SEC Issues Policy Statement on Mandatory Arbitration Provisions

The Securities and Exchange Commission today published a policy statement announcing that decisions about whether to accelerate the effectiveness of a registration statement will not be affected by the presence of a provision requiring arbitration.

Mandatory Arbitration Provisions Clarified

• SEC clarifies that mandatory arbitration provisions in contracts or agreements with investors will not impact acceleration of registration statements.
• The policy statement aims to provide clarity and certainty for companies planning initial public offerings (IPOs) and capital raisings in the US market.

Risk Assessment

Our risk assessment system indicates a high level of risk associated with this development, while its credibility is high. A warning for readers notes that this may impact companies planning to go public or raise capital in the US, but individual investor implications are currently unclear.

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Staying Ready

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