CRS Examines Legislation to Repeal Mandatory Securities Arbitration

The Congressional Research Service ("CRS") summarized two companion bills (one in the House and one in the Senate) that would prohibit financial intermediaries and issuers from mandating the use of arbitration to resolve disputes.

The Investors Choice Act of 2021 would (i) prohibit an exchange from listing an issuer if the governing documents of the issuer limited a shareholder's right to take claims to court. It would also prohibit a broker-dealer or investment adviser from entering into an agreement with a customer, limiting the customer's right to arbitrate (though customers would maintain the right, under SRO rules, to force arbitration).