conclusively 
determine when the FAA applies,
55
 and in light of the case-law developments discussed above, 
we believe that any relevant issues concerning an issuer-investor mandatory arbitration provision 
are best addressed through complete and adequate disclosure of material information in the 
registration statement. Accordingly, when considering acceleration requests pursuant to section 
8(a) and Rule 461, the staff will focus on the adequacy of the registration statement’s 
disclosures, including disclosure regarding issuer-investor mandatory arbitration provisions. 
Nothing in this statement should be understood to express any views on the specific terms of an 
arbitration provision, or whether arbitration provisions are appropriate or optimal for issuers or 
 
 
procedure were amended to permit class-wide relief. Nonetheless, we believe that the FAA’s mandate controls 
even if injured persons lack an economic incentive to pursue bilateral arbitration for claims under these statutes. 
Because these statutes do not afford an entitlement to class-wide relief and Congress did not provide such a 
right when it authorized class-wide procedures in Federal litigation, they lack a clear expression of a 
congressional intention to displace the FAA. See id. at 234 (explaining that “congressional approval of Rule 23 
[of the Federal Rules of Civil Procedure]” does not “establish an entitlement to class proceedings for the 
vindication of statutory rights”). 
54
     The Supreme Court has instructed that the FAA’s policy favoring arbitration agreements is not impacted even 
when the one party with superior bargaining power may have imposed the arbitration requirement. See 
Concepcion, 563 U.S. at 340-41. 
55
  See supra notes 19-24 and accompanying text. 

investors. 
IV. Other Matters 
Pursuant to the Congressional Review Act,
56
 the Office of Information and Regulatory 
Affairs has designated this policy statement as not a “major rule,” as defined by 5 U.S.C. 804(2). 
This statement is a significant regulatory action under Executive Order 12866, as amended, and 
has been reviewed by the Office of Management and Budget. 
This statement does not impose any new rules, regulations, or other requirements on 
issuers, but could influence issuer behavior to the extent that an issuer did not previously have an 
issuer-investor mandatory arbitration provision. This is in part due to concerns about potential 
impacts on acceleration requests. After publication of this statement, it is possible that some 
issuers may adopt issuer-investor mandatory arbitration provisions, which could potentially deter 
or prevent some investors from filing civil actions arising under the Federal securities laws. For 
both issuers and investors, adoption of such provisions would likely impact the cost of resolving 
future investor claims for damages and the extent of any monetary or other relief that might be 
awarded in connection with such claims. However, it is difficult to estimate how many issuers 
are likely to adopt issuer-investor mandatory arbitration provisions, or the ultimate economic 
impact of any such provisions, if adopted.  
Some issuers may choose not to include such provisions due to potential state law 
considerations or concern about potential negative reactions from shareholders and other 
investors. Actions or potential actions by others, including proxy voting advice businesses, stock 
exchanges, and institutional investors, can be expected to influence the number of issuers who 
adopt arbitration of issuer-investor claims arising under the Federal securities laws. Further, 
some issuers may already have issuer-investor mandatory arbitration provisions, irrespective of 
this statement. A number of other issuers may have no plans to register an offering or class of 
 
 
56
     5 U.S.C. 801 et seq. 

securities, and thus would not be affected by this statement. 
Statutory Authority 
The statement contained in this release is being adopted pursuant to the authority set forth 
in section 19 of the Securities Act and section 23 of the Exchange Act. 
List of Subjects in 17 CFR Parts 231 and 241 
Securities. 
Text of Amendments 
 For the reasons set forth in the preamble, the Commission is amending title 17, chapter II 
of the Code of Federal Regulations as follows: 
PART 231 — INTERPRETATIVE RELEASES RELATING TO THE SECURITIES ACT 
OF 1933 AND GENERAL RULES AND REGULATIONS THEREUNDER 
1. The authority for part 231 continues to read as follows: 
 Authority: 15 U.S.C. 77a et seq.  
2. Amend § 231 by adding an entry at the end of the table to read as follows: 
 
Subject 
Release No. Date 
Fed. 
Reg. 
Vol. and  
page 
*******    
Acceleration of Effectiveness of 
Registration Statements of Issuers 
with Certain Mandatory 
Arbitration Provisions 
33-11389 Sept. 17, 2025 
[INSERT FEDERAL 
REGISTER DOCUMENT 
CITATION]. 
 
PART 241 — INTERPRETATIVE RELEASES RELATING TO THE SECURITIES 
EXCHANGE ACT OF 1934 AND GENERAL RULES AND REGULATIONS 
THEREUNDER 

3. The authority for part 241 continues to read as follows: 
 Authority: 15 U.S.C. 78a et seq.  
4. Amend § 241 by adding an entry at the end of the table to read as follows: 
 
Subject 
Release No. Date 
Fed. 
Reg. 
Vol. and  
page 
*******    
Acceleration of Effectiveness of 
Registration Statements of Issuers 
with Certain Mandatory 
Arbitration Provisions 
34-103988 Sept. 17, 2025 
[INSERT FEDERAL 
REGISTER DOCUMENT 
CITATION]. 
 
 
 
By the Commission.  
Dated: September 17, 2025. 
 
 
Vanessa A. Countryman, 
Secretary. 

Conformed to Federal Register version 

SECURITIES AND EXCHANGE COMMISSION 

17 CFR Parts 231 and 241 

[Release No. 33-11389; 34-103988] 

RIN 3235-AN55 

Acceleration of Effectiveness of Registration Statements of Issuers with Certain Mandatory 

Arbitration Provisions 

AGENCY: Securities and Exchange Commission. 

ACTION: Final rule; Policy statement. 

SUMMARY: The Securities and Exchange Commission (“Commission”) is issuing this 

statement to inform the public that the presence of a provision requiring arbitration of investor 

claims arising under the Federal securities laws will not impact decisions regarding whether to 

accelerate the effectiveness of a registration statement. Accordingly, when making such 

decisions, the staff will focus on the adequacy of the registration statement’s disclosures, 

including disclosure regarding the arbitration provision. 

DATES: Effective date: September 19, 2025. 

FOR FURTHER INFORMATION CONTACT: Questions about specific filings should be 

directed to staff members responsible for reviewing the documents the issuer files with the 

Commission. For general questions about this statement, contact John Fieldsend, Special 

Counsel, at (202) 551-3430, Division of Corporation Finance, or Anna Sandor, Senior Counsel, 

or Yoon Choo, Senior Counsel, at (202) 551-6787, Division of Investment Management, U.S. 

Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. 

SUPPLEMENTARY INFORMATION: 
 

Table of Contents 
 
I. Introduction           
II. Discussion            
 A. Acceleration of a Registration Statement’s Effectiveness    
 B. The Arbitration Act and Issuer-Investor Mandatory Arbitration Provisions   



 C. Effect of Supreme Court Case Law Developments Regarding the FAA on the  
Application of Section 8(a)’s “Public Interest/Investor  
Protection” Standard          
1. Nothing in the text of the anti-waiver provisions or any other provisions of 

the Federal securities statutes could be construed as a clearly expressed 
congressional intention that the Arbitration Act would not apply to Federal 
securities laws claims.         

  2.  Under Supreme Court precedent, the FAA is not displaced merely because  
bilateral arbitration may undermine the economic incentive of some  
persons to bring private Federal securities law claims.    

III.  Conclusion           
IV. Other Matters           
Statutory Authority   
 
I. Introduction 

This statement concerns requests to accelerate the effective date of registration statements 

filed under the Securities Act of 1933 (“Securities Act”)1 by issuers with a mandatory arbitration 

provision for investor claims arising under the Federal securities laws2 (“issuer-investor 

mandatory arbitration provision”).3 As discussed in further detail in section II.C. there have been 

a number of developments involving the U.S. Supreme Court’s (“Supreme Court” or “Court”) 

interpretation and application of the Federal Arbitration Act of 1925 (“FAA” or “Arbitration 

Act”)4 that inform such acceleration requests. In addition, as discussed in further detail in 

Section II.B., potential uncertainty exists regarding the intersection of the FAA and state law. For 

example, Delaware recently amended its General Corporation Law in a way that may prohibit 

certificates of incorporation or bylaws from including an issuer-investor mandatory arbitration 

 
 
1  15 U.S.C. 77a et seq. 
2  As used in this statement, the phrase “Federal securities laws” includes the Federal securities statutes and any 

rules and regulations issued thereunder, whereas the phrase “Federal securities statutes” includes only the 
relevant statutes. 

3  Issuer-investor mandatory arbitration provisions may be contained in an issuer’s articles or certificate of 
incorporation or bylaws. They may also be contained in indentures, limited partnership agreements, declarations 
of trust or trust agreements, American depositary receipts deposit agreements, or elsewhere. The use of the term 
“issuer-investor mandatory arbitration provision” is not meant to preclude (or foreclose) the possibility that 
issuers may seek to include other entities or persons related to, or connected with, the issuer within the scope of 
the arbitration provision. Relatedly, although we refer to issuer-investor mandatory arbitration provisions 
throughout as bilateral, it is possible that the issuer-investor mandatory arbitration provision may require 
investors to arbitrate certain claims involving parties other than the issuer. 

4  9 U.S.C. 1 through 16. The Arbitration Act was enacted prior to the enactment of all of the Federal securities 
statutes. 



provision.5 Other states may adopt different approaches on this issue. Notwithstanding these 

developments and potential uncertainty, the Commission has not spoken publicly on this topic 

even though, during the registration process, issuers have on occasion sought to include such a 

provision in their Securities Act registration statements.6  

In order to provide issuers with greater certainty concerning the Commission’s approach 

to requests to accelerate the effective date of a registration statement disclosing an issuer-

investor mandatory arbitration provision, we are issuing this policy statement. For the reasons 

explained in this statement, we have determined that the presence of an issuer-investor 

mandatory arbitration provision7 will not impact decisions whether to accelerate the 

effectiveness of a registration statement under the Securities Act.8 Accordingly, when 

considering acceleration requests pursuant to Securities Act section 8(a)9 and Rule 461 

thereunder,10 the staff will focus on the adequacy of the registration statement’s disclosures, 

including disclosure regarding issuer-investor mandatory arbitration provisions.11  

II. Discussion 

 
 
5  See 8 DEL. CODE ANN. Tit. 8, Section 115(c) (2025) (effective Aug. 1, 2025). Specifically, new paragraph (c) in 

section 115 permits the certificate of incorporation or bylaws to prescribe a forum or venue for certain claims 
that are not internal corporate claims but only if a stockholder may bring such claims in at least one court in the 
State of Delaware that has jurisdiction over such claims. This statement expresses no view on whether this or 
any other state law provision is consistent with the FAA.  

6  See, e.g., Amendment to Registration Statement on Form S-1, The Carlyle Group L.P., File No. 333-176685 
(Jan. 10, 2012). 

7  Conditions or restrictions that are part of the issuer-investor mandatory arbitration provision that may impact 
investors’ substantive rights under the Federal securities laws are outside the scope of this statement. 

8  We would also apply this conclusion to decisions whether to: (i) accelerate the effectiveness of registration 
statements filed under the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. 78a et seq.; (ii) declare 
effective post-effective amendments to registration statements; and (iii) qualify an offering statement or a post-
qualification amendment under 17 CFR 230.251 et seq. (“Regulation A”). Moreover, our conclusion that the 
Federal securities statutes do not override the FAA in the context of issuer-investor mandatory arbitration 
provisions is not limited to this context. This same conclusion also applies, for example, if an Exchange Act 
reporting issuer were to amend its bylaws or corporate charter to adopt an issuer-investor mandatory arbitration 
provision. 

