On the broker documentation there is this arbitration agreement, it also says a customer does not have to sign this. What is your advice guys, I have no knowledge of these matters. TIA Arbitration Agreement Customer voluntarily agrees to submit any dispute with FuturesRUs to binding arbitration. If a dispute arises, Customer will be given a choice of three qualified arbitration forums when Customer notifies FuturesRUs that he intends to submit a dispute to arbitration or when FuturesRUs notifies customer that it intends to submit a dispute to arbitration. Customer must notify FuturesRUs by registered mail of his choice of arbitration forum within forty-five days after receiving the list of three arbitration forums. If Customer fails to notify FuturesRUs of his choice within that time, then FuturesRUs may choose the arbitration forum that will resolve the dispute. FuturesRUs agrees to pay any incremental fees that may be assessed by the forum chosen by Customer for the provision of a "mixed panel" of arbitrators, unless the arbitrators determine that Customer has acted in bad faith in initiating or conducting the proceedings. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. THREE FORUMS EXIST FOR THE RESOLUTION OF COMMODITY DISPUTES: CIVIL COURT LITIGATION, REPARATIONS AT THE COMMODITY FUTURES TRADING COMMISSION (âCFTCâ) AND ARBITRATION CONDUCTED BY A SELFREGULATORY OR OTHER PRIVATE ORGANIZATION. THE CFTC RECOGNIZES THAT THE OPPORTUNITY TO SETTLE DISPUTES BY ARBITRATION MAY IN SOME CASES PROVIDE MANY BENEFITS TO CUSTOMERS, INCLUDING THE ABILITY TO OBTAIN AN EXPEDITIOUS AND FINAL RESOLUTION OF DISPUTES WITHOUT INCURRING SUBSTANTIAL COSTS. THE CFTC REQUIRES, HOWEVER, THAT EACH CUSTOMER INDIVIDUALLY EXAMINE THE RELATIVE MERITS OF ARBITRATION AND THAT YOUR CONSENT TO THIS ARBITRATION AGREEMENT BE VOLUNTARY. BY SIGNING THIS AGREEMENT, CUSTOMER: (1) MAY BE WAIVING HIS RIGHT TO SUE IN A COURT OF LAW; AND (2) IS AGREEING TO BE BOUND BY ARBITRATION OF ANY CLAIMS OR COUNTERCLAIMS WHICH CUSTOMER OR FUTURESRUS MAY SUBMIT TO ARBITRATION UNDER THIS AGREEMENT. CUSTOMER IS NOT, HOWEVER, WAIVING HIS RIGHT TO ELECT INSTEAD TO PETITION THE CFTC TO INSTITUTE REPARATIONS PROCEEDINGS UNDER SECTION 14 OF THE COMMODITY EXCHANGE ACT WITH RESPECT TO ANY DISPUTE WHICH MAY BE ARBITRATED PURSUANT TO THIS AGREEMENT. IN THE EVENT A DISPUTE ARISES, CUSTOMER WILL BE NOTIFIED IF FUTURESRUS INTENDS TO SUBMIT THE DISPUTE TO ARBITRATION. IF CUSTOMER BELIEVES A VIOLATION OF THE COMMODITY EXCHANGE ACT IS INVOLVED AND IF CUSTOMER PREFERS TO REQUEST A SECTION 14 "REPARATIONS" PROCEEDING BEFORE THE CFTC, CUSTOMER WILL HAVE 45 DAYS FROM THE DATE OF SUCH NOTICE IN WHICH TO MAKE THAT ELECTION. A-2 CUSTOMER NEED NOT SIGN THIS ARBITRATION AGREEMENT TO OPEN AN ACCOUNT WITH FUTURESRUS. SEE 17 C.F.R. 166.5.
The "customer need not sign this arbitration agreement to open an account . . ." sounds like some wording their lawyer told them to put in. I would be surprised if they would accept your application without the arbitration agreement, although I'm not familiar with this broker. In practice, if you have a dispute that isn't satisfactorily resolved by the broker, you'll end up either agreeing at that time to arbitration or having to initiate legal action. Unless you have large $ at stake, arbitration is likely the only reasonable alternative you'll have and that's not free either. Just my two cents, but I'd say accept arbitration with this (or another) broker that you have confidence in.
You don't have to accept arbitration in the event of a dispute, hence this phrase on (just about?) every traiding account that you will submit to a US based broker. That being said, the brokerage is under no obligation to accept you as a client if you don't accept arbitration in the event of a dispute. Hence the why they call it an "Application".
Pretty standard. I'd say watch your broker and your trade statements like a hawk so you can catch any mistakes early, and so hopefully never have a reason to go to arbitration.