Investor Choice Act of 2026

This bill seeks to enhance investor protection by prohibiting mandatory pre-dispute arbitration agreements across the securities market. Congress finds that investor confidence relies on fair recourse, and mandatory arbitration clauses leverage the powerful advantages held by issuers, brokers, dealers, and investment advisers, severely restricting defrauded investors' ability to seek redress. The legislation aims to ensure investors are free to choose arbitration if they deem it best, or pursue remedies in court. Specifically, the bill amends the Securities Exchange Act of 1934 to prohibit exchanges from listing securities if the issuer mandates arbitration for disputes with shareholders in their bylaws or contracts. It also makes it unlawful for brokers, dealers, funding portals, or municipal securities dealers to enter into agreements that mandate arbitration, restrict forum selection, or limit a customer's ability to pursue claims individually, representatively, or on a class action basis. Similar prohibitions are extended to investment advisers through amendments to the Investment Advisers Act of 1940 , making it unlawful for them to impose such restrictions on their clients. Furthermore, the Securities Act of 1933 is amended to prevent securities from being registered if the issuer mandates arbitration for shareholder disputes. For agreements entered into before the bill's enactment, any prohibited provision is rendered void, unless arbitration was already initiated by any party on or before the enactment date. Generally, the amendments apply to any agreement entered into, modified, or extended after the date of enactment, reinforcing investor choice in dispute resolution.