Investor Choice Act of 2026
Sponsored By: Senator Merkley, Jeff [D-OR]
Introduced
Summary
Ban on mandatory pre-dispute arbitration in securities and advisory contracts. This bill would bar clauses that force future disputes into arbitration across issuers, shareholders, brokers, dealers, funding portals, municipal securities dealers, and investment advisers. It would void such arbitration clauses in existing contracts while allowing arbitrations already started to continue.
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- Issuers and shareholders: Would block listing or registration of a security if the issuer's bylaws or governing documents require arbitration for shareholder disputes by amending the Securities Exchange Act of 1934 and the Securities Act of 1933.
- Brokers, dealers, funding portals, and municipal securities dealers: Would make it unlawful to enter into, modify, or extend customer or client agreements that mandate arbitration, limit forum choice, or restrict class or consolidated actions. Pre-enactment provisions of that type would be void except for arbitrations already initiated.
- Investment advisers and clients: Would prohibit advisers from using or changing client contracts to force arbitration or limit a client's ability to pursue individual, representative, or class claims. Pre-enactment offending clauses would be void while ongoing arbitrations remain valid.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
No forced arbitration for investors
If enacted, the bill would make it illegal for investment advisers, brokers, dealers, funding portals, and municipal securities dealers to enter into, modify, or extend contracts that, for any future dispute, (1) require arbitration, (2) limit a client’s or customer’s ability to pick a forum, or (3) bar individual, representative, or class claims. The rule would apply to agreements entered into, changed, or extended after the bill becomes law, and it would apply regardless of other law, including Title 9 of the U.S. Code. The bill would also void prohibited arbitration clauses in covered contracts made before enactment, except that any arbitration already started on or before enactment could continue.
No arbitration in issuer bylaws
If enacted, the bill would bar a national securities exchange from listing, and the SEC from registering, any security if the issuer’s bylaws, governing documents, or any contract with a shareholder require arbitration for disputes between the issuer and its shareholders. The rule would apply even if such a clause might otherwise be allowed under Title 9 of the U.S. Code. This provision would take effect when the bill becomes law.
Sponsors & CoSponsors
Sponsor
Merkley, Jeff [D-OR]
OR • D
Cosponsors
Sen. Warren, Elizabeth [D-MA]
MA • D
Sponsored 6/24/2026
Sen. Blumenthal, Richard [D-CT]
CT • D
Sponsored 6/24/2026
Sen. Whitehouse, Sheldon [D-RI]
RI • D
Sponsored 6/24/2026
Sen. Durbin, Richard J. [D-IL]
IL • D
Sponsored 6/24/2026
Sen. Reed, Jack [D-RI]
RI • D
Sponsored 6/24/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov