The U.S. Securities and Exchange Commission issued a policy statement on accelerating the effectiveness of registration statements that directs staff to make required public-interest findings without considering whether an issuer has adopted mandatory shareholder arbitration provisions, and adopted amendments to the Commission’s Rules of Practice affecting challenges to those staff determinations. Commissioner Caroline A. Crenshaw released a statement opposing both actions. Crenshaw argued that the policy shift effectively opens the door for public companies to require shareholders to pursue securities claims in private arbitration rather than in court and without class actions, and that this could reduce transparency, deterrence, and investor recoveries while increasing reliance on Commission enforcement. She also criticised the Rules of Practice changes for creating a new exception to the automatic stay that typically applies when Commission review of delegated staff action is requested, warning that offerings could proceed before any review can occur and that the measures were adopted without soliciting public comment.
U.S. Securities & Exchange Commission 2025-09-17
U.S. Securities and Exchange Commission issues policy statement on registration acceleration for issuers with mandatory arbitration clauses and amends Rules of Practice
The U.S. SEC issued a policy to expedite registration statement effectiveness, instructing staff to disregard mandatory shareholder arbitration provisions. Commissioner Caroline A. Crenshaw opposed this, arguing it could limit transparency and investor recoveries by pushing claims to private arbitration. She also criticized amendments to the SEC’s Rules of Practice for potentially allowing offerings to proceed before Commission review, noting the lack of public consultation.