House Passes Exchange-Traded Fund Research Bill

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By Rob Tricchinelli

A bill (S. 327) that would ease restrictions on published research about exchange-traded funds cleared the House Sept. 27, setting it up to become law with President Donald Trump’s signature.

The bill, sponsored by Sen. Dean Heller (R-Nev.), would create a safe harbor under federal securities laws so that broker-dealers can publicize research on exchange-traded funds without their communications being considered an “offer” of the underlying funds. It passed by voice vote.

The chamber overwhelmingly passed a previous version of the bill (H.R. 910) in May but voted again to pass the Senate’s version, which slightly restricts the kinds of research that qualify for the exception.

The Senate version adds language that would prevent a broker-dealer from using the exception when publishing research about funds it acts as an investment adviser for or is affiliated with. The House version was sponsored by Rep. French Hill (R-Ark.).

“My commonsense bill, with Senate amendments, clarifies current law to allow broker-dealers to publish ETF research, facilitating investors’ access to useful information in this rapidly growing market,” Hill said in a news release.

To contact the reporter on this story: Rob Tricchinelli in Washington at rtricchinelli@bna.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bna.com

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