I have the same problem on my 07. The only solution I came up with was adding an additional retention spring to it and actually pushing in on the pull handle while depressing the e-brake pedal (my 14 year old figured this one out). I'm starting to wonder if Arctic Cat has an engineering department.
I'm not real familiar with the 700 e-brake design...but I can tell you the e-brake on the XTZ 1000's works really well (sometimes even when you don't want it to). Be cautious...some e-brakes have been known to cause fires.
Hope your e-brake is not like mine. '09 700, e-brake will not work/hold at all. I guess trailering it with the brake set wore the 'teeth' out that keep the e-brake locked down. It's been about a month since I took it to my dealer and still no idea when my back-ordered brake assembly will be in. Hope you don't rely on yours as much as I do mine if it is wearing out.