9  15 U.S.C. 77h(a) (“section 8(a)”).  
10 17 CFR 230.461 (“Rule 461”). 
11  Section 4A of the Exchange Act gives the Commission the authority to delegate its functions to a division of the 

Commission. See 15 U.S.C. 78d-1(a). The Commission retains a discretionary right to review any division use 
 
 



A.   Acceleration of a Registration Statement’s Effectiveness 

Section 5 of the Securities Act requires that a registration statement must be in effect as 

to a security before an issuer may sell it.12 Section 8(a) provides that a Securities Act registration 

statement becomes effective automatically 20 calendar days after it is filed. Securities Act 

Rule 473(a)13 permits an issuer to include a “delaying amendment” on the front page of a 

registration statement that extends the effective date to: (1) 20 calendar days after the issuer 

complies with Rule 473(b);14 or (2) an indefinite period that will end when the Commission 

grants the issuer’s request to accelerate the effective date of the registration statement. The issuer 

may submit a request for acceleration under Rule 461 specifying when it wants the registration 

statement declared effective. The staff, acting pursuant to its delegated authority, will accelerate 

the effective date of a registration statement if it meets the criteria under section 8(a) and Rule 

461.15 

The section 8(a) criteria are primarily focused on ensuring complete and adequate 

disclosure of material information to the public. Additionally, the criteria require consideration 

of “the public interest and the protection of investors.”16 Courts have considered the scope of the 

public interest and investor protection standard in the context of the Federal securities laws and 

determined that, when applying this standard, it is only permissible to consider those matters 

 
 

of delegated authority. See 15 U.S.C. 78d-1(b). The Director of the Division of Corporation Finance possesses 
delegated authority to accelerate effectiveness of a registration statement under the Securities Act and the 
Exchange Act, declare effective post-effective amendments to registration statements, and to qualify an offering 
statement and an amendment to an offering statement under Regulation A. See 17 CFR 200.30-1. The Director 
of the Division of Investment Management possesses similar delegated authority to accelerate effectiveness of a 
registration statement under the Securities Act and the Exchange Act and declare effective post-effective 
amendments to registration statements. See 17 CFR 200.30-5. Throughout this statement, any statements about 
the Division of Corporation Finance or the Division of Investment Management declining to accelerate 
effectiveness of a registration statement mean declining to use their delegated authority to accelerate 
effectiveness.  

12  15 U.S.C. 77e(a). 
13  17 CFR 230.473(a). 
14  17 CFR 230.473(b). 
15  Certain Securities Act registration statements become effective automatically upon filing with the Commission 

and do not require acceleration. See, e.g., 17 CFR 230.462. 
16  See section 8(a) and Rule 461(b). 



over which the Commission has authority under the Federal securities laws.17  

B.   The Arbitration Act and Issuer-Investor Mandatory Arbitration Provisions 
 

During the registration process, issuers have on occasion asked whether the presence of 

an issuer-investor mandatory arbitration provision would impact acceleration of the effectiveness 

of their registration statement.18 An issuer-investor mandatory arbitration provision may 

implicate the Arbitration Act, which establishes a “liberal Federal policy favoring arbitration 

agreements.”19 Section 2 of the statute, which is the FAA’s principal substantive provision, 

provides in pertinent part that “[a] written provision in . . . a contract evidencing a transaction 

involving commerce to settle by arbitration a controversy thereafter arising out of such contract 

or transaction . . . shall be valid, irrevocable, and enforceable.”20  

Whether the FAA may apply to an issuer-investor mandatory arbitration provision turns 

in the first instance on whether there is a valid and enforceable written agreement to arbitrate.21 

 
 
17  See Business Roundtable v. SEC, 905 F.2d 406, 412 (D.C. Cir. 1990) (“Business Roundtable”) (holding that the 

Commission could not rely on the statutory mandate to “protect investors and the public interest” to take 
regulatory action that would “overturn or at least impinge severely on the tradition of state regulation of 
corporate law”) and id. at 413-14 (citation modified) (explaining that statutory language about the “public 
interest” “must be limited to ‘the purposes Congress had in mind when it enacted the legislation,’” and such 
language cannot be read to permit the Commission to regulate areas that Congress has not assigned to the 
agency (quoting NAACP v. FPC, 425 U.S. 662, 670 (1976) (“NAACP”)). See generally FCC v. Consumers’ 
Research, 145 S.Ct. 2482, 2503 (2025) (explaining that the Supreme Court has “long held that the words 
‘public interest’ in a regulatory statute do not encompass the general public welfare but rather take meaning 
from the purposes of the regulatory legislation” (citation modified)); NAACP, 425 U.S. at 670 (rejecting the 
argument that the Federal Power Commission’s broad “public interest” mandate authorized it to promulgate 
rules prohibiting its regulated entities from engaging in discriminatory employment practices generally). Similar 
limitations apply to the “protection of investors” language in section 8(a). See generally Davis v. Mich. Dept. of 
Treasury, 489 U.S. 803, 809 (1989) (explaining that “statutory language cannot be construed in a vacuum,” but 
rather “the words of a statute must be read in their context and with a view to their place in the overall statutory 
scheme”). 

18  The timing of when an issuer requests acceleration is often tied to market conditions, and the inability to predict 
with certainty whether the staff would exercise its delegated authority or have the matter considered by the 
Commission poses challenges for issuers. 

19  CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012) (“CompuCredit Corp.”) (quoting Moses H. Cone 
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). 

20 9 U.S.C. 2. 
21  Galloway v. Santander Consumer USA, Inc., 819 F.3d 79, 89 (4th Cir. 2016) (explaining that “application of the 

FAA requires demonstration of … a written agreement that includes an arbitration provision which purports to 
cover the dispute” (citation modified)). Courts have not interpreted the FAA to require “written agreements” to 
be signed. See, e.g., Seawright v. Am. Gen. Fin. Servs., Inc., 507 F.3d 967, 978 & n.5 (6th Cir. 2007) 

 
 



Assuming it is written, whether an agreement to arbitrate is valid and enforceable is generally 

determined based on “the contract law of the state governing the agreement.”22 However, a state 

law that “target[s] the enforceability of [mandatory] arbitration agreements either by name or by 

more subtle methods, such as by ‘interfering with fundamental attributes of arbitration’” may be 

preempted by the Arbitration Act.23 The applicability of the FAA to a particular issuer-investor 

mandatory arbitration provision is a legal matter implicating the intersection of a Federal statute 

that Congress did not authorize the Commission to administer, and the unique laws of the state or 

 
 

(explaining that “arbitration agreements under the FAA need to be written, but not necessarily signed” 
(emphasis in original)); Caley v. Gulfstream Aero. Corp., 428 F.3d 1359, 1369 (11th Cir. 2005) (“Gulfstream 
Aero. Corp.”) (“We readily conclude that no signature is needed to satisfy the FAA’s written agreement 
requirement.”); Tinder v. Pinkerton Sec., 305 F.3d 728, 736 (7th Cir. 2002) (explaining that although “the FAA 
requires arbitration agreements to be written, it does not require them to be signed”); Valero Refining, Inc. v. 
M/T Lauberhorn, 813 F.2d 60, 64 (5th Cir. 1987) (“We note also that section three of the Act does not require 
that a charter party be signed in order to enforce an arbitration agreement contained within it.”); McAllister 
Bros., Inc. v. A&S Transp. Co., 621 F.2d 519, 524 (2d Cir. 1980) (explaining that “a party may be bound by an 
agreement to arbitrate even in the absence of a signature”); Medical Development Corp. v. Indus. Molding 
Corp., 479 F.2d 345, 348 (10th Cir. 1973) (“it [is] not necessary that there be a simple integrated writing or that 
a party sign the writing containing the arbitration clause.”). 

22  Banks v. Mitsubishi Motors Credit of Am., Inc., 435 F.3d 538, 540 (5th Cir. 2005); see, e.g., Memmer v. United 
Wholesale Mortg., LLC, 135 F.4th 398, 404 (6th Cir. 2025) (“Whether the parties entered a valid agreement to 
arbitrate is a question of state contract law.”); Marshall v. Georgetown Mem’l Hosp., 112 F.4th 211, 218 (4th 
Cir. 2024) (“Whether an agreement to arbitrate was formed is a question of ordinary state contract law 
principles.” (quoting Rowland v. Sandy Morris Fin. & Estate Planning Servs., LLC, 993 F.3d 253, 258 (4th Cir. 
2021)) (citation modified)); Rodgers-Rouzier v. Am. Queen Steamboat Operating Co., LLC, 104 F.4th 978, 991 
(7th Cir. 2024) (“An arbitration agreement is just a type of contract, and the FAA does not itself provide a 
substantive law governing the formation or general interpretation of contracts, so ordinary state contract law 
always fills in crucial gaps in any arbitration agreement.”); Meyer v. Uber Techs., Inc., 868 F.3d 66, 74 (2d Cir. 
2017) (“State law principles of contract formation govern the arbitrability question.” (quoting Nicosia v. 
Amazon.com, Inc., 834 F.3d 220, 231 (2d Cir. 2016))); Donaldson Co., Inc. v. Burroughs Diesel, Inc., 581 F.3d 
726, 731 (8th Cir. 2009) (explaining that “state contract law governs the threshold question of whether an 
enforceable arbitration agreement exists between litigants”); Gulfstream Aerospace Corp., 428 F.3d at 1368 
(“[I]n determining whether a binding agreement arose between the parties, courts apply the contract law of the 
particular state that governs the formation of contracts.”). The FAA also contemplates that in some instances 
mandatory arbitration agreements may be governed by the laws of a foreign jurisdiction. See generally 9 U.S.C. 
202 (addressing arbitration agreements that may implicate foreign jurisdictions). 

23  Epic Systems Corp. v. Lewis, 584 U.S. 497, 508 (2018) (“Epic Systems Corp.”) (citation modified); see also 
Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 478 
(1989) (“[T]he FAA pre-empts state laws which require a judicial forum for the resolution of claims which the 
contracting parties agreed to resolve by arbitration.”); see also, e.g., Southland Corp. v. Keating, 465 U.S. 1, 10-
16 (finding preempted a state statute which rendered agreements to arbitrate certain franchise claims 
unenforceable); Perry v. Thomas, 482 U.S. 483, 490 (1987) (finding preempted a state statute which rendered 
unenforceable private agreements to arbitrate certain wage collection claims). While the Supreme Court has 
determined that state laws that target arbitration are preempted, section 2 of the FAA does include a narrow 
“savings clause” that “permits arbitration agreements to be declared unenforceable ‘upon such grounds as exist 
at law or in equity for the revocation of any contract.’” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 
(2011) (“Concepcion”) (quoting section 2 of the FAA). The Supreme Court has held that that this savings clause 
allows “‘generally applicable contract defenses, such as fraud, duress, or unconscionability.’” Id. (quoting 
Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). 



other jurisdiction governing the provision.24 Accordingly, we do not consider it within the 

Commission’s purview to conclude whether any particular issuer-investor mandatory arbitration 

provision is enforceable for purposes of the FAA.   

C.   Effect of Supreme Court Case Law Developments Regarding the FAA on the   
Application of Section 8(a)’s “Public Interest/Investor Protection” Standard  

 
Assuming the FAA applies to a particular issuer-investor mandatory arbitration 

provision, there is a separate question whether the Federal securities statutes override the FAA. 

In the past, the Federal securities statutes were thought to potentially override the FAA because 

issuer-investor mandatory arbitration provisions could be viewed as inconsistent with the Federal 

securities statutes in at least two respects: (1) issuer-investor mandatory arbitration provisions 

could violate the anti-waiver provisions of the Federal securities statutes by foreclosing a judicial 

forum;25 and (2) such provisions could unduly impede the ability of investors to bring private 

actions to vindicate their rights under the Federal securities laws by foreclosing class action 

litigation in courts. 

 After considering the Supreme Court’s jurisprudence relating to the FAA and analyzing 

case-law developments involving the intersection of the FAA and other Federal statutes, we have 

concluded that, in the context of issuer-investor mandatory arbitration provisions, the Federal 

 
 
24  To illustrate some of the potential complexities involved, consider Delaware corporate law. Corporate charters 

and bylaws would appear to constitute written agreements. See, e.g., Centaur Partners, IV v. Nat’l Intergroup, 
Inc., 582 A.2d 923, 928 (Del. 1990) (citing cases) (“Corporate charters and by-laws are contracts among the 
shareholders of a corporation and the general rules of contract interpretation are held to apply.”). Thus, an 
arbitration provision in a Delaware corporate charter or bylaw may constitute a written agreement to arbitrate 
for purposes of the FAA. But see Manesh & Joseph A. Grundfest, The Corporate Contract and Shareholder 
Arbitration, 98 NYU L. REV. 1106 (2023); Ann M. Lipton, Manufactured Consent: The Problem of Arbitration 
Clauses in Corporate Charters and Bylaws, 104 GEO. L.J. 583 (2016). 8 DEL. CODE ANN. Tit. 8, Section 115(c) 
(2025). 

