SEC proposes rules to make ETF research easier for broker-dealers

Chairman Jay Clayton says proposal would increase investors' access to research

May 25, 2018 @ 11:20 am

By Hazel Bradford

The Securities and Exchange Commission proposed rules Wednesday that would make it easier for brokers or dealers to publish research on mutual funds, exchange-traded funds and business development companies without worrying about it being considered a sales offer.

The proposed rules would create a safe harbor similar to an existing one for research reports about other public entities.

SEC Chairman Jay Clayton said the proposal would reduce obstacles to providing research on investment funds by harmonizing the treatment of such research with research on other public entities. "The proposed changes are intended to provide investors with greater access to research to aid them in making investment decisions," he said in a statement.

The rule-making was mandated by the Fair Access to Investment Research Act of 2017 enacted Oct. 6. At the time, the Securities Industry and Financial Markets Association, the industry group representing broker-dealers, banks and asset managers, called it "common-sense legislation" that recognized outdated regulation. "As the ETF market continues to grow, this bill's clarifications will allow broker-dealers to produce more research on ETFs, provide consumers with greater access to information and contribute to capital formation," the SIFMA statement said.

The proposal is open for 30 days of public comment before being finalized.

(More: Clayton: SEC left 'fiduciary' out of new advice rule to avoid investor confusion)


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