SEC Releases Policy Statement Related to Mandatory Arbitration Provisions and Makes Corresponding Amendments to Rules of Practice

The SEC has released a policy statement to clarify 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.” Therefore, in deciding whether a registration statement’s effectiveness should be accelerated, the SEC staff “will focus on the adequacy of the registration statement’s disclosures, including disclosure regarding the arbitration provision.”

In addition, the SEC has released a related final rule that amends its rules of practice associated with “procedures governing Commission review of staff actions made pursuant to delegated authority in connection with the determination of the effective dates of registration statements and post-effective amendments and the determination of the dates and times of qualification of an offering statement and post-qualification amendments under Regulation A.” According to SEC Commissioner Mark Uyeda, the amendments “reflect the fact that an automatic stay of the staff’s determination to accelerate effectiveness or to qualify an offering statement after sales have commenced would be highly disruptive to the distribution process.”

For more information, see the press release — as well as the statements by SEC Chairman Paul Atkins and SEC Commissioners Hester Peirce, Caroline Crenshaw, and Mark Uyeda — on the SEC’s Web site.