I 
116TH CONGRESS 
1ST SESSION H. R. 5336 
To amend the Securities Exchange Act of 1934 to prohibit mandatory 
predispute arbitration agreements, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 6, 2019 
Mr. FOSTER (for himself, Mrs. CAROLYN B. MALONEY of New York, Mr. 
MEEKS, Mr. CASTEN of Illinois, Mr. LYNCH, Ms. SCHAKOWSKY, Mr. 
MCGOVERN, Mr. CLAY, Ms. DEAN, and Mr. HECK) introduced the fol-
lowing bill; which was referred to the Committee on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to prohibit 
mandatory predispute arbitration agreements, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Investor Choice Act 
of 2019’’. 
SEC. 2. FINDINGS. 
Congress makes the following findings: 
(1) Investor confidence in fair and equitable re-
course is essential to the health and stability of the 
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securities markets and to the participation of retail 
investors in such markets. 
(2) Brokers, dealers, and investment advisers 
hold powerful advantages over investors, and manda-
tory arbitration clauses, including contracts that 
force investors to submit claims to arbitration or to 
waive their right to participate in a class action, le-
verage these advantages to severely restrict the abil-
ity of defrauded investors to seek redress. 
(3) Investors should be free to choose arbitra-
tion to resolve disputes if they judge that arbitration 
truly offers them the best opportunity to efficiently 
and fairly settle disputes, and investors should also 
be free to pursue remedies in court should they view 
that option as superior to arbitration. 
SEC. 3. ARBITRATION AGREEMENTS IN THE SECURITIES 
EXCHANGE ACT OF 1934. 
(a) IN GENERAL.—The Securities Exchange Act of 
1934 is amended— 
(1) by amending section 15(o) (15 U.S.C. 
78o(o)) to read as follows: 
‘‘(o) 
LIMITATIONS
ON
PRE-DISPUTE
AGREE-
MENTS.—Notwithstanding any other provision of law, it 
shall be unlawful for any broker, dealer, funding portal, 
or municipal securities dealer to enter into, modify, or ex-
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tend an agreement with customers or clients of such entity 
with respect to a future dispute between the parties that— 
‘‘(1) mandates arbitration for such dispute; 
‘‘(2) restricts, limits, or conditions the ability of 
a customer or client of such entity to select or des-
ignate a forum for resolution of such dispute; or 
‘‘(3) restricts, limits, or conditions the ability of 
a customer or client to pursue a claim relating to 
such dispute in an individual or representative ca-
pacity or on a class action or consolidated basis.’’; 
and 
(2) in section 6(b) (15 U.S.C. 78f(b)), by add-
ing at the end the following: 
‘‘(11) MANDATORY ARBITRATION.—The rules of 
the exchange prohibit the listing of any security if 
such issuer, in its bylaws, other governing docu-
ments, or any contract with a shareholder related to 
the parties as issuer and shareholder mandates arbi-
tration for any disputes between the issuer and the 
shareholders of the issuer.’’. 
(b) APPLICATION TO EXISTING AGREEMENTS.— 
(1) IN GENERAL.—With respect to an agree-
ment described in section 15(o) of the Securities Ex-
change Act of 1934 that was entered before the date 
of the enactment of this Act, any provision prohib-
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ited by section 15(o) of the Securities Exchange Act 
of 1934 is void. 
(2) ONGOING ARBITRATION.—A provision pro-
hibited by section 15(o) of the Securities Exchange 
Act of 1934 shall not be void under paragraph (1) 
if arbitration required by such provision was initi-
ated by any party on or before the date of the enact-
ment of this subsection. 
SEC. 4. ARBITRATION AGREEMENTS IN THE SECURITIES 
ACT OF 1933. 
Section 6 of the Securities Act of 1933 (15 U.S.C. 
77f) is amended by adding at the end the following: 
‘‘(f) 
LIMITATION
ON
ARBITRATION
REQUIRE-
MENTS.—A security may not be registered with the Com-
mission if the issuer of such security, in its bylaws, or 
other governing documents, or any contract with a share-
holder related to the parties as issuer and shareholder 
mandates arbitration for any disputes between the issuer 
and the shareholders of the issuer.’’. 
SEC. 5. ARBITRATION AGREEMENTS IN THE INVESTMENT 
ADVISERS ACT OF 1940. 
(a) IN GENERAL.—Section 205(f) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b–5(f)) is amended 
to read as follows: 
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‘‘(f) Notwithstanding any other provision of law, it 
shall be unlawful for any investment adviser to enter into, 
modify, or extend an agreement with customers or clients 
of such entity with respect to a future dispute between 
the parties to such agreement that— 
‘‘(1) mandates arbitration for such dispute; 
‘‘(2) restricts, limits, or conditions the ability of 
a customer or client of such entity to select or des-
ignate a forum for resolution of such dispute; or 
‘‘(3) restricts, limits, or conditions the ability of 
a customer or client to pursue a claim relating to 
such dispute in an individual or representative ca-
pacity or on a class action or consolidated basis.’’. 
(b) APPLICATION TO EXISTING AGREEMENTS.— 
(1) IN GENERAL.—With respect to an agree-
ment described in section 205(f) of the Investment 
Advisers Act of 1940 that was entered before the 
date of the enactment of this Act, any provision pro-
hibited by section 205(f) of the Investment Advisers 
Act of 1940 is void. 
(2) ONGOING ARBITRATION.—A provision pro-
hibited by section 205(f) of the Investment Advisers 
Act of 1940 shall not be void under paragraph (1) 
if arbitration required by such provision was initi-
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ated by any party on or before the date of the enact-
ment of this subsection. 
SEC. 6. APPLICATION. 
Except as otherwise stated, the amendments made by 
this Act shall apply with respect to any agreement entered 
into, modified, or extended after the date of the enactment 
of this Act. 
Æ 
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