U.S. Securities and Exchange Commission clarifies acceleration policy for issuers with mandatory arbitration provisions and amends Rules of Practice to remove automatic stays

The U.S. Securities and Exchange Commission issued a policy statement on how it will consider requests to accelerate the effectiveness of Securities Act registration statements where an issuer has certain corporate charter or bylaw provisions requiring investor claims to be adjudicated in arbitration, alongside conforming amendments to the Commission’s Rules of Practice. The statement frames the acceleration determination primarily as a disclosure-focused assessment, rather than an evaluation of whether mandatory arbitration is appropriate or beneficial. For decades, Commission staff had generally taken the position that acceleration would not be granted for issuers with mandatory arbitration provisions. The policy statement provides Commission-level instruction and expressly avoids addressing the relationship between the Federal Arbitration Act and the federal securities laws, emphasizing instead that the central consideration in declaring a registration statement effective is the adequacy of disclosure. In parallel, the Rules of Practice amendments revise procedures for Commission review of staff actions under delegated authority relating to effective dates of registration statements and post-effective amendments, and to qualification timing for Regulation A offering statements and related amendments, removing the automatic stay that would otherwise apply during review in a way the Commission viewed as disruptive and unpredictable once sales have commenced. The Commission also highlighted that the stop order process under Section 8(d) of the Securities Act remains available as a key safeguard.