25  15 U.S.C. 77n is the anti-waiver provision in the Securities Act (“section 14”). (“Any condition, stipulation, or 
provision binding any person acquiring any security to waive compliance with any provision of this title or of 
the rules and regulations of the Commission shall be void.”). 15 U.S.C. 78cc(a) is the anti-waiver provision in 
the Exchange Act (“section 29(a)”) (“Any condition, stipulation, or provision binding any person to waive 
compliance with any provision of this title or any rule or regulation thereunder, or any rule of a self-regulatory 
organization, shall be void.”). 15 U.S.C. 77aaaa (section 327 of the Trust Indenture Act of 1939 (“Trust 
Indenture Act”), 15 U.S.C. 77aaa et seq.); 15 U.S.C. 80a-46(a) (section 47(a) of the Investment Company Act 
of 1940 (“Investment Company Act”), 15 U.S.C. 80a-1 et seq.); and 15 U.S.C. 80b-15(a) (section 215(a) of the 
Investment Advisers Act of 1940 (“Investment Advisers Act”), 15 U.S.C. 80b-1 et seq.) contain similar anti-
waiver provisions. 



securities statutes do not override the Arbitration Act’s policy favoring enforcement of 

arbitration agreements. This conclusion follows from the fact that nothing in the text of the anti-

waiver provisions or any other provision of the Federal securities statutes demonstrates a clearly 

expressed congressional intention to except issuer-investor mandatory arbitration provisions 

from the Arbitration Act’s policy favoring arbitration. Because the Federal securities statutes do 

not override the Arbitration Act when it applies to the enforceability of an issuer-investor 

mandatory arbitration provision, the existence of such a provision is not within the ambit of 

appropriate considerations under section 8(a)’s public interest and investor protection standard 

and will not impact determinations whether to accelerate the effective date of a registration 

statement.26 

1.   Nothing in the text of the anti-waiver provisions or any other 
provisions of the Federal securities statutes could be construed as 
a clearly expressed congressional intention that the Arbitration 
Act would not apply to Federal securities laws claims. 

 
 Applying current and relevant Supreme Court precedent, there is no basis to conclude 

that either the anti-waiver provisions or any other provision of the Federal securities statutes 

displaces the primacy of the Arbitration Act in the context of issuer-investor mandatory 

arbitration provisions. 

For many decades, the anti-waiver provision set forth in section 14 was understood to 

prohibit issuer-investor mandatory arbitration provisions relating to Federal securities law 

claims. In a 1953 decision involving the enforceability of an arbitration agreement between a 

brokerage firm and its customers, the Supreme Court held that “the right to select the judicial 

forum is the kind of ‘provision’ that cannot be waived under [section] 14 of the Securities 

Act.”27 In reaching this conclusion, the Court agreed with the firm’s customer (who purchased 

 
 
26 See supra note 17 (citing Business Roundtable). 
27 Wilko v. Swan, 346 U.S. 427, 434-35 (1953) (“Wilko”) (overruled by Rodriguez de Quijas v. 

Shearson/American Express, Inc., 490 U.S. 477 (1989) (“Rodriguez”)). 



the securities at issue in the dispute) that “the purpose of Congress [in enacting the anti-waiver 

provision] was to assure that sellers could not maneuver buyers into a position that might weaken 

their ability to recover under the Securities Act.”28 The Court expressed the view that, “[w]hile a 

buyer and seller of securities, under some circumstances, may deal at arm’s length on equal 

terms, it is clear that the Securities Act was drafted with an eye to the disadvantages under which 

buyers labor. Issuers of and dealers in securities have better opportunities to investigate and 

appraise the prospective earnings and business plans affecting securities than buyers. It is 

therefore reasonable for Congress to put buyers of securities covered by that [Securities] Act on 

a different basis from other purchasers” who are otherwise subject to the terms of the FAA.29  

But in a pair of decisions in the late 1980s, the Supreme Court took a different course.30 

The first of these was a 1987 decision in which the Court considered whether the anti-waiver 

provision in section 29(a) precludes enforcement of an arbitration agreement between a broker-

dealer and its customer. Even though the text of the Exchange Act’s anti-waiver provision is 

substantively identical to the Securities Act’s provision, the Court held that it does not prohibit 

the enforcement of arbitration agreements.31 The Court explained that by its terms the provision 

declares void only an agreement that waives “compliance with any provision of” the Exchange 

Act, which the Court read to prohibit only waiver of the act’s substantive obligations.32 Based on 

that understanding, the Court concluded that the anti-waiver provision does not render 

 
 
28 Id. at 432. 
29 Id. at 435. 
30 See Rodriguez, 490 U.S. at 485-86 and Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 228-38 

(1987) (“McMahon”). 
31  McMahon, 482 U.S. at 228-29. The case involved a fraud claim under section 10(b) of the Exchange Act that a 

customer had brought against a broker-dealer. 15 U.S.C. 78j(b). The arbitration proceeding was administered by 
a self-regulatory organization (“SRO”). See 15 U.S.C. 78c(a)(26) (Exchange Act section 3(a)(26)). The 
Commission filed an amicus curiae brief with the Supreme Court arguing that the anti-waiver provisions of the 
Federal securities statutes did not preclude enforcement of the arbitration agreement between the brokerage firm 
and its customer because of the Commission’s regulatory oversight over SRO arbitration procedures under 
section 19 of the Exchange Act (“section 19”). 15 U.S.C. 78s. The amicus brief urged the Supreme Court to 
adopt the position that a separate analysis would be required in situations where the Commission lacked 
statutory oversight authority. 

32  McMahon, 482 U.S. at 228-29. 



unenforceable agreements that waive section 27 of the Exchange Act,33 which confers Federal 

courts with exclusive subject matter jurisdiction over violations of that Act, because this 

jurisdictional provision does not impose any statutory duties.34 

Two years later, in another dispute involving a brokerage firm and its customer, the Court 

reconsidered whether the anti-waiver provision in section 14 precludes the enforcement of 

mandatory arbitration arrangements. Based on the text of the anti-waiver provision, the Court 

held that section 14 applies only to the substantive provisions of the Securities Act, not to its 

jurisdictional or procedural provisions.35 Further, the Court explained that its prior holding in 

1953 reflected a judicial hostility to arbitration that it has since abandoned:  

Once the outmoded presumption of disfavoring arbitration proceedings is set to 
one side, it becomes clear that the right to select the judicial forum and the wider 
choice of courts are not such essential features of the Securities Act that [section] 
14 is properly construed to bar any waiver of these provisions. Nor are they so 
critical that they cannot be waived under the rationale that the Securities Act was 
intended to place buyers of securities on an equal footing with sellers.36 
 

