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SIFMA released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO on legislation introduced today that would ban arbitration clauses in all consumer contracts, including the retail contracts of investors who utilize the services of broker-dealers:
“SIFMA consistently advocates to enhance the quality, and substantive and procedural fairness, of securities arbitration as the exclusive dispute resolution forum for most disputes between securities firms and their customers. The securities arbitration system has worked effectively for decades because it is subject to public oversight, regulatory oversight by multiple independent regulators, and rules of procedure that are designed to benefit investors. Pre-dispute arbitration agreements are a vital component of this system. Such agreements help shape the public policy in favor of arbitration that has been recognized by both Congress and the U.S. Supreme Court. This policy is strengthened by the recognition that securities arbitration promotes fair, efficient, and economical dispute resolution for all parties. SIFMA believes we should preserve the current enforceability of arbitration clauses in customer contracts and therefore strongly opposes any effort to ban them.”
