The House of Representatives has passed a bill that would reduce obstacles to research on exchange traded funds and registered investment companies.
“As the ETF market continues to grow, this bill's common sense clarifications will allow broker/dealers to produce more research on ETFs, providing consumers with greater access to information and fueling capital formation and job creation,” said Kenneth Bentsen Jr., president and CEO of SIFMA, in a statement.
The Fair Access to Investment Research Act, introduced by Rep. French Hill (R, Ark.) and Rep. Bill Foster (D, Ill.), directs the Securities and Exchange Commission to provide a safe harbor for certain covered ETF research reports. Under the legislation, ETF research wouldn’t be considered an offer to buy or sell a security. The bill passed by a vote of 405-2.
The ETF space has grown to over 1,500 funds and $2.1 trillion in assets, yet most b/ds don’t publish research on these funds due to securities laws.
“ETFs have seen explosive growth over the past three decades, but there is a lack of available research that could greatly benefit consumers due to the current securities laws,” Hill said in a statement. “This bill provides a simple and common sense fix to those laws by removing this unnecessary burden that prevents investor access to information.”
Sens. Dean Heller (R, Nev.) and Gary Peters (D, Mich.) introduced the Senate version of the bill, which was approved by the Senate Committee on Banking, Housing, and Urban Affairs in March. The bill will now go to the Senate for approval.