The Court also explained that “[t]o the extent that [its prior decision] rested on suspicion of 

arbitration as a method of weakening the protections afforded in the substantive law to would-be 

complainants, it has fallen far out of step with our current strong endorsement of the Federal 

statutes favoring this method of resolving disputes.”37 The Court concluded that “resort to the 

arbitration process does not inherently undermine any of the substantive rights afforded to 

petitioners under the Securities Act.”38 

Although these two Supreme Court decisions applying the anti-waiver provisions did not 

involve the precise issue of issuer-investor mandatory arbitration provisions, we discern no 

 
 
33  15 U.S.C. 78aa. 
34 McMahon, 482 U.S. at 228. 
35  Rodriguez, 490 U.S. at 482. 
36  Id. at 481. 
37  Id. 
38  Id. 485-86. 



reason to believe that any different result should follow.39 Accordingly, we believe that the 

inability to proceed in a judicial forum as a result of an issuer-investor mandatory arbitration 

provision would not violate the anti-waiver provisions of the Federal securities statutes. 

 Moreover, in subsequent decisions, the Supreme Court has noted that, in any Federal 

statute enacted after the Arbitration Act, which would include each of the Federal securities 

statutes, there must be a “clearly expressed congressional intention” to override the act.40 As the 

Court has explained, “the intention must be ‘clear and manifest,’”41 and while the Court has not 

gone so far as to require unambiguous statutory language overriding the Arbitration Act, the 

Court has explained that when Congress does not displace the FAA using unambiguous statutory 

language, there is a “strong presumption” that the FAA applies exclusively to any issues 

regarding the enforceability of the arbitration agreement, and the other Federal statute that gives 

 
 
39  In rejecting Wilko’s negative assumptions regarding arbitration, the McMahon and Rodriguez decisions relied 

on the enhanced oversight of the SROs’ arbitration processes (through greater authority over SRO rules) that the 
Commission obtained as a result of certain amendments to section 19 in 1975. See McMahon, 482 U.S. at 233-
34 (“Since the 1975 amendments to [section] 19 of the Exchange Act … the Commission has had expansive 
power to ensure the adequacy of the arbitration procedures employed by the SROs. No proposed rule change 
may take effect unless the SEC finds that the proposed rule is consistent with the requirements of the Exchange 
Act, 15 U.S.C. [section] 78s(b)(2); and the Commission has the power, on its own initiative, to ‘abrogate, add 
to, and delete from’ any SRO rule if it finds such changes necessary or appropriate to further the objectives of 
the Act, 15 U.S.C. [section] 78s(c).”) and id. at 233 (stating that “[e]ven if Wilko’s assumptions regarding 
arbitration were valid at the time Wilko was decided, most certainly they do not hold true today for arbitration 
procedures subject to the SEC’s oversight authority”). See also Rodriguez, 490 U.S. at 483 (referencing the 
Commission’s “authority to oversee and to regulate [SRO-administered] arbitration procedures” in support of 
its rejection of Wilko’s aversion to arbitration as an appropriate forum to entertain claims arising under the 
Securities Act). We recognize that the broker-dealer arbitration arrangements at issue in McMahon and 
Rodriguez were administered by SROs, which would not be the case with issuer-investor mandatory arbitration 
provisions. Nonetheless, we do not understand either McMahon or Rodriguez to require that the Commission 
have supervisory authority over the particular arbitration process employed in order for an issuer-investor 
mandatory arbitration provision to be permissible under the Federal securities statutes. First, both decisions 
were grounded on the separate rationale that Federal policy strongly favors enforcement of arbitration 
agreements and that arbitration itself is a suitable means of resolving the kinds of commercial disputes arising 
under the Federal securities laws. Second, any such understanding would be inconsistent with subsequent 
Supreme Court decisions that, as discussed infra, establish a strong presumption that the Arbitration Act’s 
policy favoring arbitration should control absent a clear and manifest statutory indication otherwise. Lastly, in 
the three decades since McMahon and Rodriguez were decided, no subsequent decision has referred to 
government oversight as a factor to consider in determining whether to enforce an arbitration agreement. 

40  Epic Systems Corp., 584 U.S. at 510 (quoting Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 
528, 533 (1995)). 

41  Id. at 510 (citations and internal quotation marks omitted); see also id. (admonishing that a party arguing that 
another Federal statute displaces the FAA’s mandate bears a “heavy burden”). 



rise to the underlying substantive claims has no relevance to any arbitration issues.42 

 In applying this standard, we can discern nothing in the Federal securities statutes that 

demonstrates a clear and manifest congressional intention to displace the FAA in the context of 

issuer-investor mandatory arbitration agreements. The absence of any clearly expressed 

congressional intent is particularly striking given that in 2010 Congress expressly granted the 

Commission rulemaking authority to limit, condition, or prohibit arbitration agreements between 

broker-dealers and their customers and comparable authority over arbitration agreements 

between, among others, investment advisers and their clients.43  

2.   Under Supreme Court precedent, the FAA is not displaced merely 
because bilateral arbitration may undermine the economic 
incentive of some persons to bring private Federal securities law 
claims.  

  
When considering section 8(a) and Rule 461’s public interest and investor protection 

standard for accelerating the effectiveness of registration statements, a concern has been that 

issuer-investor mandatory arbitration provisions, which are presumed to be bilateral in nature,44 

could unduly impede the ability of investors to bring private actions to enforce the Federal 

 
 
42  Id. at 510-11 (citation modified) (citing United States v. Fausto, 484 U.S. 439, 452, 453 (1988)). See, e.g., id. at 

517 (explaining that the Court has “stressed that the absence of any specific statutory discussion of arbitration” 
must be considered by courts to be “an important and telling clue that Congress has not displaced the 
Arbitration Act”) and CompuCredit Corp., 565 U.S. at 104 (explaining that, in contrast to clear statutory 
provisions that deal expressly with arbitration, it is “unlikely” that “Congress would have sought to achieve the 
same result in the [statute at issue] through a combination of the nonwaiver provision” and certain other 
statutory provisions that never expressly reference arbitration). 

