Legislation introduced by U.S. Rep. French Hill (R-AR) to address provisions of securities laws that prevent broker-dealers from publishing research on exchange-traded funds (ETFs) cleared the House on Monday with bipartisan support.
The Fair Access to Investment Research Act, H.R. 910, would require the Securities and Exchange Commission (SEC) to establish a safe harbor for research reports covering ETFs. The House approved the measure, which Hill introduced with U.S. Rep. Bill Foster (D-IL), on a vote of 405-2.
ETFs, which are marketable securities that track to an index, a commodity, bonds or a group of assets and are traded like common stock, have become widely used. Approximately 100 funds held $100 billion in assets three decades ago, compared to more than 1,500 funds holding $2.1 trillion in assets today.
“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. “This bill provides a simple and common sense fix to those laws by removing this unnecessary burden that prevents investor access to information. I appreciate the leadership and support of Congressman Foster, and I look forward to our continued partnership in working with the Senate to get this important bill signed into law.”
The economy is better off, Foster said, when investors have access to information they need to make sound financial decisions.
“I am proud to work with Congressman Hill on this bipartisan piece of legislation to help investors make good decisions that help Americans save for retirement more securely,” Foster said.