S. 4937: Investor Choice Act of 2026

This bill would prohibit certain financial firms from forcing investors and clients into pre-dispute arbitration for future disputes.

What would change

• Brokers, dealers, funding portals, and municipal securities dealers would be barred from making customers sign agreements that require future disputes to be handled in arbitration.
• These firms also could not use agreements that:
  • limit a customer’s choice of where to bring a dispute, or
  • block a customer from filing a case individually, as part of a group, or as a class action.
• Investment advisers would face the same restrictions.
• Publicly traded companies issuing securities would not be able to have their securities listed or registered if their bylaws, governing documents, or shareholder contracts require arbitration between the company and its shareholders.

Effect on existing agreements

• For contracts signed before the bill becomes law, any prohibited arbitration provision would become void.
• However, if an arbitration case was already started before the law takes effect, that ongoing arbitration would generally not be undone.
• The new rules would apply to agreements entered into, changed, or extended after enactment, unless the bill says otherwise.

In practical terms

The bill would give investors and customers more freedom to choose whether to resolve disputes in arbitration or in court. It would also preserve the ability to pursue individual or group claims in court when permitted by law, instead of being required to use arbitration first.

Relevant Companies

• BLK — BlackRock could be affected as a major investment adviser if its client agreements contain arbitration requirements that would need to be changed.
• GS — Goldman Sachs could be affected through its brokerage and securities businesses if customer agreements rely on mandatory arbitration.
• MS — Morgan Stanley could be affected through its brokerage and wealth management operations if arbitration clauses must be removed or revised.
• JPM — JPMorgan Chase could be affected through its brokerage and investment advisory services if customer dispute provisions need to change.
• BAC — Bank of America could be affected through its brokerage and wealth management businesses if mandatory arbitration clauses are restricted.
• SCHW — Charles Schwab could be affected as a brokerage and investment services firm that may need to revise customer dispute agreements.
• NDAQ — Nasdaq could be affected because the bill would require exchanges to prohibit listing securities from issuers with mandatory shareholder arbitration provisions.
• ICE — Intercontinental Exchange could be affected in its exchange-related role if listing standards must be updated to comply with the bill.