43  See 15 U.S.C. 78o(o) (“section 15(o)”) (“Authority to Restrict Mandatory Pre-dispute Arbitration .—The 
Commission, by rule, may prohibit, or impose conditions or limitations on the use of, agreements that require 
customers or clients of any broker, dealer, or municipal securities dealer to arbitrate any future dispute between 
them arising under the Federal securities laws, the rules and regulations thereunder, or the rules of a self-
regulatory organization if it finds that such prohibition, imposition of conditions, or limitations are in the public 
interest and for the protection of investors.”) and 15 U.S.C. 80b-5(f) (“section 205(f))”) (“Authority to Restrict 
Mandatory Pre-dispute Arbitration.—The Commission, by rule, may prohibit, or impose conditions or 
limitations on the use of, agreements that require customers or clients of any investment adviser to arbitrate any 
future dispute between them arising under the Federal securities laws, the rules and regulations thereunder, or 
the rules of a self-regulatory organization if it finds that such prohibition, imposition of conditions, or 
limitations are in the public interest and for the protection of investors.’’). See also Dodd-Frank Wall Street 
Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, 124 Stat. 1376, section 921 (amending the 
Exchange Act to add section 15(o) and amending the Investment Advisers Act to add section 205(f)). 

44  See, e.g., Lamps Plus, Inc. v. Varela, 587 U.S. 176 (2019). 



securities laws by foreclosing class-wide proceedings.45  

 But in 2013, the Supreme Court rejected a nearly identical argument involving private 

claims under the Federal antitrust statutes. In American Express Co. v. Italian Colors 

Restaurant,46 the Court held that the Arbitration Act requires the enforcement of a mandatory 

arbitration agreement for bilateral arbitration even though the plaintiff’s cost of individually 

arbitrating the antitrust claims would exceed the potential recovery. In the Court’s view, 

enforcement of the arbitration requirement would not “contravene the policies of the antitrust 

laws” because those laws “do not guarantee an affordable procedural path to the vindication of 

every claim.”47 

In support of this conclusion, the Court observed that nothing in the Federal antitrust 

statutes affords a right to bring a class action and, in fact, those statutes were enacted years 

before class actions were even authorized in Federal courts.48 No person seeking to vindicate a 

 
 
45  For completeness, we note that there were two different legal theories (both based on dicta in Supreme Court 

decisions from the 1980s) through which this policy concern could have provided a legal basis for concluding 
that issuer-investor arbitration agreements were prohibited under the Federal securities statutes. The first 
involved a potential application of the anti-waiver provisions that the Supreme Court did not consider in 
McMahon and Rodriguez—i.e., whether undermining or effectively eliminating the economic incentive to 
pursue a Federal securities law violation would violate the anti-waiver provisions by in effect “weakening” 
investors’ ability to vindicate their rights to recover under the securities laws. See McMahon, 482 U.S. at 230-
31 (suggesting in dicta that the anti-waiver provision of the Exchange Act might preclude the enforcement of an 
arbitration requirement if it “weakened” the ability of those protected by the securities laws to “vindicate” their 
ability to recover). The other legal theory concerned the potential invocation of the “effective vindication” 
exception, which is a judge-made exception to the FAA’s policy favoring arbitration agreements. See Mitsubishi 
Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 n. 19 (1985). This exception—which the 
Supreme Court has discussed only in dicta—would “prevent prospective waiver of a party’s right to pursue 
statutory remedies,” id., and could potentially have been used to argue that bilateral arbitration effectively 
denies injured investors a meaningful opportunity to seek a remedy by effectively eliminating their economic 
incentive to do so. As discussed above, however, the Supreme Court has now effectively foreclosed any 
argument that an arbitration agreement should not be enforced if, by precluding class-action relief, it would 
eliminate the economic incentive for many victims to seek relief for their private securities law claims.  

46  570 U.S. 228 (2013) (“Italian Colors”). 
47 Id. at 233. When the decision speaks about an “affordable procedural path,” it appears to mean a procedural 

path that is worth pursuing financially given the potential monetary recovery. See id. at 231 (“In resisting the 
motion, respondents submitted a declaration from an economist who estimated that the cost of an expert 
analysis necessary to prove the antitrust claims would be ‘at least several hundred thousand dollars, and might 
exceed $1 million,’ while the maximum recovery for an individual plaintiff would be $12,850, or $38,549 when 
trebled.”); id. at 236 (“But the fact that it is not worth the expense involved in proving a statutory remedy does 
not constitute the elimination of the right to pursue that remedy.”) (emphasis excluded). 

48 Id. at 234. The Sherman Act, 15 U.S.C. 1-7, was enacted in 1890. The Clayton Act, 15 U.S.C. 12-27, and the 
Federal Trade Commission Act, 15 U.S.C. 41-58, were enacted in 1914. 



claim under the Federal antitrust statutes in a bilateral arbitration proceeding that forecloses 

class-action or collective proceedings would, in the Court’s view, be any worse off than a person 

proceeding under those statutes when they were enacted because at that time there was no 

allowance for class or collective procedures.49 Based on that historical perspective, the Court 

ultimately found no difficulty with enforcing the agreement for bilateral arbitration and 

concluded that the FAA controls.50 As the Court explained, because nothing in the Federal 

antitrust statutes affords a right to vindicate one’s private claims through class or collective 

actions, the “contrary congressional command” required by the Court’s decisions to displace the 

Arbitration Act’s policy favoring arbitration was lacking.51 

Similar to the Court’s findings with the Federal antitrust statutes, no provision in the 

Federal securities statutes “guarantee[s] an affordable procedural path to the vindication of every 

claim.”52 Further, like the Federal antitrust statutes, the Federal securities statutes do not 

expressly include a right to proceed through class actions or collective actions. Finally, because 

the Securities Act and the Exchange Act (like the antitrust statutes at issue in Italian Colors) 

were enacted before class-action proceedings were permitted, it stands to reason that “the 

individual suit” based on claims under those acts that was considered adequate and consistent at 

the time those statutes were enacted remains so notwithstanding the advent of class-action 

litigation.53 Accordingly, the potential for an issuer-investor mandatory arbitration provision to 

 
 
49 Italian Colors 570 U.S. 228, at 236. (“The class-action waiver merely limits arbitration to the two contracting 

parties. It no more eliminates those parties’ right to pursue their statutory remedy than did federal law before its 
adoption of the class action for legal relief in 1938.”) (internal citations omitted). See also id. at 236-37 
(explaining that “the individual suit that was considered adequate to assure ‘effective vindication’ of a federal 
right before adoption of class-action procedures did not suddenly become ‘ineffective vindication’ upon their 
adoption”). 

