The U.S. Securities & Exchange Commission published two final actions aimed at reducing uncertainty in the offering process. It clarified that the presence of a provision requiring arbitration of investor claims under the federal securities laws will not factor into the SEC’s decision on whether to accelerate the effectiveness of a registration statement, and it adopted amendments to its Rules of Practice addressing when an effective registration statement may be stayed. The arbitration position is framed as an acknowledgment of existing Supreme Court precedent and is intended to leave the decision on whether to include such provisions to issuers and investors through market pricing. Separately, the Rules of Practice changes are designed to avoid disruptions that could follow a stay after a registration statement becomes effective, while retaining a tailored, case-by-case mechanism for considering whether a stay is justified.
U.S. Securities & Exchange Commission 2025-09-17
U.S. Securities & Exchange Commission will not weigh mandatory arbitration clauses in registration acceleration decisions and adopts case-by-case approach to post-effectiveness stays
The U.S. Securities & Exchange Commission issued two final actions to reduce uncertainty in the offering process. It clarified that arbitration provisions in investor claims will not affect the acceleration of registration statements and amended its Rules of Practice to manage stays on effective registration statements. These changes aim to align with Supreme Court precedent and maintain flexibility in handling stays.