[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2998 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 2998

To amend the Securities Exchange Act of 1934 to prohibit mandatory pre-
        dispute arbitration agreements, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 2, 2013

 Mr. Ellison introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To amend the Securities Exchange Act of 1934 to prohibit mandatory pre-
        dispute arbitration agreements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Investor Choice Act of 2013''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Investor confidence in fair and equitable recourse is 
        essential to the health and stability of the securities markets 
        and to the participation of retail investors in such markets.
            (2) Brokers, dealers, and investment advisers hold powerful 
        advantages over investors, and mandatory arbitration clauses, 
        including contracts that force investors to submit claims to 
        arbitration or to waive their right to participate in class 
        actions, leverage these advantages to severely restrict the 
        ability of defrauded investors to seek redress.
            (3) Investors should be free to choose arbitration 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.

    Section 15(o) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o(o)) is amended to read as follows:
    ``(o) Limitations on Pre-Dispute Agreements.--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 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 designate 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 capacity or on a class 
        action or consolidated basis.''.

SEC. 4. ARBITRATION AGREEMENTS IN THE INVESTMENT ADVISERS ACT OF 1940.

    Section 205(f) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-5(f)) is amended to read as follows:
    ``(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 designate 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 capacity or on a class 
        action or consolidated basis.''.

SEC. 5. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
the date of the enactment of this Act and shall apply to any agreement 
created, modified, or extended after the date of enactment of this Act.
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