50  Id. at 234 (explaining that because the parties agreed to bilateral arbitration, “it would be remarkable for a court 
to erase that expectation”). 

51  Id. at 232-33. 
52  Id. at 233. 
53  See id. at 236-37. This argument does not apply to claims under the Trust Indenture Act, Investment Company 

Act, or the Investment Advisers Act because those statutes were enacted after the Federal rules of civil 
 
 



diminish, or even eliminate, the economic incentive for some investors to bring private claims 

under the Federal securities laws is not a sufficient basis to conclude that the Federal securities 

statutes displace the Arbitration Act’s mandate.54 

III. Conclusion 

For the reasons discussed above, the Commission has determined that the presence of an 

issuer-investor mandatory arbitration provision will not impact decisions regarding whether to 

accelerate the effectiveness of a registration statement. While the discussion above focuses on 

the Court’s application of the FAA, we acknowledge there may be instances in which the FAA 

does not apply, such as where there is no valid and enforceable written agreement for purposes 

of the FAA. Given that neither the Commission nor the staff is well-positioned to conclusively 

determine when the FAA applies,55 and in light of the case-law developments discussed above, 

we believe that any relevant issues concerning an issuer-investor mandatory arbitration provision 

are best addressed through complete and adequate disclosure of material information in the 

registration statement. Accordingly, when considering acceleration requests pursuant to section 

8(a) and Rule 461, the staff will focus on the adequacy of the registration statement’s 

disclosures, including disclosure regarding issuer-investor mandatory arbitration provisions. 

Nothing in this statement should be understood to express any views on the specific terms of an 

arbitration provision, or whether arbitration provisions are appropriate or optimal for issuers or 

 
 

procedure were amended to permit class-wide relief. Nonetheless, we believe that the FAA’s mandate controls 
even if injured persons lack an economic incentive to pursue bilateral arbitration for claims under these statutes. 
Because these statutes do not afford an entitlement to class-wide relief and Congress did not provide such a 
right when it authorized class-wide procedures in Federal litigation, they lack a clear expression of a 
congressional intention to displace the FAA. See id. at 234 (explaining that “congressional approval of Rule 23 
[of the Federal Rules of Civil Procedure]” does not “establish an entitlement to class proceedings for the 
vindication of statutory rights”). 

54  The Supreme Court has instructed that the FAA’s policy favoring arbitration agreements is not impacted even 
when the one party with superior bargaining power may have imposed the arbitration requirement. See 
Concepcion, 563 U.S. at 340-41. 

55  See supra notes 19-24 and accompanying text. 



investors. 

IV. Other Matters 

Pursuant to the Congressional Review Act,56 the Office of Information and Regulatory 

Affairs has designated this policy statement as not a “major rule,” as defined by 5 U.S.C. 804(2). 

This statement is a significant regulatory action under Executive Order 12866, as amended, and 

has been reviewed by the Office of Management and Budget. 

This statement does not impose any new rules, regulations, or other requirements on 

issuers, but could influence issuer behavior to the extent that an issuer did not previously have an 

issuer-investor mandatory arbitration provision. This is in part due to concerns about potential 

impacts on acceleration requests. After publication of this statement, it is possible that some 

issuers may adopt issuer-investor mandatory arbitration provisions, which could potentially deter 

or prevent some investors from filing civil actions arising under the Federal securities laws. For 

both issuers and investors, adoption of such provisions would likely impact the cost of resolving 

future investor claims for damages and the extent of any monetary or other relief that might be 

awarded in connection with such claims. However, it is difficult to estimate how many issuers 

are likely to adopt issuer-investor mandatory arbitration provisions, or the ultimate economic 

impact of any such provisions, if adopted.  

Some issuers may choose not to include such provisions due to potential state law 

considerations or concern about potential negative reactions from shareholders and other 

investors. Actions or potential actions by others, including proxy voting advice businesses, stock 

exchanges, and institutional investors, can be expected to influence the number of issuers who 

adopt arbitration of issuer-investor claims arising under the Federal securities laws. Further, 

some issuers may already have issuer-investor mandatory arbitration provisions, irrespective of 

this statement. A number of other issuers may have no plans to register an offering or class of 

 
 
56  5 U.S.C. 801 et seq. 



securities, and thus would not be affected by this statement. 

Statutory Authority 

The statement contained in this release is being adopted pursuant to the authority set forth 

in section 19 of the Securities Act and section 23 of the Exchange Act. 

List of Subjects in 17 CFR Parts 231 and 241 

Securities. 

Text of Amendments 

 For the reasons set forth in the preamble, the Commission is amending title 17, chapter II 

of the Code of Federal Regulations as follows: 

PART 231 — INTERPRETATIVE RELEASES RELATING TO THE SECURITIES ACT 

OF 1933 AND GENERAL RULES AND REGULATIONS THEREUNDER 

1. The authority for part 231 continues to read as follows: 

 Authority: 15 U.S.C. 77a et seq.  

2. Amend § 231 by adding an entry at the end of the table to read as follows: 

 
Subject Release No. Date 

Fed. 
Reg. 
Vol. and  
page 

*******    
Acceleration of Effectiveness of 
Registration Statements of Issuers 
with Certain Mandatory 
Arbitration Provisions 

33-11389 Sept. 17, 2025 
[INSERT FEDERAL 
REGISTER DOCUMENT 
CITATION]. 

 

PART 241 — INTERPRETATIVE RELEASES RELATING TO THE SECURITIES 

EXCHANGE ACT OF 1934 AND GENERAL RULES AND REGULATIONS 

THEREUNDER 



3. The authority for part 241 continues to read as follows: 

 Authority: 15 U.S.C. 78a et seq.  

4. Amend § 241 by adding an entry at the end of the table to read as follows: 

 
Subject Release No. Date 

Fed. 
Reg. 
Vol. and  
page 

*******    
Acceleration of Effectiveness of 
Registration Statements of Issuers 
with Certain Mandatory 
Arbitration Provisions 

34-103988 Sept. 17, 2025 
[INSERT FEDERAL 
REGISTER DOCUMENT 
CITATION]. 

 
 
 
By the Commission.  

Dated: September 17, 2025. 

 

 

Vanessa A. Countryman, 

Secretary.